Green kerosene taxes will mean a straight reduction in the economic competitiveness of island destinations – Alfred Sant

Alfred Sant

Last Updated on Tuesday, 24 May, 2022 at 2:28 pm by Andre Camilleri

Intervening in the debate on amendments to the Energy Taxation Directive being proposed in the Economic and Monetary Affairs Committe (ECON) of the European Parliament on the Energy Taxation Directive (ETD), former Prime Minister Alfred Sant raised the question of the tax being proposed on kerosene fuel for airlines.

He emphasized that the proposal to introduce a levy over ten years on such fuel for air travel will mean a straight reduction in the economic competitivness of island and peripheral destinations. Sant argued that a remedy need not be some total exemption covering air travel to islands, remote and peripheral regions but measures could be graduated in a different manner than for other destinations over ten years. This would safeguard the competitivity of the tourism and other economic sectors of these areas.

The European Union’s Energy Taxation Directive entered into force in 2003. In July 2021, the European Commission presented a proposal for the revision of the Energy Taxation Directive and proposed a new legislation that would tax processes which create greater climate warming. Thus, the overarching aim of the proposed directive is to align the taxation of energy products with European energy and climate policies.

Labour MEP Sant acknowledged that the proposed measures are vital in the strategy to combat climate warming. However, care should be taken for these measures to retain balance and to be fair across the board to all European stakeholders. Sant noted that the proposal to raise a levy over ten years on kerosene fuel for air travel will apply only to intra European Union flights, mainly short to medium haul travel. This will put large airlines at an advantage over smaller ones and will be effectively subsiding European and non-European mega airlines.

Moreover, he emphasized that island, remote and peripheral regions will be penalised by the proposed measures in the European Taxation Directive because they rely more than most areas on air travel to keep their economies and their connectivity. Meanwhile, supported by other ECON MEPs, Sant has tabled a number of amendments to the directive that reflect the points raised in his intervention.

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