Holidaymakers face higher air fares as new Budget ‘green tax’ on imported fuels announced by Chancellor John Healey could apply to jet fuel

Chancellor John Healey has proposed extending the UK’s carbon border charge to imported refined fuels, including jet fuel. The measure is intended to bring imported fuel closer to the net zero costs faced by British refineries, but could raise costs for airlines and holidaymakers.

The charge, known as the Carbon Border Adjustment Mechanism (CBAM), is due to begin on aluminium, cement, fertiliser, hydrogen, and iron and steel from 1 January next year. A Budget consultation proposes adding petrol, diesel and jet fuel; the UK imports more diesel and jet fuel than it exports, and the consultation says higher costs could reach households and other end-users. Airlines UK says the proposal could push up fares and affect the country’s aviation competitiveness.