A new net-zero ‘flight tax’ on airlines to use green fuel could add hundreds of pounds to the cost of family holidays.
Airlines are being forced to fill their planes using at least 2 per cent green fuel, rising to 10 per cent and then 22 per cent by 2040, under a new Labour policy introduced last week.
But the Government’s own impact assessment admits this will add up to £302.40 to the price of plane tickets for a family of four.
The document, first seen by the Sunday Telegraph, reveals that as much as 80 per cent of the cost of the new levy risks being passed onto consumers.
Some airlines, such as Virgin and Lufthansa, have raised the prospect of implementing green levies due to the increased use of Sustainable Aviation Fuel (SAF).
The International Airlines Group, owner of British Airways, has already warned that the SAF mandate will lead to higher prices. Production of SAF in the UK costs seven times as must as jet fuel.
The Government’s cost-benefit analysis of the policy suggests, in the worst case scenario, the price of an average one-way ticket from a UK airport would increase by £37.80.
Esther McVey, a Conservative MP, said: ‘Here is a prime example of net-zero fanaticism flying in the face of common sense. This edict won’t change the world’s climate, but it will take even more money out of the pockets of hard-working families seeking a well-earned break.
‘This is another example of Labour putting socialist ideology ahead of the interests of the public they are elected to serve.’
In the October Budget, the Chancellor hiked Air Passenger Duty (APD) – a stealth levy on fares also known as the ‘holiday tax’ – by 15 per cent on most flights, which is more than five times the current 2.6 per cent rate of inflation.
By April 2026, when the changes come into effect, APD for short-haul European destinations such as Spain will have surged 200 per cent since 1994, compared to 111 per cent for inflation.
It means air fare levies for a family of four to popular destinations such as Walt Disney World in Florida will surge above £400 for the first time after the hike.
A government spokesman said: ‘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.’