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Source: Patrick Pleul/DPA/Picture Alliance via Reuters
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  • The European Commission drafts plans for an EU-wide minimum tax rate for polluting aviation fuels
  • The aviation sector currently avoids the EU’s fuel taxes, which the bloc said “is not coherent with the present climate challenges and policies”
  • From 2023, the minimum tax rate for aviation fuel would start at zero and gradually increase over a 10-year period
  • However, any changes to EU tax rates require unanimous approval from all of the EU’s 27 member countries
  • The aim is to encourage airlines to make the switch to more sustainable fuels, like e-kerosene

The European Commission has drafted plans for an EU-wide minimum tax rate for polluting aviation fuels as it looks to set more ambitious targets to fight climate change.

The aviation sector currently avoids the EU’s fuel taxes, and the proposed measures are part of a broader effort to reduce EU greenhouse gas emissions by 55 per cent by 2030, compared to 1990 levels.

That exemption “is not coherent with the present climate challenges and policies,” a document seen by Reuters said.

From 2023, the minimum tax rate for aviation fuel would start at zero and gradually increase over a 10-year period until the full — and as-yet unspecified — rate is imposed.

Introducing the proposal, however, could be difficult. Changes to EU tax rates require unanimous approval from all of the EU’s 27 member countries, meaning just one state could veto the measures entirely.

The levies would be based on a fuel’s energy content and environmental performance, meaning polluting fuels would become more expensive.

The aim is to encourage airlines to make the switch to more sustainable fuels, like e-kerosene. Adoption of these fuels has been slow, partly due to the higher cost, and they currently account for less than one per cent of Europe’s jet fuel consumption.

The draft proposal would also introduce minimum tax rates on polluting fuels used for waterborne navigation, fishing and freight transport within the EU.

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