WRITTEN QUESTION E-2515/96 by Hiltrud Breyer (V) to the Commission (25 September 1996)

Subject: Subsidies for air transport

The EU Commission has published a Green Paper on 'Internalizing the external costs of transport in the European Union' (COM(95)0691 final).

1. What is the position of the Commission with regard to the fact that, in Germany alone, exemption from oil tax and support for aviation technology amounts to DM 3.5 billion in annual subsidies (German Bundestag, 13th electoral period, Circular 13/4108)?

2. What figures can the Commission put on the amounts paid in the other Member States, listed for each individual EU Member State, in subsidies in the form of oil-tax exemption and support for aviation technology?

3. What figure can the Commission put on the revenue accruing from the taxation of kerosine in the EU:

(a) on the basis of the current rates of oil tax, harmonized at EU level, and

(b) when the internalizing of the external costs of air transport is incorporated in the rates of the tax?

4. When does the Commission intend to introduce measures to end tax exemption for kerosine?

Answer given by Mr Monti on behalf of the Commission (2 December 1996)

1. Fuel used in commercial aviation is exempt from excise duty under the provisions of Article 8(1)(b) of Council Directive 92/81/EEC ((Council Directive 92/81/EEC of 19.10.1992 on the harmonisation of the structures of excise duty on mineral oils (OJ L 316, 31.10.1992). )). This provision exists largelybecause of international commitments under

which all contracting parties to the International civil aviation organisation (ICAO) have entered into reciprocal agreements to supply aircraft fuel free of all taxes. All Community Member States are members of ICAO, while the Community has had observer status since 1989.

2. Support for aviation technology is given in a variety of ways including development and procurement of defence goods which provide civil spin-offs, loans for product development and generic as well as specific funding for research. The Commission does not have detailed information on each of these items. However, a Commission staff working paper 'The European aerospace industry - trading position and figures' contains a limited amount of aggregated data based on company and industry association surveys.

3. a) The revenue accruing from the taxtion of kerosine is difficult to quantify as the harmonisation of excise duty rates on mineral oils is restricted to agreed minimum rates with Member States being free to charge whatever level of duty they wish provided it exceeds that minimum.

If aviation kerosene were to be taxed at the same rate as that agreed (but waived) for national carriers in the United States (4.3 cents per US gallon) the revenue accruing would be in excess of 250 MECU. If duty was levied at the current Community minimum rate for kerosene used as a propellant (245 ECU per 1000 litres), the revenue accruing would exceed 8 000 MECU.

3. b) This information is not yet available.

4. The Commission is reviewing the operation of Article 8(1)(b) of Directive 92/81/EEC and will submit its conclusions to the Council and Parliament in the near future.