Taxes being imposed on aviation fuel discriminate against short and medium haul carriers to the benefit of the aviation giants, Maltese MEP Alfred Sant has complained.
Speaking in a subcommittee on tax matters (FISC) in the European Parliament about the forthcoming Energy Treaty Directive, Sant said that the revised proposals will put large airlines at an advantage over smaller ones because long-haul flights will be exempted from measures on tax emissions despite producing the bulk of emissions.
He asked if, in setting these taxes, sufficient account has been taken as to whether peripheral countries, islands and remote regions where tourism was the primary vehicle for economic development, would be negatively affected, increasing further their lack of connectivity.
The Energy Taxation Directive lays minimum taxation levels to ensure that the European Single Market functions thoroughly. In July 2021, the European Commission called for a revision of the Energy Taxation Directive and proposed new legislation that would tax activities that create greater climate warming.
The Labour MEP emphasized that taxing kerosene fuel used in medium-haul flights while exempting long-haul flights amounted to a cross-subsidisation in fuel emission taxation. This would benefit large carriers at the expense of smaller airlines.
EU replies: taxes are out of our hands
Emmanuel Rauch, head of unit at the European Court of Auditors, explained in reply to questions by Sant that fuel for international flights is tax-free because of global trade negotiations.
He agreed with the point made by Sant on the impact on remote regions and islands and said it should be considered by policy-makers.
Vicente Hurtado, from the European Commission, explained that Malta could tax flights between Malta and London in the same way as flights to Madrid.
But the EU could not impose taxation on long-haul flights because of international agreements.
He said the connectivity issue was crucial. The commission did not want to penalise people and viewed mobility as a cornerstone.
The commission also wanted to promote and encourage airlines to move from kerosene to electricity or hydrogen. He said he understand connectivity issues for Malta or the Canary islands.
"State aid is here to ensure connectivity for small airports. State aid is allowed in these cases," he said.