Source · Select Committees · Environmental Audit Committee
Recommendation 26
26
Accepted
Conduct wider review of aviation taxation to ensure 'polluter pays' principle is upheld.
Recommendation
Government should also conduct a wider review of aviation taxation to ensure that the ‘polluter pays’ principle is upheld, and the aviation industry does not receive benefits which are denied to other important industries. The aviation industry will then be incentivised to decrease emissions. (Recommendation, Paragraph 113)
Government Response Summary
The government stated that Air Passenger Duty and carbon markets like the UK ETS and CORSIA already incorporate the ‘polluter pays’ principle and drive decarbonisation, without committing to a wider review of aviation taxation.
Government Response
Accepted
HM Government
Accepted
Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector. It is expected to raise £4.7 billion in 2025–26 and it aims to ensure that airlines make a fair contribution to the public finances. Although APD is not an environmental tax, it is aligned with the government’s environmental objectives because it incorporates a ‘polluter pays’ principle, meaning that those who fly the furthest – and so produce more emissions – incur the largest APD liability. As noted in response to recommendation 11, the Government uses carbon markets, such as the UK ETS and CORSIA, to drive decarbonisation of the aviation sector. By pricing CO2 emissions, market-based measures can drive cost-effective and technology-agnostic emissions reductions, making operational efficiencies, sustainable aviation fuel and zero emission flight more economically attractive. They also implement the ‘polluter pays’ principle – that those who engage in activity that has an environmental impact should bear the cost of that impact.