Briefing

Towards a European Fuel Tax agreement

May 20, 2015

A fuel tax agreement operates in the US and Canada which is known as the International Fuel Tax Agreement, or IFTA. Under the IFTA, truck operators (hauliers) record distance travelled and fuel consumed within each state/province (jurisdiction). Tax paid where fuel is purchased is later reconciled against actual use. Thanks to this reconciliation process, hauliers obtain a rebate from some jurisdictions and pay additional taxes to others.

Briefing: Towards a European Fuel Tax agreement

Significant differences in tax rates between neighbouring states/provinces are sustained under this system because the haulier ultimately pays tax at the rate where travel actually takes place. For example, Pennsylvania’s fuel tax is approximately 46 cent per gallon higher than New Jersey’s, but thanks to the IFTA, tax distortion (‘fuel tourism’) does not occur. This briefing outlines how the IFTA model could be enhanced and adopted for the EU.

View All

Report

T&E's annual overview of key transport trends, challenges and achievements

State of Transport 2025

European transport is still heavily reliant on fossil fuels, but electric vehicles are on the charge as the EU’s green policies start to bite. Powerin...

March 18, 2025

Press Release

Europe set to save 20 million tonnes of CO2 this year thanks to switch to EVs

State of European Transport report shows that transport emissions are starting to fall as the EV market grows, but carbon savings are being undermined...

March 18, 2025