Private jets will be taxed for the first time under the EU’s new climate plan

Fuel for private jets is currently tax-free in Europe. That could change soon.
Fuel for private jets is currently tax-free in Europe. That could change soon.
Image: REUTERS/Denis Balibouse
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European lawmakers introduced a raft of climate policy proposals on July 14 to help the bloc hit its legally binding goal to cut emissions 55% below 1990 levels by 2030, and eliminate them by 2050.

The one drawing the most attention both inside and outside Europe is a proposed import tariff on high-carbon industrial products that could force dramatic changes in how things like steel and fertilizer are manufactured globally. But there’s another proposal buried in the laundry list, which is dubbed Fit for 55, that could become a headache for the richest Europeans: The first tax on fuel used for private jets.

‘Europe is a tax haven for flying’

Under existing European law, aviation fuel is tax-exempt (with the exception of fuel for tiny, low-altitude recreational aircraft, which is taxed). That allows commercial airlines, air freight companies, and private flyers a free pass to pollute the climate, said Andrew Murphy, aviation director at Transport & Environment, a Brussels advocacy group. Prior to the pandemic, aviation typically accounted for 4% of EU emissions, according to the European Commission.

Private jets are especially damaging—Murphy’s group has found that they’re up to 14 times more carbon-intensive per passenger than commercial flights, and can emit as much CO2 in one hour as a typical EU citizen is responsible for in three months.

“Europe is something of a tax haven for flying,” Murphy said. “And allowing fossil fuels to be sold tax-free is indefensible.”

What impact will the tax have?

Under the new proposal, commercial and private flights flying between destinations within the EU would face a fuel tax similar to what motorists already pay (cargo flights would remain exempt). Thanks to pressure from airlines, the commercial tax would phase in gradually over 10 years. But the private jet tax would kick in overnight (as soon as the proposals are approved, likely in at least two years’ time). Murphy estimates that it would amount to about 37 euro cents per liter, almost double the current rate.

A mid-sized private jet burns about 940 liters per hour, so the cost could really add up—but probably not enough to encourage a substantial difference in behavior among the deep-pocketed passengers on private jets. EU member nations will have discretion on how to spend money raised from the tax within their borders; in part, it could be recycled into subsidies for low-income households to offset energy costs that are likely to rise across the board because of climate policies.

“People who fly [in] private jets are unlikely to be deterred from flying,” Murphy said. “But just because [the tax] isn’t enough doesn’t mean it’s not a good idea.”