The idea of taxing jet fuel surfaces regularly in the debate on reducing the environmental impact of the aviation industry. Legally, it became possible with the adoption of Directive 2003/96/EC on the taxation of energy products. This directive allows the taxation of jet fuel for domestic flights and for flights between two member states, subject to mutual agreement. So far, however, the member states have not used this possibility, particularly because of the competition problems it creates between the EU operators concerned and non-EU carriers working the same routes but that would be exempted from the tax pursuant to bilateral agreements.

To avoid such discrimination, the Commission took advantage of a wide operation to adapt bilateral aviation agreements between member states and third countries, which began in 2005, to include in as many agreements as possible a provision allowing the taxation of jet fuel. Not all third countries agree to such a clause, but several hundred agreements have been revised to that effect and will theoretically allow fuel taxation to be considered. It is hard to say whether such a possibility will actually be used.

The EU is not working on an additional stage: a directive that would automatically tax jet fuel on flights within the Union. “Nothing along those lines is on the agenda,” said the Commission, adding that, in practice, application of the emissions trading scheme to aviation “has replaced the idea of a tax on jet fuel”.

Several hundred agreements have been revised to that effect and will theoretically allow fuel taxation to be considered. n