Opposition Rising to European Emissions Trading Scheme

October 31, 2011

With European policymakers pushing for implementation of a plan for new taxes on aircraft carbon emissions in just two months, opposition in the U.S. and in other countries is growing more vocal.

Calling the measure a “tax grab by the European Union,” Rep. John Mica (R-7-FL), chairman of the House Transportation and Infrastructure Committee, brought to the floor of the full house HR 2594, the “European Emissions Trading Scheme Prohibition Act of 2011,” which prohibits the ne proposal, called the European Union Emissions Trading Scheme (EU-ETS), from applying to those flying commercial or general aviation aircraft into Europe. Mica’s measure passed overwhelmingly on October 24, and was sent to the Senate.

The vote came after Mica and a bipartisan Congressional delegation visited the Montreal headquarters of the International Civil Aviation Organization (ICAO), where the Florida congressman said, “This ill-conceived EU aviation tax scheme is a violation of international law.”

Mica’s colleague, Aviation Subcommittee Chairman Tom Petri (R-WI) agreed, telling ICAO representatives: “We are asking all nations to oppose this tax by the European Union in favor of a positive outcome which can be achieved by working with ICAO and the international community.”

It was a move long advocated by general aviation interests.

“We applaud the House of Representatives for passing this important measure, which sends a strong, unified signal to EU regulators that their planned Emissions Trading Scheme is unacceptable,” NBAA President and CEO Ed Bolen said. “Global aviation standards are overseen by the International Civil Aviation Organization, and any new standards should be decided by ICAO.”

The EU-ETS will tax civil aviation operations that operate in or over Europe based on the aircraft’s emissions and the length of the flight. But, as Steve Brown, NBAA’s Senior Vice President for Operations and Administration, pointed out, the tax would cover much more than just the portion of those flight operations actually undertaken in European airspace.

“A flight that originated in the United States and was going to land in Europe – say, Paris or London – would have to pay a carbon tax, an environmental charge, for its emissions,” Brown explained. “That would cover the entire length of the flight, even though it may have operated in European airspace for only ten percent of the flight duration. It would still have to pay the tax for the whole flight.”

The cost could amount to thousands of dollars per flight, Brown said.

A lawsuit by the U.S. airlines is pending before the European Union Court of Justice, Brown continued. ICAO could take action based on the filing of a formal complaint that the EU-ETS violates international treaties.

He also pointed out that 25 other nations have voiced their opposition to the EU-ETS. Among them: Canada, India, Japan, Korea, the United Arab Emirates, China, Mexico and the Russian Federation.

“Russia is saying, if the EU-ETS goes into effect, it will retaliate by increasing dramatically the en route fees it charges European airlines to operate in Russian airspace,” Brown said.

“If they don’t call it off, we will retaliate,” Prashant Sukul, joint secretary of India’s ministry of civil aviation, was quoted as telling the industry publication Aviation Week. Officials in China have also indicated they will retaliate against a unilateral EU decision.

But those dire warnings have so far failed to sway members of the European Court of Justice. Juliane Kokott, the court’s Advocate General, advised justices that EU-ETS is indeed compatible with international law. A final decision is expected by the court early next year, but the EU court generally follows advice rendered by the Advocate General. The European Union itself is not bound by the Chicago Convention on Civil Aviation, the 1944 international accord which eventually led to the creation of ICAO, though all of the EU member states are.

With all of this in mind, operators currently participating in monitoring, reporting and verification activities should continue providing the required data to their assigned EU member state until a final decision on the future of the ETS is made.