December 5, 2019 / 1:10 PM / 3 months ago

EU finance ministers back energy tax reform, singles out aviation

FILE PHOTO: An umbrella with the pattern of the EU flag is seen outside the Houses of Parliament in London, Britain, October 17, 2019. REUTERS/Hannah McKay

BRUSSELS (Reuters) - European Union finance ministers agreed on Thursday to support reform of the bloc’s energy taxation system, including a possible change in how the aviation sector is taxed, a step that could end tax waivers for air and sea transport.

The agreement by the ministers from all 28 member states at a meeting in Brussels is the latest attempt by the EU to update the bloc’s energy tax system to meet its ambitious climate targets.

By increasing taxes on more polluting energy products, it could more effectively contribute to the fight against climate change.

A reform has been long in the making and the EU’s current rules on energy taxation have not changed for more than 15 years, leading to a rule book that has repeatedly been called “outdated”.

In a statement on Thursday after their meeting, the finance ministers called on the European Commission, the sole EU body that can propose legislation, to “update provisions” The group calls on the European Commission, the sole EU body that can propose legislation, to “update provisions” for an EU energy tax system, and singled out aviation as one of the sectors that could see reform for an EU energy tax system, and singled out aviation as one of the sectors that could see reform.

Opposition to changing the existing rules from member states is likely to remain strong, but the Commission’s new president Ursula von der Leyen has promised big changes and is expected to invest much of her political capital on the reform.

EU tax overhauls are made more difficult by provisions that require unanimous support from all member states to carry them out and similar ambitions to reform the energy taxation system were struck down in 2015.

Reporting by Jonas Ekblom; Editing by Emelia Sithole-Matarise

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