(Bloomberg) -- The Swedish government plans to scrap an aviation tax from July next year to help domestic business in a controversial move that is also expected to increase carbon emissions in the country that coined the phrase “flying shame.”
The measure, announced at a news conference on Tuesday, is part of the government’s 2025 budget bill, which will also include additional spending on infrastructure upgrades, research and innovation as well as tax relief for foreign experts.
The Swedish government has been criticized for backsliding on climate policies after previous spending plans that led to increased emissions. Critics argue that the cabinet has no credible plan to reach ambitious climate targets and that the country earlier seen as a forerunner on the issue is losing this position.
Shares in Norwegian Air Shuttle rose as much as 6.4% in Oslo, the most since July, following the news.
Aviation has long been highlighted for its contribution to global emissions, and arguments against air travel from climate activists such as Greta Thunberg have taken root in her home country, where the concept of “flying shame” has dented airline traffic. The tax, now at 76 kronor ($7) per passenger for travel domestically and within the European Union, was introduced in 2018.
Energy and Business Minister Ebba Busch said the measure, which is expected to lead to a short term increase of carbon dioxide, is part of a strategy of moving from national climate policies to integrating Sweden’s plans with those of the European Union. The bloc will put in place mandates requiring airlines to use 2% sustainable aviation fuel starting next year.
“It is very important for large parts of Swedish enterprise to keep domestic airports and a minority of European Union countries have aviation taxes, which makes it a competitive disadvantage,” she said.
The proposal will be submitted later this month to parliament, where the government holds a majority together with the nationalist Sweden Democrats, which has agreed on budget measures with the three ruling parties.
(Updates with market reaction, quotes from business minister from third paragraph)
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