Bill Would Prevent U.S.-Flagged Carriers From Abiding By EU-ETS

The announcement by the European Climate Commission that it would be pushing back the full implementation of the EU-ETS on Monday did not deter members of the U.S. House of Representatives from overwhelmingly approving a plan by U.S. Senators Claire McCaskill (D-MO) and John Thune (R-SD) (pictured below L-R), which the bill's authors say would protect American consumers and jobs from a European Union tax on the U.S. airline industry. The measure, which cleared the Senate before the election, passed on a voice vote in the House and now heads to President Obama's desk.

"All that's left to prevent the European Union from unfairly taxing American citizens is the President's signature, and I urge him to support this commonsense measure," McCaskill said in a news release following the House vote. "European governments taxing air travel in the United States has never made a bit of sense, and it's refreshing to be able to work across the aisle to protect American consumers from this kind of nonsense."

With McCaskill and Thune's legislation advancing in Congress, the European Union announced yesterday that it will delay the E.U. Emissions Trading System (E.U. ETS) for one year to allow time for an international agreement. "It's good that the E.U. has seen the writing on the wall, but it's important for the United States to act and show European governments that we oppose this misguided proposal," she said

ETS is an emissions trading program that levies a tax on U.S. airline carriers' flights into and out of E.U. countries. It is related to European countries' interest in reaching their own internal goals for carbon emissions. The E.U. program applies a "cap-and-trade" carbon tax system to all flights originating or landing in Europe-taxing even those emissions that occur over the United States, international waters and elsewhere outside Europe. Remarkably, these taxes are not set aside for a specific purpose, and could be used as part of the general fund of any European Union government for virtually any purpose.

The McCaskill-Thune legislation has the support of the U.S. Chamber of Commerce as well as unions representing airline employees. The bill was introduced in the House Transportation and Infrastructure Committee leaders, including Chairman John L. Mica (R-FL) and Aviation Subcommittee Chairman Tom Petri (R-WI) (pictured below L-R).

“This bill is a firm response by the United States Congress that this nation will not allow U.S. jobs and our aviation industry to be threatened by the EU’s unilaterally imposed and unlawful tax scheme,” Mica said. “Participation will put U.S. air carriers at a competitive disadvantage and lead to fewer aviation jobs for Americans.”
 
U.S. airlines have estimated that this European tax could cost more than $3.1 billion between 2012 and 2020, which will ultimately increase the cost to passengers.
 
“An emissions tax on other nations’ civil aviation operators while those flight are in EU airspace is one thing,” Mica said. “However, imposing this tax over the entire flight, the bulk of which may be in another nation’s airspace or over international waters, clearly violates international law and U.S. sovereignty. This scheme has the appearance of nothing more than a cash grab by a struggling European Union, as there is absolutely no requirement that funds collected by EU Member States be used to reduce aviation emissions.”
 
“The bottom line here is obvious,” said Rep. Petri. “The European Union seems not to have noticed that it is not sovereign in the United States and has no right to levy taxes here. The European Union also seems not to have noticed that it is not sovereign over the rest of the world, since the EU also intends to impose these taxes on the citizens and businesses of non-European countries worldwide. The non-Europeans have noticed, however, and have joined with us in protest. The delay announced by the EU yesterday is a temporary reprieve, but the message and intent behind this legislation remains unchanged.”

"The message could not be any clearer -- overwhelming bipartisan majorities in the House and Senate have spoken: EU ETS violates U.S. sovereignty and will not do what it purports to as the funds do not have to be used for environmental protection," said A4A President and CEO Nicholas E. Calio. "There is a better way to improve the environmental efficiency of the airline industry, and U.S.-based carriers are already leading those efforts."

Calio (pictured left) said A4A strongly supports efforts to gain full agreement on the global framework provisionally adopted by ICAO in 2010. U.S. airlines were among the global aviation leaders in developing this framework, which includes an industry commitment to a 1.5 percent annual average fuel-efficiency improvement through 2020 and carbon neutral growth from 2020 onward, subject to critical investments by industry and governments.

“We urge President Obama to swiftly sign this bill into law. By doing so, he will protect U.S. air carriers from paying an illegal tax and safeguard American jobs and the sovereignty of our nation,” said ALPA president, Captain Lee Moak (pictured above right). “We thank members of Congress for supporting this bill, which will allow the International Civil Aviation Organization [ICAO] to focus its efforts on creating a global solution to reducing aircraft emissions.”

Under the EU ETS, all airlines using EU airports would be required to pay significant taxes for each ton of carbon used over historical emissions. The EU ETS could cost U.S. carriers an estimated $3.1 billion over the next 10 years, which could lead to lost airline jobs.

FMI: www.house.gov