Government’s response: Air Passenger Duty (APD) is the Government’s principal tax on the aviation sector since tickets are VAT free and aviation fuel incurs no duty. Its primary objective is to ensure that airlines make a fair contribution to the public finances. As mentioned in the Committee’s report, the Consolidated Fund receives the proceeds of APD and other tax revenues, such as those collected by Her Majesty’s Revenue and Customs. APD is not a hypothecated tax. It is worth noting that the UK’s Emissions Trading Scheme (ETS) is part of the wide range of measures that the Government has put in place to support the decarbonisation of the aviation industry. The ETS covers participants from the aviation, power and industrial sectors. It sets a total annual cap on greenhouse gases emitted by these sectors and covers domestic flights within the UK. flights from the UK to the EEA, and flights between the UK and Gibraltar. The other measures, as mentioned previously, include supporting progress towards low and Zero Emission aircraft technology (by providing £685m of funding towards aerospace research and development over the next three years) and £180 million to accelerate the commercialisation of SAF plants and fuel testing in the UK.