European Union Carbon Tax on Airlines

The European Union has passed a law, effective as of January 1, 2012, that would expand its pre­existing cap and trade regimen to foreign airlines, and which would tax all airlines flying into the EU airspace in 2012 and thereafter based on their carbon emissions. The law is referred to as the Emission Trading System (ETS) and requires all airlines to provide to the EU emission data so that a tax can be calculated and collected beginning in 2013. The tax is said to be applicable not only to flight miles within the EU, but also to the dis­tance over their entire flight path. The tax money would go to all 27 members of the EU as well as to Iceland, Liechtenstein, and Norway. (All of the EU, with the possible exception of Germany, is in dire need of additional cash, without question.)

There has been worldwide opposition to the EU action, with United States airlines requesting President Obama to file an Article 84 complaint with ICAO, which would create a global frame­work for dealing with carbon emissions and would provide the appropriate forum for the settlement of the dispute. The United States and Canada filed an action in 2011 with the European Court of Justice to block the tax on grounds of sovereignty and treaty, but they were ruled against in December 2011. The U. S. aviation community is also calling on the federal government to challenge the law in international court. The United States has also taken unofficial action in convening two meetings (in Delhi and in Moscow) of opponents of the law and has invoked a resolution in ICAO declaring the EU law illegal. Russia, China, the United States, and India have formed an anti-carbon tax coalition to oppose the law.

□□□□□□□□□□

□□□□□□□□□□

Consequences, if the EU persists, could include a worldwide embargo on Airbus aircraft and limitations on flights into Europe.

The United States has consistently refused to join what it has considered ineffective world efforts to lessen carbon emissions; it refused to sign the Kyoto Treaty, for instance. The EU ETS system, as well as any ICAO strategy to be put together to control airline engine emissions, seems like just one more global effort along the same lines, in spite of the miniscule contributions attributed to aircraft engines.