Environmental campaigners are calling for a new tax on jet fuel used by airlines to raise almost £6 billion a year for the UK economy.
European lobby group Transport and Environment (TandE) calculates that the government could have collected £5.9 billion in taxes last year by imposing duty on all jet fuel at the same rate as British drivers are charged.
Its latest analysis suggests that introducing a “fair” fuel duty equivalent could bring in between £400,000 to £5.9 billion a year depending on the routes covered and the tax rate applied.
TandE says it is “incredible” that unlike drivers, hauliers, rail operators and farmers, airlines do not pay tax on the fuel they burn.
It urged the government to use next month’s autumn budget to apply a 9p fuel duty rate per litre to kerosene from next year.
The rate should then be raised annually until it matches road fuel duty in 2030.
Road fuel duty is currently levied at almost 53p per litre and this revenue accounts for approximately 5% of government revenues, according to TandE.
Airlines should also be required to buy 90% of fuel for all departing flights at UK airports to prevent them from purchasing untaxed kerosene from outside the UK.
TandE UK policy manager Matt Finch reportedly said: “With a £22 billion black hole staring the country in the face, the chancellor needs to pursue any and all avenues to raise funds.
“The baffling lack of meaningful taxation of the aviation industry is a slap in the face of drivers, farmers and our ailing rail system, all of which have paid their fair share for decades.
“For the sake of the economy and the environment, it’s time to end the unfair anomaly that allows the aviation sector to pollute with impunity while not paying any [fuel] tax.”
However, in remarks quoted in regional media, Airlines UK chief executive Tim Alderslade said: “The aviation industry contributed £3.85 billion to the exchequer last year through Air Passenger Duty and the phasing out of UK ETS [Emissions Trading Scheme] free allowances for airlines is due to raise between £1.6 billion and £4.1 billion between 2026 and 2033.”
He added: “The sector is fully committed to net zero emissions by 2050 and with the world’s third largest aviation network and proud history of innovation, the UK is in prime position with government and industry working together to lead the transition to a net zero future without hurting passengers or damaging aviation’s status as a key UK economic enabler.”