Splash247: EU mulls decade-long fuel tax holiday for shipping

European shipping companies look set to escape Brussels’ green taxman for another decade, with a draft proposal circulating in the European Union this week showing negotiators want to postpone levies on marine fuels until at least 2035.

The European Commission had originally proposed back in 2021 to bring shipping and aviation into line with other sectors by gradually introducing EU-wide minimum taxes on CO2-emitting fuels. But after years of pushback, the latest compromise text – drafted by Denmark, which holds the bloc’s rotating presidency – suggests the levies should be shelved until 2035, when Brussels will examine the possibility of finally taxing bunkers.

For now, only private yachts and the smallest aircraft may face any fuel taxes. Commercial aviation and shipping would maintain their longstanding exemption – an exemption the draft – seen by Reuters – says is needed to maintain the competitive position of European companies.

Negotiators will test the waters on the draft at a Brussels meeting on Friday. Unanimous approval is needed for any reform to pass. A final deal could be hammered out as early as November.