EU nominee for climate chief wants global fossil fuel taxes

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The EU nominee for climate chief has proposed taxing fossil fuels on a global basis, including those used by the airline and shipping industries, so as to provide money for a fund to help developing countries suffering from carbon pollution.

Wopke Hoekstra, the former Dutch foreign minister, told a confirmation hearing with EU lawmakers on Monday that he would try to unlock international talks about the planned “loss and damage” fund by suggesting raising money for it through fuel levies.

International agreements exempt global transport from fuel taxes, although the EU emissions trading scheme covers aviation and will be extended to shipping next year.

“I want to explore an international kerosene tax, a maritime levy, a fossil fuels tax, even a share of [the EU emissions trading scheme] proceeds — no stone should be left unturned,” Hoekstra said in evidence to the European parliament’s environment committee. 

The EU scheme obliges businesses to pay to emit carbon dioxide, with the revenues — more than €25bn is raised annually — mainly going to member state budgets. Hoekstra said the revenues would increase “exponentially”. 

Bas Eickhout, a Dutch Green MEP, questioned Hoekstra’s “credibility” on fuel taxes because such decisions require unanimity among EU countries. “Any individual member state can block that,” he told the environment committee.

Jutta Paulus, a German Green MEP, said after the hearing: “Hoekstra knows very well that an agreement on any global tax would be either insubstantial or delayed or both.”

The nomination of Hoekstra as EU climate commissioner follows the departure of the previous holder of the post, Frans Timmermans, to run in Dutch elections in November. 

Hoekstra, a centre right politician who has been criticised by some MEPs for his time working for oil company Shell, promised “continuity, ambition and outreach”. 

But the change of EU commissioner comes at a delicate time for the bloc as it faces resistance to its green agenda from industry and conservative politicians, and just weeks before the UN COP28 climate summit. The EU is traditionally one of the most ambitious negotiators at the UN events.

International talks over the size and format of the proposed loss and damage fund have been fraught since the concept was first agreed at the UN COP27 climate summit in Sharm-el-Sheikh last year.

Officials are pushing to agree a structure for the fund before the COP28 summit in December, but divisions over whether it should be overseen by one of the multilateral development banks or exist as a standalone entity, and where the money should come from, have caused gridlock in the talks. 

Western nations, which developing countries say should shoulder the responsibility of paying for climate change, have said the fund should not be treated as an “ATM” that states can tap for compensation for damage resulting from carbon pollution, according to officials involved in the talks.

US and EU officials are aiming to establish a targeted fund that addresses specific climate risks, and people close to the talks said that there had been some progress in recent weeks.

In written evidence ahead of the confirmation hearing, Hoekstra said the decision to establish “loss and damage funding arrangements, including a fund, was a historic milestone” but that “one fund on its own will not be the silver bullet”.

He also said finance should come from “all countries that are in a position to provide support”, a veiled reference to western nations pushing China and Gulf states to pay into the fund despite their status as developing countries.

Hoekstra apologised to the environment committee for blocking for several months the establishment of an EU fund to support poorer member states when he was Dutch finance minister during the Covid pandemic. “I showed insufficient regard for the difficulties faced by some member states,” he said. 

If two-thirds of the committee’s members supports Hoekstra’s nomination, the parliament will vote on Thursday.

Although its opinion is only advisory, European Commission president Ursula von der Leyen is expected to accept parliament’s view.

A petition by campaigners against Hoekstra’s appointment as EU climate commissioner has attracted more than 104,000 signatures.

Hoekstra has been criticised for, while Dutch finance minister, approving a multi billion euro bailout of the airline KLM during the pandemic without stipulating that it cut emissions.