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Bill Prohibits U.S. Airlines Taxes in Illegal European Emissions Scheme

Washington, DC – Bipartisan House Transportation Committee leaders will introduce legislation today to ban U.S. air carriers from participating in the Emissions Trading Scheme that would tax U.S. airlines flying into and out of the European Union.

The “European Union Emissions Trading Scheme Prohibition Act of 2011” (click here for text) is a strong response to EU plans to impose a costly fee on any civil aviation operators landing in or departing from EU airports.  Beginning on January 1, 2012, all airlines would be forced to participate in the EU’s emissions scheme despite the objections of the United States Government and now Congress.

The bill was introduced by Transportation and Infrastructure Committee Chairman John L. Mica (R-FL), Transportation Committee Ranking Member Nick J. Rahall (D-WV), Aviation Subcommittee Chairman Tom Petri (R-WI), Aviation Subcommittee Ranking Member Jerry Costello (R-IL), Congressman Bill Shuster (R-PA), and other Members of Congress.

“This unjust European Union emissions trading scheme is a clear violation of international law that puts U.S. air carriers at a competitive disadvantage, kills U.S. aviation jobs, and may lead to a trade war,” Mica said.  “This bipartisan measure sends a clear message to the EU that the United States will not participate in this ill-advised and illegal EU program.”  The U.S. formally lodged protests at meetings in Oslo, and Members of Congress confronted EU leaders on the matter in other recent meetings.

“The European Union plans to unilaterally thrust an emissions trading scheme upon U.S. airlines in violation of international agreements and laws,” said Rahall.  “To boot, this trading scheme looks more like a shell game to shuffle the money around because no one can say with certainty that the money will be used for its intended purpose.  By introducing this bill, we are not flatly rejecting the notion of a system for controlling carbon dioxide emissions.  Rather, just as the Obama Administration has done, we are rejecting the go-it-alone approach taken by the EU that directly infringes on the sovereignty of the United States.

“The European Union is proposing taxes on the US aviation industry and the American flying public,” Shuster said.  “This violation of sovereignty is unacceptable and we on the Transportation and Infrastructure Committee, Republican and Democrat alike, will not allow this unilateral action by the EU to stand.”

“At its essence, the issue is simple,” said Petri.  “The European Union intends to impose a tax on American citizens and American businesses for activities which take place in the United States.  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 EU decision to unilaterally include the United States in its carbon trading regime is counterproductive and will be costly for U.S. airlines,” said Costello.  “We should continue to work through ICAO on a global system that makes sense economically and environmentally, and that is what our bill ensures.”

The bipartisan legislation directs the Secretary of Transportation to prohibit U.S. aircraft operators from participating in the EU’s Emissions Trading Scheme (ETS).  The bill also instructs U.S. officials to negotiate or take any action necessary to ensure U.S. aviation operators are not penalized by any unilaterally imposed EU emissions trading scheme.

The United States Government has formally objected to the ETS.  Under the scheme, any flights into or out of an EU airport, regardless of how long that flight is in EU airspace, would be subject to the program’s emissions cap and trade requirements.  U.S. airlines would be required to pay an emissions tax to the EU Member State to which they most frequently fly.  

Even if the U.S. consented to this unilateral program, there is no requirement that this revenue go to emissions related research and development.  The ETS also lacks any transparency or clarity, providing no guidance as to how the EU will apply the ETS to international air carriers.

In addition to the United States, China, Australia, Canada, and numerous other countries have expressed objections to the application of ETS to their air carriers.  

The U.S. has made it clear that International Civil Aviation Organization (ICAO) policies, standards and recommended practices should provide the framework for any measures to address international civil aviation emissions issues.  The U.S. is undertaking initiatives under the Next Generation Air Transportation System (NextGen), as well as working at ICAO on such initiatives as the development of a meaningful CO2 standard.  

U.S. airlines have also challenged the policy before the European Court of Justice as a violation of international law.

The U.S. aviation sector has a strong record of fuel efficiency and emissions improvements and continues to work with the government to advance technological, operational, infrastructure and alternative fuel opportunities for further improvements.