EU aviation fuel taxation

Taxation of aviation fuel in the European Union is regulated by the Energy Taxation Directive (2003/96/EG) of 27 October 2003. This prohibits the taxation of commercial aviation fuel, except for commercial domestic flights or by bilateral agreement between member states. As of 2023, commercial aviation fuel is currently tax exempt under the legislation of all member states of the European Union. This tax exemption has been criticised on environmental grounds. Jet engines using kerosene fuel developed rapidly after 1950. Jet aircraft and almost all helicopters fly with a turbine drive; all turbines are operated with kerosene-based jet fuel. The majority of modern passenger and freight air traffic as well as military flights take place on jet aircraft. Light aircraft such as private planes with typically 1 to 5 seats, as well as very small helicopters, usually fly with a piston engine. Almost all piston engines have carburettors, for which they rely on carburettor fuels, typically avgas (aviation gasoline). Hot air balloons generate lift by burning propane or butane. Under EU law, it has been possible to tax jet fuel nationally and between Member States since 2003. However, as of August 2019, the only EU country to have done so is the Netherlands, which taxed commercial jet fuel from 2005-2011 on domestic flights only. The Netherlands abolished this tax on commercial domestic flights in 2012, due to complicated implementation and low revenue, but continued to tax aviation kerosene for pleasure and non-commercial business aviation. In all other European Union countries, commercial aviation fuel is tax-free. (Norway taxes kerosene however Norway is not a member of the European Union.) In Article 24 of the Chicago Convention on International Civil Aviation of 7 December 1944, on the basis of which the UN aviation organisation ICAO was founded, it was agreed that when flying from one contracting state to another, fuel that is already on board an aircraft may not be taxed by the state where the aircraft lands, nor by a state through whose airspace the aircraft has flown.