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Draft shows that the EU is considering a 10-year tax break for jet fuel and shipping fuels.

A draft document that was seen by revealed that the European Union is considering delaying the introduction of EU-wide fuel taxes for aviation and shipping for a period of 10 years in order to complete long-delayed reforms to energy taxation.

In 2021, the European Commission proposed a revision of energy tax regulations to be in line with efforts to curb climate change. The EU proposed gradually introducing tax on CO2-emitting jet fuels used for flights and ships within the 27 nation bloc. These fuels are currently exempt from EU minimum levies.

A draft EU negotiation proposal revealed that governments resisted changes and now consider a 10-year delay in which fuels for aircraft and ships would retain their current EU tax exemption.

The directive stated that the Commission "should examine the possibility of taxation in 2035 and propose amendments where appropriate to this Directive."

The EU's negotiators are meeting on Friday in Brussels to discuss the compromise.

The draft stated that only small aircraft, with a maximum 19 seats, as well as boats classified as "private pleasure crafts", could be taxed before the 10-year period is over.

It said that the exemption was designed to "maintain the competitive position of Union businesses."

The EU has already introduced minimum tax rates on other fuels such as petrol and electricity used in automobiles. Climate activists have called for tax reforms to encourage cleaner fuels and discourage the most inefficient and dirty ones.

It is difficult to change the EU tax policies because they require unanimous approval by all EU member states.

EU diplomats have said that countries with a large shipping sector and those with a large tourism industry are resistant to change.

The previous proposal, which sought to exempt temporarily island nations like Ireland, Malta and Spain and countries with islands, such as Spain, from the ban, failed to gain enough support.

Denmark, the rotating EU presidency, drafted the latest document. The EU presidency of Denmark said that it was aiming for the countries to come to an agreement on tax changes by November.

(source: Reuters)