EU Considers 10-Year Delay on Aviation and Shipping Fuel Taxes

The EU is contemplating a decade-long delay in implementing taxes on aviation and shipping fuels, as part of long-overdue energy tax reforms. Initial resistance from member countries, particularly those with significant shipping or tourism sectors, has stalled efforts to introduce taxes on CO2-emitting fuels.

European Union countries are discussing a potential 10-year delay in imposing EU-wide taxes on aviation and shipping fuels. This move is part of an attempt to finally implement energy tax reforms, according to a draft document that Reuters has reviewed.

The European Commission suggested revising energy tax regulations in 2021, aiming to align with climate change mitigation efforts. This included phased-in taxes on CO2-emitting fuels for air and sea travel within the 27-member bloc, currently exempt from minimum Union tariffs. Despite these proposals, governments have resisted and are now contemplating a decade-long delay, allowing existing tax exemptions to remain, a draft EU proposal indicated.

A meeting of EU negotiators in Brussels will convene on Friday to discuss this compromise. Only smaller aircraft with a maximum of 19 seats and certain private boats might incur taxes before the 10-year mark, as per the draft, aimed at maintaining competitiveness among Union companies. While the EU already enforces minimum taxation on other fuels, such as car petrol and electricity, climate advocates have criticized the slow progress on taxing less clean fuels.