The European Union is considering a 10-year tax exemption for aviation and maritime fuels, according to a newly surfaced draft proposal. This potential policy shift would delay the introduction of minimum EU-wide taxes on carbon-intensive fuels in these sectors until 2035, providing a temporary delay for airlines and shipping companies.

Currently, fuels used in international aviation and shipping are exempt from EU energy taxes. The proposed delay is being positioned as a strategic move to preserve the global competitiveness of European operators, especially in economically sensitive sectors like tourism and trade. Only private jets, leisure boats, and small aircraft under 19 seats would face fuel taxation during this interim period.

The measure is part of a broader attempt to revamp the EU’s outdated energy taxation framework, aligning it with climate neutrality goals. The European Commission had initially proposed ending fuel tax exemptions back in 2021 to drive the transition toward cleaner energy sources. However, widespread resistance from member states, particularly those heavily dependent on tourism and maritime logistics, has stalled the reform.

Drafted under Denmark’s rotating EU presidency, the new proposal will be discussed among EU negotiators in Brussels, with hopes of reaching a consensus by November 2025. Yet, with unanimous agreement required among all 27 member states, the outcome remains uncertain.

While the delay may offer economic stability in the short term, critics argue that it undermines the EU’s climate leadership and delays urgent action on emissions reduction. Balancing environmental imperatives with economic realities continues to be a central challenge in shaping Europe’s sustainable future.

Source :

https://www.reuters.com/sustainability/boards-policy-regulation/eu-mulls-10-year-tax-holiday-jet-shipping-fuels-draft-shows-2025-09-01/