EU Imposes Carbon Tax on Aviation Kerosene... Plans to Extend to Ship Fuel as Well

Carbon Tax Reform Plan 'Fit for 55' to be Unveiled on 14th... Expansion of Tax Base and Strengthened Regulations
First Explicit Support for Carbon Tax in G20 Finance Ministers' Official Statement

[Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] The European Union (EU) will unveil a carbon tax reform plan on the 14th (local time) that includes, for the first time, imposing a carbon tax on aviation kerosene.

The reform plan, named ‘Fit For 55,’ reflects the EU’s commitment to reduce greenhouse gas emissions to 55% of 1990 levels by 2030.

Fit For 55 is expected to include expanding the scope of the Emissions Trading System (ETS) for carbon tax imposition, strengthening automobile emission regulations, and imposing carbon taxes on certain imported goods related to carbon emissions.

One of the most significant changes in this reform plan is the introduction of a carbon tax on aviation kerosene, which had previously been exempt. The EU plans to introduce a carbon tax on aviation kerosene and gradually increase the tax rate over ten years. However, aircraft carrying only cargo will still be exempt from the carbon tax, and non-commercial aircraft will be subject to a lower tax rate. The EU also plans to impose a carbon tax on marine fuels.

As climate change has emerged as a key agenda for the international community, efforts to reduce greenhouse gases are accelerating.

At the G20 Finance Ministers meeting that concluded on the 10th, support for carbon taxes was officially included in the statement for the first time. The G20 Finance Ministers stated, "Suppressing climate change and biodiversity loss and protecting the environment are urgent top priorities," and added, "Appropriate carbon tax systems must be utilized to achieve this."

At the international climate conference held in Venice, Italy, on the 11th, Christine Lagarde, President of the European Central Bank (ECB), expressed support for carbon taxes. In particular, President Lagarde emphasized the need for a more effective carbon tax. She said, "Carbon taxes must be imposed reflecting the real price of greenhouse gases." This is interpreted as emphasizing the need to increase the cost burden on greenhouse gas emissions, such as imposing higher taxes on emissions. In fact, there are criticisms that current greenhouse gas tax proposals and emission allowance prices are too low to achieve carbon neutrality by 2050.

At the same event, Janet Yellen, U.S. Treasury Secretary, stated that multinational development banks such as the World Bank and the International Monetary Fund (IMF) need to respond more actively to climate change. Secretary Yellen emphasized that the World Bank, IMF, and others should manage assets with a focus on carbon neutrality and strengthen cooperation with the private sector.

This content was produced with the assistance of AI translation services.