Norway Mulls Replacing Air Passenger Tax With Sustainability-Focused Levy

Norway’s air passenger tax could be replaced with a new form of taxation that takes the environmental impact of flying into account.

The country is consulting on a wider aviation strategy that “aims to contribute to sustainable Norwegian aviation.” Further details are expected to be announced in the autumn.

Ahead of the strategy being finalized, the government has revealed that it hopes to replace the existing air passenger tax “with a tax that has a real climate effect and a better geographical profile.”

Under the planned new model, four main factors will be taken into consideration: environmental, social, geographical, and economic sustainability.

Norway’s Ministry of Transport and Communications said it wants to put a framework in place that creates the conditions for carriers to operate profitably and without public subsidies.

It is hoped the proposals will push airlines to use the most eco-friendly aircraft and fuel types where possible, thereby reducing emissions. This could lead to the introduction of higher tariffs for older aircraft.

Another aim is to reduce prices and increase the number of services on short-haul routes. For so-called FOT (Forpliktingar til offentleg tenesteyting) routes—which are unprofitable services supported by state aid—the government hopes fares can be halved.

Norway introduced airline passenger fees in June 2016, charging up to 214 kroner ($24) per passenger at the highest rate. The decision was met with a strong reaction at the time and was a factor in the closure of Moss Airport, Rygge.

Although the existing tax is currently suspended as part of measures designed to aid the aviation sector’s recovery, it will be reintroduced from July 1.