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Why should there be 0% VAT on international aviation fuel?

2

Comments

  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 50,895 CMod ✭✭✭✭magicbastarder


    any links to how it's produced?



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202302405

    Well, the actual law is there but it's obviously quite dense. It is made from "waste" materials that are already in the carbon lifecycle. so Used Cooking Oil, animal fat (should people eat less meat? sure, but that's not aviation's fault), residues from pulping, residues from refining edible oil etc etc.

    People's views on biofuels tend to be formed from back in the day of blending corn ethanol into gasoline which still happens in the US and is a bit of a disaster. But it's not how the EU does it. Vegetable oil based SAF literally does not qualify for the mandate and I'm not aware of a single person globally who has produced any.



  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 50,895 CMod ✭✭✭✭magicbastarder


    uh… how much used cooking oil is there in the world? or animal fat? like i said, i have a bridge i'd like to sell you.

    total greenwashing.



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    Tens of millions of tons. There is also multiple other options ranging from currently used to pretty far away - every last one of them waste products that exist for other reasons. There is not enough to fully cover Jet usage which is why they are also looking at e-fuels which use carbon capture of biogenic carbon and electrolysis to create hydrocarbon fuel.

    The SAF produced today is not greenwashing, though obviously not enough is produced. You are simply wrong about this.

    I'm not sure what your suggested alternative is other than grounding all planes worldwide.



  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 50,895 CMod ✭✭✭✭magicbastarder


    according to an IATA stat i've found, there was 78 billion gallons of aviation fuel used by airlines in 2023, which is about 250 million tons.

    so a factor of ten higher maybe, than the amount of used cooking oil available? if it's a factor of ten, it's not exactly a knight on a white horse. and it's certainly not going to be carbon neutral to collect, refine, and redistibute it.

    i suspect removing the 0% vat on fuel would do a lot more to reduce the carbon footprint of the airlines than some hand wavey 'yeah, some time in the future' sort of promise of biofuels.

    it's ludicrous that ryanair don't have to pay tax on fuel, but an organisation like irish rail does.



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    My comments weren't related to airline taxation. I have no issue with it, though it needs to be applied on a European level or it won't work. I also disagree with the original point that the aviation industry is taking voluntary strides towards decarbonisation (or defossilisation more to the point) more than other industries.

    But SAF is categorically not greenwashing, it is clear you don't know how it is produced when you said that. It isn't enough to replace all Jet at this point in time but that is a completely different point. You could simply acknowledge that SAF is a useful component in the process but won't be enough on its own.



  • Moderators, Category Moderators, Arts Moderators, Sports Moderators Posts: 50,895 CMod ✭✭✭✭magicbastarder


    pretty much every single transport mode is pointing towards biofuels or other 'sustainable' fuels as a way of reducing their carbon footprint. who is going to win?



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    Road transport can electrify, aviation can not.



  • Registered Users, Registered Users 2 Posts: 10,633 ✭✭✭✭Marcusm


    we have to be very careful with SAF. Absent controls around the world we will see virgin oils such as palm being declared as if they were waste oils to capture the subsidy. A recent U.K. report stated that 25% of their waste tyres could produce the level of SAF to which they are committed. Up until now they have been exported to places with likely lower regulation.

    Carbon offsets through genuine methods of seeding forests etc could provide some additional scope but it’s unlikely that all aviation fuel could be sustainable just as 100% renewable generation without some carbon use (whether back up, manufacturing of renewables technology etc) is pie in the sky thinking.



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  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    Irish Rail could pay a tax of 1000% on fuel and it would only be going from one arm of government to the other and back to Irish Rail again.

    People pay taxes which Ryanair passes on to them. Your hatred of Ryanair is blinding you to this simple fact…people ultimately pay taxes, not the provider.



  • Registered Users, Registered Users 2 Posts: 3,714 ✭✭✭HBC08


    Airlines won't pay it,you will.

    Im happy enough with airfares not going through the roof and having the option to get off this rain sodden rock a couple of times a year.



  • Registered Users, Registered Users 2 Posts: 4,715 ✭✭✭blackbox


    Is there not also zero VAT on fuel for international shipping?

    If not, why would any ship refuel in Ireland?



  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    EU wide rule - zero VAT and zero excise on supplies (not just fuel) to ships conducting international commercial voyages



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    You coulkd make that argument for any service. Car fuel, electricity etc. other more vital services yet they still get taxed etc. why does aviation get away with it? Whats so special?



  • Registered Users, Registered Users 2 Posts: 3,714 ✭✭✭HBC08


    This would be a dont know,dont care situation on my end.

    Everything is so expensive, I'm happy to be able to take a few holidays a year and not get completely shafted in the airfare.

    I'm not sure why anybody would be pining for more taxes.



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  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    Well taxes pay for public services pensions etc. Every sector should be treated equally.



  • Registered Users, Registered Users 2 Posts: 3,714 ✭✭✭HBC08


    I don't know about you but Im in the cohort that pays through the nose in taxes .

    I'm certainly not looking to pay any more,maybe you are? I find it a weird enough stance to have.



  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    It’s a combination of things.

    Firstly - aviations laws and regulations borrow heavily from maritime laws and regulations. International shipping has historically had such exemptions because 1) no country slanted to be seen to discourage vessels from calling to their ports and 2) it’s very easy for a ship to be strategic about where it bunkers its fuel meaning no country wanted to be taxing something that another country wasn’t.

    Secondly - at an EU level there’s the golden principle of free movement of people and trade between member states and anything placing taxes on that has been discouraged



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    The EU is looking at this from a carbon tax view so I doubt this will continue forever.



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    get a proper tax implemented on Gambling and then come back to us after; That is a purely discretionary activity which is more deserving of punitive taxation than Travel.

    You have been drumming on about this topic for ages, you have already been told about the carbon trading scheme which Airlines are obligied to adhere to, Airport Departure taxes in lieu of VAT, etc...

    [SNIP] ad hominen insult deleted. Be better.

    Post edited by Tenger on


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  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    Both aviation and maritime mandatory exemptions in the energy taxation directive look likely to remain in the revised Energy Taxation Directive - with reviews scheduled around 2035.

    EU Working Party on Tax Questions is due to meet on Wednesday 23rd October and confirming this is on their agenda



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    I wasn't talking about gambling so I can't understand your logic. I was and am talking why air travel fuel isn't taxed as other fuels in the EU.



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    And you have stated your views over and over again and should have understood by now that others do not share your views that additional taxes on fuel for a form of transport where no other form of fuel is available is not desirable.



  • Moderators, Motoring & Transport Moderators Posts: 10,005 Mod ✭✭✭✭Tenger


    And your query has been answered (as much as possible) by others.



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    The answers given have centered around the current rules as they are but not the logic behind them. I guess there isn't one really why place aviation fuel above cars, trucks etc.?



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    'The Irish government lost out on €760 million in revenue last year due to very low levels of taxation in the aviation sector, a new study by green group Transport & Environment finds. €760 million could pay for the Government’s Renewable Electricity Support Scheme three times over. At European level, governments lost out on more than €34 billion in 2022 from the sector. 

    The analysis looks at the revenues that should have been raised from air travel pricing if the sector did not benefit from such exemptions. It compares these revenues with those that were actually raised in a year. This is defined as the ‘tax gap’. In Ireland, there is no kerosene taxation, no ticket taxes nor VAT and a carbon price on intra-European flights only. Ireland had a small tax on all departing flights from 2008 to 2014 but abolished it. '

    This could pay for much of what is needed in this country and it's hard to defend unless you are in the Aviation business.



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    I apologize. You've convinced me. How wrong I was. Tax the b@stards in to the ground.



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    Closing the gap and addressing aviation’s under-taxation should be an utmost priority for governments. A study recommends applying a fuel tax on kerosene, a 20% VAT rate on tickets and extending the carbon market for aviation to departing flights. These changes would help to close the gap in government budgets. In the absence of these measures, T&E recommends applying a ticket tax equivalent to the Irish tax gap, i.e. €950 million in 2025.

    The study shows that higher taxes will have an impact on passenger ticket prices. This could result in a decrease in demand and CO2 emissions savings. The study finds that ending exemptions in 2022 would have saved 35 Mt of CO2, in Europe, with an even higher total climate impact accounting for non-CO2 effects of aviation. As the sector seeks to decarbonise, revenues raised by taxation should be partly reinvested in green technologies, such as e-kerosene. Aoife O’Leary concludes: “Irish Minister for the Environment, Eamon Ryan recently pointed out the injustice of aviation going untaxed while climate vulnerable countries require support to deal with the devastating impacts of climate change in their countries. Ireland must ensure aviation pays its fair share of taxes. There is a clear opportunity to reduce pollution from aviation and achieve Ireland’s climate goals, all while supporting those most at risk from climate disaster.“



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    If I was paying just carbon tax at €100 per ton(which is the Irish Government target for 2030) for my flight I'd be paying considerably less than is currently paid for Carbon Trading, SAF blend and Aviation TAX which is blended in to the price of my ticket. You haven't got a clue about any of this so you are just regurgitating a report from a lobby group.

    I am not in favour of the Carbon tax because people like you would still demand the VAT, Aviation Taxes and SAF blends and Carbon trading on top of all this because disciples of the Green Party don't think independently and just follow Dogma.

    If the Green Party did get a carbon tax of €100 per ton in Aviation then they would start lobbying for €500 and then €1000 and then €10000 because everything has to be carbon neutral. even 1g is too much for them.

    On top of that Eamon Ryan has said we should have to compensate for "more vulnerable countries"…that is an open line of credit for the world.

    If you want to engage in some attention seeking go and open a can of Tomato Soup and throw it on Leinster House. Get arrested for your misguided "principles" please.

    …oh, you want vat as well. which VAT 15%, 19%, 23%, 27% applied on top of the Carbon credits airlines will be forced to buy.

    Welcome to the world of tankering in that case.

    https://www.globalvatcompliance.com/globalvatnews/vat-rates-in-europe-2021/

    Post edited by gossamerfabric on


  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    could you imagine a VAT rate being set. Ireland would be in a race to the bottom with Luxembourg and Malta to set the lowest permissible VAT rate and have the combined E.U. fleet flying in a couple of times a day to tanker as much as possible.

    It is not like Ireland is a stranger to variations on the theme of arbitrage...tax, data protection, regulatory frameworks…best country in the world in which to do "Business".

    Also, I expect you to campaign about the Sanitary products zero rate…those tampons do untold damage to the public sewage system and keep Dyno-rod in business. It is only fair…as you said in your opening post it is unfair some businesses get a "free ride".



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  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    If you want to see how Crazy the Greens can be then translate this article below.

    Greens mandate use of PowerToLiquid fuel but PtL hasn't got out of the Laboratory and in to mass production yet while at the same time Nuclear plants are shut down which is the only source of plentiful carbon free electricity with which to produce PtL.

    This is the calibre of zealots we are dealing with.

    "Airlines are supposed to use fuels that do not yet exist. This is causing a Coalition Parties dispute: Transport Minister Volker Wissing (FDP) points out legal violations to Steffi Lemke (Greens) - but the Environment Minister remains stubborn. The Condor boss announces that he will take the matter to court if necessary."

    https://www.welt.de/wirtschaft/article254059224/Luftfahrt-Krise-Die-Kerosin-Quote-der-Gruenen-wird-zum-naechsten-Standortnachteil.html



  • Moderators, Motoring & Transport Moderators Posts: 10,005 Mod ✭✭✭✭Tenger


    One bit of logic given above indicated that any tax on aviation fuel needs to be regional (EU) rather than national. Any nation that introduces taxation will inflict economic damage upon itself.



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    This is not as crazy as it can first seem to be fair. The EU itself mandates technologies for eSAF that do not yet exist - a reliable regulatory framework is how you get people to invest in developing the technology.

    Of course as always and improvement in tracking proof of sustainability is needed and is constantly happening. It is better today than it was 10 years ago and it will be better again in the future.



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    Where do they get their feedstock of energy from in Germany to produce PtL. The inputs aren't available.

    It is simple looney tunes Green "wish upon a star" politics.



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    They are too far ahead of the curve but it's a general EU policy with mandates kicking in from 2030. They've implemented it poorly (and it will be removed anyway) but its not conceptually as mad as it is being made out. Most bio energy targets have elements of developmental technology in them



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    Again, I tell you there is no feedstock of energy. They closed down the nuclear plants, they can't add any meaningful volume of wind or solar capactity. They have exhausted all their hydro sources and regulating the smaller producers of hydro energy out of the market. The waste to energy plants are at this stage being fed from abroad.

    They have NO unharnessed feedstock of clean energy.

    The only way they will achieve their % goals is by shrinking the aviation market in Germany through punitive taxation and regulation which they are well on their way to doing.



  • Moderators, Sports Moderators Posts: 28,183 Mod ✭✭✭✭Podge_irl


    Oh right, I misunderstood your point. Yes, shutting down their nuclear plants was mind bogglingly stupid but the German greens have always had a very unhinged anti-nuclear stance.

    The target is unachievable either way though (the technology is not advanced enough yet for scale) and will be removed.



  • Registered Users, Registered Users 2 Posts: 36,553 ✭✭✭✭Hotblack Desiato


    Germany shut down clean nuclear and burned more lignite (brown coal) instead, which is absolutely filthy and the pollution will directly cost human lives. The open strip mining process is also environmentally destructive. But greens, eh?

    In Cavan there was a great fire / Judge McCarthy was sent to inquire / It would be a shame / If the nuns were to blame / So it had to be caused by a wire.



  • Registered Users, Registered Users 2 Posts: 36 PoulMM


    If there is VAT/Tax on fuel for cars, buses, lorries, rail and ship, of course there should be tax on aviation fuel



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  • Registered Users, Registered Users 2 Posts: 36,553 ✭✭✭✭Hotblack Desiato


    Imagine if you lived very close to a border where you could legally nip over and fill your car (or van, or fleet of trucks) tax-free. Taxing fuel would not work then. That's in effect the situation for aircraft. Seems you saw the thread title and hit post without reading any of the thread

    In Cavan there was a great fire / Judge McCarthy was sent to inquire / It would be a shame / If the nuns were to blame / So it had to be caused by a wire.



  • Registered Users, Registered Users 2 Posts: 20,251 ✭✭✭✭cnocbui


    Other transport can't go elsewhere quite as easily.

    If Ireland were to increase the price of jet fuel significantly the airline operators wouldn't refuel here. Increase the cost of doing business in this pathetic little market and the planes will go elsewhere, as it wouldn't be worth it.

    Yes Ireland can shoot itself in both feet if it wants to, but the rest of the world isn't going to care.

    You are always personally free to express your environmental concerns by not flying anywhere ever, just like George Monbiot /s

    Carbon taxes would not reduce CO2 emissions from planes, only planes not flying or being less heavily laden would do that. Carbon taxes on aviation fuel is not going to reduce the CO2 generated in a Plane flying from Ireland to the US - no one is going to say 'thats a bit expensive, think I'll cycle instead'. Only the plane not making the journey at all will reduce emissions.

    So instead of this disingenuous 'concern' for a lack of tax on jet fuel, how about rephrasing your concern honestly and just state that you think people are flying too much and express the wish that they wouldn't?



  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    Bunker fuels for international shipping are tax free also



  • Registered Users, Registered Users 2 Posts: 8,363 ✭✭✭saabsaab


    The EU should put tax on it like everything else.



  • Registered Users, Registered Users 2 Posts: 819 ✭✭✭gossamerfabric


    Interesting take there on EU being an oppressor of first and last resort.



  • Registered Users, Registered Users 2 Posts: 20,251 ✭✭✭✭cnocbui


    Mario Draghi has recently been very critical of the over-regulation in the EU and how it's stifiling and severely hampering businesses, competitiveness and trade.

    You have a large number of exorbitantly paid civil servants jobs whose main raison d'état is to produce restrictive and life-complicating and costly legislation - without end. No one seems to have a clue about how bureaucracies function. They are like cancers or parasites and you need a sanity check to stop them going too far and killing off the host. I think the EU lacks such a mechanism.



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  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    It's particularly impressive given that an EU Directive is the actual reason that no taxation can be applied to aviation fuel for international travel.



  • Registered Users, Registered Users 2 Posts: 20,251 ✭✭✭✭cnocbui


    I wouldn't be too quick to congratulate the EU, I am certain they are working hard to try and find a way to do what the OP wants.

    The EU Commission is effectively insane when it comes to CO2 concerns and 'green' measures. They have completely lost the plot.

    https://www.euractiv.com/section/energy-environment/news/eu-commission-urges-france-to-raise-renewables-target-to-at-least-44/

    The EU’s energy commissioner, Kadri Simson, has urged France to raise its renewable energy target to “at least 44%” by 2030, warning it would consider taking “steps” at EU level in case of persistent shortcomings.

    Paris has until now refused to put forward a renewables target for 2030, pushing instead for a wider “decarbonised” energy goal, which combines nuclear power and renewables.

    With a June deadline looming for EU countries to submit their final National Energy and Climate Plans, the European Commission is becoming increasingly confrontational with the French, insisting that they make their fair contribution to the EU’s renewable energy goals. 

    According to Brussels’ calculations, France needs to achieve at least 44% renewables in its gross final energy consumption by 2030 in order to contribute to the EU target of 42.5% set out in the Renewable Energy Directive, which was updated last year.

    What's wrong with that, you might wonder?

    France has an effectively net-zero energy grid right now, never mind 2030 or 2050. Last year they produced more zero CO2 electricity than the total electricity the country consumed. The rest they export to prop up the struggling renewables centric grids like Germany and Denmarks.

    As a technical aside; they generate a bit over 70% of their total electricity from nuclear, but it theoretically could at times be 100% because the gross capacity of their reactors exceeds demand, but some are usually down for maintainance. A few more reactors so a few are in reserve making even more of a mint from exports and they could be 100%. They burn a relatively tiny trickle of gas to keep turbines spinning for grid stability reasons, something renewables could not replace because they are not reliable.

    France's sin is to have set a bad example by being a quarter century ahead of every other EU member state and achieving 2050 emissions targets right now, using nuclear instead of renewables.

    Imagine if schools punished students for getting 100% in exams because they were smarter than other students?



  • Registered Users, Registered Users 2 Posts: 9,176 ✭✭✭blackwhite


    The EU has extended the general exemption for aviation and marine fuels to 2035 at the earliest.



  • Registered Users, Registered Users 2 Posts: 20,251 ✭✭✭✭cnocbui


    That's great. I wouldn't think it impossible for that to be recinded, given how it came about, by a member state trying it's best to get expelled from the EU:

    The compromise was drafted by Hungary, which holds the EU's rotating presidency and therefore chairs negotiations among EU countries until the end of the year. A spokesperson for Hungary's representation to the EU did not immediately respond to a request for comment.

    Still, I hope you remain correct and that it holds.



  • Registered Users, Registered Users 2 Posts: 10,431 ✭✭✭✭smurfjed




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