Sweden has announced controversial plans to scrap its tax on airline tickets from 2025.
While the International Air Transport Association (IATA) is delighted with the choice, environmentally-focussed politicians and campaign groups are against the decision.
So, why is it happening?
The Swedish government have decided the tax’s negatives outweigh the positives
Since 2022, the Sweden Democrats party – a nationalist and right-wing populist outfit – has been the largest member of the country’s right-wing governing bloc.
This week, their MP told a press conference that the abolition of the tax “will lead to lower prices for travellers and rising demand, boosting the competitiveness of airlines”.
The Swedish minister of infrastructure and housing Andreas Carlson, a member of the Christian Democrats, praised the decision, saying it “will enable investments in Swedish aviation and make Sweden more competitive”.
Currently, the aviation tax is applicable to all commercial passenger-carrying flights departing from a Swedish airport with 10 seats or more.
Originally introduced in 2018, it ranges from 76 SEK (€6.70) for European destinations to 504 SEK (€44) for destinations further afield and has risen slightly since it came into force.
What was IATA’s reaction to the government’s aviation tax announcement?
After hearing the announcement, the IATA, which represents airlines, released a statement praising the “excellent news, which recognises that the taxation of air passengers is counterproductive economically and ineffective environmentally”.
They added that Sweden’s post-pandemic air recovery has been significantly worse than much of the rest of Europe’s and said it was a problem “made worse with the tax”.
The scrapping “shows the Swedish government is serious about restoring access to air travel for all its citizens across the whole country,” Rafael Schvartzman, IATA’s regional vice president for Europe, said.
He also claimed that the aviation industry’s goal of reaching net zero by 2050 “will not be achieved by pricing people off planes,” suggesting that the solution is to instead “invest in sustainable aviation fuels and other technologies”. Sustainable Aviation Fuels are currently available in far lower quantities than would be needed to replace diesel for every airline.
The current government, a right-wing coalition made up of the so-called Tidö parties, had previously floated the idea of halving the flight tax – but have now gone one step further.
Research shows that the aviation tax has helped improve the climate
Researchers, including those at Chalmers University engineering and Technology Department and Sweden’s KTH Royal Institute of Technology, have revealed that the proposal to do away with the tax entirely “rests on very dubious foundations”.
They discovered that the existing flight tax likely has a greater climate effect than predicted and suggest that the government is severely underestimating the emission increases that would be the effect of a halved aviation tax, let alone an entirely abolished one.
Both the Swedish Environmental Protection Agency and the Green Party have raised concerns over the decision.
The spokesperson for the Greens, who were involved in introducing the flight tax, was particularly critical.
“This is another example of this government’s irresponsible climate policy. They have made it more difficult for wind power, worsened the reduction obligation and now this, in a situation when we have to invest in climate change,” Amanda Lind said.
Jonas Åkerman, a leading aviation researcher at KTH, has also called the choice “remarkable”.
Speaking to the Swedish newspaper Dagens Nyheter, he said, “Even with the aviation tax that has been, aviation has had a proper tax exemption, which amounts to several billion kroner. It is remarkable that the tax exemption is being increased in a sector that accounts for a very large climate impact. It is as if you had zero percent VAT on fossil cars.”
Earlier this year, Åkerman, together with colleagues from Chalmers, the Swedish University of Agriculture SLU and the Gothenburg School of Economics, submitted a consultation response to the original proposal to halve the aviation tax.
He is baffled by the government’s decision to take it even further, and says that aviation in Sweden has almost as large a climate impact as all passenger car traffic in the country.
While the government has justified the reduced aviation tax by saying it’s important for their trade relationship with the EU, Åkerman is less convinced.
“This only covers travel within the EU,” he said, “And it also does not take into account the flight’s high-altitude emissions, which account for around 40 per cent of the flight’s total climate impact.”
