By Vanessa Rullier

Energy Tax Directive: a significant taxation reform to come

In July, the European Commission issued its "Fit For 55 Package", a series of legislative proposals under the European Green Deal. The aim is to make all sectors of the EUs economy ready to meet the challenge of a climate-neutral continent by 2050.

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On this page Sustainability Taxes

One of the main pillars is the Commissions proposal to review the European Energy Tax Directive. The Directive will lead to significant reform of the tax regime in Europe for all sectors, including aviation. The tax baseline will be based on the impact of energy products on the environment. In addition, the Commission proposes to tax energy products based on a minimum tax rate applicable in all Member States, as of January 1st, 2023.

For aviation, the Commission proposes to remove the fuel tax exemption for all intra-European Union flights (except for cargo) and to apply a fuel tax with an increasing annual rate of 1/10, over ten years to reach the minimum tax rate. Member States will, however, keep the flexibility to set a higher rate. The removal of the fuel tax exemption could even be extended to non-European Union flights as per bilateral/international agreements signed up with third countries. Furthermore, Sustainable Aviation Fuels (SAF) are currently exempted from the European Energy Tax Directive.

However, the Directive states that Business aviation flights and pleasure flights will be subject to the ‘new normal’ regime and will have to pay the minimum tax rate as of January 2023, without the ten-year transition period. 

The revised Directive provides the following definitions:

  • Business aviation shall mean the operation or use of aircraft by companies or individuals for the carriage of passengers or goods as an aid to the conduct of their business, flown for purposes generally considered not for public hire and piloted by individuals having, at the minimum, a valid commercial pilot license with an instrument rating.” Pleasure flights shall mean the use of an aircraft for personal or recreational purposes not associated with a business or professional use.”

While the above definition leads us to believe that Commercial Air Transport flights operated by Business aviation are in the scope of the new ‘general’ aviation regime and the non-commercial and private flights are not, the Commission’s Q&A webpage and dedicated workshops seem to contradict this interpretation. The Commission’s intention appears to impose the payment of the minimum tax rate as of January 2023 to all types of Business aviation flights. 

Such a level of unclarity may well be leading to various national interpretations. Accordingly, EBAA’s Secretariat closely monitors this critical item and will consult with members and experts to develop a position paper. 

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Please contact Vanessa Rullier-Francaud at

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