Airlines using ‘green’ jet fuel should escape government taxes, according to Virgin Atlantic founder Sir Richard Branson.
Governments need to make it “very clear” that aircraft fuel made from sources such as inedible plants and organic waste are not taxed like regular fuel, he said.
A push to remove taxes levied on airlines if they switch to using clean fuel would provide “enormous encouragement to the airline industry” to invest further in biofuel companies, according to Sir Richard.
“Governments need to make it clear that if it’s clean fuel it shouldn’t be taxed and if it’s dirty fuel it should be taxed, and that seems to be the best way to speed things up,” he told Bloomberg Businessweek. Renewable aviation fuel could provide competition to traditional jet fuel, he added.
“Ultimately if you have a competitor, we might be able to reduce costs and therefore reduce air fares,” Sir Richard said.
The Carbon War Room, a not-for-profit organisation funded by Sir Richard, has set up a web and information site aimed at reducing the use of traditional jet fuels by as much as 50%.
It will also play a role in talking to governments to try to push a “no-tax on clean fuel policy,” Sir Richard said. “I think they will be knocking at an open door as it will be very difficult for governments to disagree with that.”
Virgin spends more than $2 billion a year on fuel and there is “billions and billions and billions” there for the taking by the clean energy industry, he added.
Virgin Atlantic became the first airline to fly a plane using first-generation biofuel made from babassu nuts and coconut oil mixed with kerosene in 2008 and plans to fly aircraft using fuel made from waste gases from steel mills in two to three years time.