Meanwhile, in the not so sunny uplands of the EU, the good citizens of the 27 EU countries are about to be hit by an EU Green Carbon Tax

Not bad for some — Taxes for the many but not the few

Let me explain what is going on

In that charming manner that only the EU Commission knows how, its proposals to introduce a new tax on aviation fuel continues its journey towards confirmation — without any news that it is yet prepared to abandon its plan to exempt private jets. The same basket of carbon tax proposals will also see taxes on fuel for vessels entering EU ports and, yes, you guessed it, there will be an exemption for luxury yachts too.

When first announced last year the EU Commission’s proposals caused laughter and consternation in equal measure. How thoughtless, how out of touch, how elitist could the EU Commission be, that it would introduce a tax for passengers flying Ryanair and Easyjet from EU airports but not for a billionaire hopping on the company Learjet or Embraer on route to board the floating gin palace in Monaco?

One would be forgiven for thinking such crass behaviour is in the EU’s DNA, that to be so aloof and so unaware of how bad it looks is a pre-requisite for becoming a Commissioner.

First announced by the Commission on 14th July 2021, the measures were part of the EU’s ambitious targets to reduce emissions by at least 55 per cent by 2030 compared to the 1990 level, in its attempt to make Europe the first climate-neutral continent by 2050.

Exemptions for the wealthiest while new EU energy taxes hit ordinary people

  • Taxes on intra-EU commercial flights for all passengers
  • No taxes on private jet flights
  • Taxes on all shipping by vessels over 5,000 gross tonnes
  • No taxes on luxury yachts because of their weight

Aviation sector

The manner in which the aviation fuel tax will be introduced is to phase out the free emission allowances which the aviation sector currently enjoys under the existing Energy Taxation Directive.

It is proposed the resulting levy would apply from 2023 across all member states, increasing gradually over 10 years until the full rate is reached. If it were not for the Covid pandemic the tax was likely to be levied in full by 2026.

The rules promote the blending of ‘sustainable aviation fuels, known as e-fuels, into existing jet fuel uploaded at EU airports. These measures are estimated to help cut aviation emissions by up to 10%. The levy will be expressed in euros per gigajoule, the rate depending on energy content. It is believed the taxes will only be applied on intra-EU flights.

The loophole arises because the EU taxes will not apply to cargo-only flights or to “business aviation” which includes recreational use of an aircraft or a company using a plane for a business purpose — although members states will be allowed to levy their own tax on these categories if they wish. As private jets are usually the domain of the most wealthy, with flights being chartered by a business or tax-efficient company, the outcome will be that EU-based holidaymakers will be taxed for flying to Marbella but millionaires won’t when flying to Monaco.

EU’s top priority: “The European Green Deal”

“It is our opportunity to write history. Even more, it is our duty to act now.”

“Europe with its European Green Deal will spare no effort to become the first climate neutral continent. But at this COP, we all must speed up our race to net zero.”

Ursula von der Leyen, EU Commission President, at COP26 UN Climate Change Conference Glasgow, 01 Nov 2021

In 2016 — the UK’s Referendum year — the EU Commission held a public consultation on market-based measures to reduce the climate change impact from international aviation. The consultation sought input on both global and EU policy options. In total, only 85 citizens and organisations responded.

Maritime sector

Under the same proposals of last year, the maritime sector would see itself brought under the EU Emissions Trading System (ETS) from 2023, phased in over a three-year period. The EU’s proposals will be negotiated in Brussels this year but currently include an exemption for vessels below a 5,000 gross tonnage. Rather than using a system of vessel category, the gross weight was chosen — which is vague enough to create loopholes. This means not just fishing boats but yachts of all sizes and types will be exempt. However large Cargo Ships won’t.

A study by the Environmental group Transport & Environment said the loopholes would result in some 25.8 million tonnes of CO2 not falling under the ETS. Roughly 20% of the 130 million tonnes emitted annually by shipping in the bloc would be excluded.

The EU’s own estimates suggest that ships below the 5,000 GT threshold account for around 45% of vessels that call into EU ports but only around 10% of the emissions that would otherwise be liable for the levy. Shipowners will have to buy permits for their vessels if they pollute or face bans from EU ports.

Reaction

The trade body representing major European carriers, Airlines for Europe, said the EU’s policies threatened the competitiveness of airlines and the tourism industry and warned airlines could end up paying twice for emissions through overlapping measures. Member states will retain discretion whether or not to tax the fuel of private jets on a national basis.

The study conducted by environmental campaigners T&E estimated that 20% of the EU’s maritime emissions of 130m tonnes per annum that would avoid taxation was equivalent to the output of Denmark.

The new regulations and taxes will not apply to the UK unless the British Government chooses to adopt a similar law. Had the UK agreed to dynamic alignment with the EU’s Single Market such a law would automatically have been applied after passing.

Another set of EU taxes that the UK will avoid — thanks to Brexit.

British punters will find they are flying to Marbella or Madrid, Benidorm or Budapest without these taxes — but passengers flying from Berlin or Bruges are. The purpose of the taxes is of course to discourage people from travelling by air. So, of course, some environmental campaigners will claim the taxes are a good thing — fair enough — but let the British people decide for themselves, rather than have it imposed upon them as it would have been, and that is the one big difference, EU citizens are not asked and have no say. British ones do and if they do not like what's in the manifest they are free to choose differential

Political parties can put in their manifestos that they wish to have such environmental taxes and see if the public endorses them. Had we still been in the EU, the unaccountable EU institutions would have squared off a deal between reluctant countries so a tax would be introduced — and once introduced it would then gradually be raised.

The taxes are undeniably inequitable — a flight carrying 100s of passengers will have a low carbon emission per person — while a private jet carrying only a handful of people will have a very high carbon emission per person. Yet the latter goes untaxed. That cannot be right.

This madness is yet another bullet dodged, now amounting to a magazine or two, and there will be more to come as I keep looking for them.

Slaying the EU beast cut by cut😁😁😁…………..along with Remainers.

Sources: EU sources & Reuters

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