The cost of a family holiday could be set to skyrocket after a new net-zero ‘flight tax’ was imposed on airlines by the government last week.
New rules will see airlines forced to use at least 2 per cent green fuel, rising to 10 per cent by 2040. This is despite the government’s own analysis showing the knock-on potential of price inflation for consumers.
This ‘green fuel’ will see biodiverse alternatives such as cooking oil and animal waste combined with traditional jet fuel in a bid to lower industry emissions and meet the government’s net-zero initiatives.
Some forecasts of the so-called Sustainable Aviation Fuel (SAF) legislation state that the cost of flying could rise by up to 20 per cent as a result of this ‘flight tax’.
The introduction of this new fuel charge comes off the back of multiple airlines having already imposed environmental surcharges.
Airlines such as Virgin and Lufthansa have recently announced the implementation of optional alternative fuel charges, although Virgin is yet to officially roll this out to consumers.
British Airways owner, the International Airlines Group, has also warned that the SAF mandate will result in higher flight prices.
Moreover, Chancellor Rachel Reeves only last October announced a 15 per cent increase in Air Passenger Duty which could add up to £400 to the price of certain family holidays.
British Airways owner, the International Airlines Group, has warned that the SAF mandate will result in higher flight prices
The government’s own impact assessment of the SAF mandate shows that prices for a family of four could rise by £302.40 by 2040
Production of this SAF is currently a costly endeavour when compared to traditional jet fuel, with concerns rising around its future supply should demand increase.
According to British chemicals firm Johnson Matthey, SAF can be up to seven times more expensive than the regular version.
The government’s own impact assessment of the SAF mandate, which was seen and reported on by the Telegraph, shows that prices for a family of four could rise by £302.40 by 2040.
Forecasts also show estimations that up to 80 per cent of this new levy could be passed on to consumers.
Should the supply of SAF become limited, the forecast becomes even bleaker for holidaymakers as prices could rise by nearly £40 per ticket for a one-way flight from a UK airport.
The government has attempted to caveat these predictions though by stating they are strictly modelled around worst-case scenarios.
In its most optimistic outlook, average one-way prices would rise by £3.90 by 2030 and £9.40 by 2040 due to the SAF mandate.
British Energy Secretary Ed Miliband has overseen the Labour government’s drive towards net zero targets
Speaking to the Telegraph, former business secretary Sir Jacob Rees-Mogg labelled the new legislation as ‘green madness’ and called for it to be scrapped.
‘Net zero is a destructive burden that is ruining businesses and impoverishing the nation with no benefit to the climate. All these targets, cars, aeroplanes, heat pumps, should all be dropped and prosperity prioritised’, the former MP stated.
In light of the pushback around the new ‘flight tax’, a government spokesperson stated: ‘We want to give people the freedom to travel in a more sustainable way while protecting them from high ticket costs, and it is estimated that the move to greener fuels will add less than £4 to ticket prices.
‘Our pledge to use more sustainable aviation fuel, part of our Plan for Change, will support thousands of jobs, bring down our transport emissions, and make the UK a clean energy superpower’.