Denmark latest EU nation to propose aviation tax

Air tax to finance Danish transition to green fuels
2023-11-13
/
/ New Delhi
Denmark latest EU nation to propose aviation tax

Denmark’s government has proposed a new measure that would require a tax of DKK 100 (USD 14.35)

Following the footsteps of the Netherlands and France, Denmark has become the latest European nation to propose a tax on air passengers.
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Denmark’s government has proposed a new measure that would require a tax of DKK 100, or USD 14.35 on air travel to encourage the country’s domestic flights to utilise only sustainable fuels by 2030.

According to news reports, the proposal would gradually phase the tax into the industry beginning in 2025. By 2030, travel inside Europe to and from Denmark would cost USD 9, medium-distance flights would cost USD 34 and long-distance would cost USD 56 with the green passenger tax. 

Half of the estimated DKK 1.2 billion generated each year from the tax would finance the country’s transition to hydrogen, biofuels and power-to-X to complete Denmark’s goal of having all domestic flights use only green fuel by 2030. The other half of the money would go to help the country’s elderly, says the Danish government.

Lars Aagaard

‘‘The aviation sector in Denmark must, just like all other industries, reduce its climate footprint and move towards a green future,’’ says Lars Aagaard, Denmark’s Minister for Climate, Energy and Utilities, in a statement. 

The goal to make aviation a greener industry is an important one, but one that many American air carriers are taking upon themselves without the same kind of governmental direction as Denmark is proposing.

Yet the International Air Transport Association (IATA) says that due to low supply and high cost, sustainable aviation fuels need to be incentivized by the governments that have signed the Paris Climate Agreement.  

Marie Owens Thomsen

Marie Owens Thomsen

‘‘The first thing governments should do is create supporting policies to increase SAF production,” said Marie Owens Thomsen, SVP of sustainability and chief economist for IATA.

Tourist taxes have become a popular way to fund new tourism developments this year, and especially so for funding costly sustainability initiatives. Last month, officials in Amsterdam in the Netherlands announced it would increase its tourist taxes in 2024, raising a cruise passenger tax to USD 11.50 and charging hotel guests 12.5 pc the cost of their hotel room in order to help fund local services. When implemented, it would be the most expensive tourist tax in Europe. 

In September, Iceland announced it, too, would implement a tourist tax to help achieve its 2040 carbon neutrality goal and offset the environmental impact of tourism on the country’s natural resources.

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