Why Aviation Fuel Remains Untaxed: Legal Barriers to Aviation Fuel Taxation
Journal
Pace Environmental Law Review
Type
journal article
Date Issued
2025
Author(s)
Abstract
Aviation fuel remains largely untaxed worldwide, despite the sector's growing contribution to global greenhouse gas emissions. This article examines the legal foundations of this exemption and argues that it results less from fiscal necessity than from historical international law and institutional inertia. The Chicago Convention (1944), subsequent ICAO policy instruments, and a dense network of air service agreements have collectively constrained states' ability to tax aviation fuel, a stance reinforced by the delegation of aviation emissions to ICAO under the Kyoto Protocol. A comparative analysis of the European Union, Switzerland, and the United States shows that domestic frameworks replicate these international barriers. Yet, national and regional initiatives such as the EU and Swiss Emissions Trading Systems (ETS) demonstrate that innovation is possible outside the ICAO framework and without full global consensus. The article concludes by identifying Most-Favoured-Nation and national treatment clauses in Air Services Agreements-and ICAO's institutional role itself-as promising areas for further research at the intersection of aviation governance, international taxation, and environmental law.
Language
English
Refereed
No
Volume
43
Number
1
Start page
127
End page
153
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LIDEIKYTE_HUBER_Why_aviation_fuel_remains_untaxed_Pace_Env_Law_Review2025[50].pdf
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519.84 KB
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