PalQ

European commercial airlines buy fuel tax-free under special accords that were meant to ensure fair competition between all airlines based in any EU country.
But railways have to pay taxes on their fuel and electricity so the DB (German Railways) filed suit in the European Court of First Instance as this exemption gave airlines an undue competitive benefit over trains.
DB figured that the jet fuel exemption amounted to a 20 euro reduction per person for a hamburg-munich flight. DB pays about 380 million euros a year in energy taxes.
But DB lost the case, so planes continue to have an edge in fuel costs.

PalQ

DB lost the case only because the court did not want to get into the matter of fair competition between modes of transit - if it did and if it were looking out for the consumer's interest. why should trains have to pay fuel or energy tax and planes not?
And then Europeans complain now about heat from global warming - well known that airplane entrails are one of the leading causes! I'd say tax the jet fuel but not the trains.

flanneruk

PalQ is spectacularly missing the point.

Matters of competition policy are simply ultra a national court's vires. Especially since the duty-free status of jetav is the result of an international treaty - which no court is empowered to set aside.

Europe's governments can't put tax on jetav because to do so would require treaty renogiation. And guess which (non-European) government has signalled it's not prepared to negotiate?

Living under the rule of law is obviously something some nationalities can't get their heads around.

PalQ

But what is to prevent a member state from abolishing the tax on train fuel in order to improve the environment? Why does Germany and i presume other EU states tax train fuel as it only encourages flying, which is much more environmentall destructive it seems.
PS - I spectacularly got your point! Flanner- you do have a way with words and I love it, even when like in the VAT discussion - well not really discussion because it was one sided, i was the target of them - signed preposterous hyprocrite!

flanneruk

There's nothing to stop a member state abolishing tax on fuel for surface transport. Indeed a number of member states do rebate some fuel taxes to public transport operators, though some environmental campaigners (a group who rarely strain themselves unduly to get their facts right) try to pretend they don't.

But that's a matter for the legislature: it's got nothing to do with the courts.

There is, though, a strong environmental argument for keeping tax high on all forms of fuel for all users. The few members of the environmental lobby who understand that taxes are often rebated to transport operators (via, for example, Britain's Bus Service Operator's Grant) sensibly arge that such rebates kill the incentive on operators to use more fuel-efficient technology. Cheap fuel means gas-guzzling buses.

The answer absolutely has to be for Europe's governments to pull out of the treaties that exempt planes from fuel tax. Back in the old days, tearing up treaties that had passed their sell-by date was what governments were there for. In these debased, litigation-crazy, times that's no longer possible.

So we have to persuade our transatlantic cousins to see things our way. The fact that US supporters of that point of view include Al Gore and the Gubernator does rather complicate things. Even the best policies can attract some jolly flaky supporters.

PalQ

For once i totally agree with you.