European Union imposes emissions tax on US passengers, airlines

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Michael Bastasch DCNF Managing Editor
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As of Jan. 1, 2012, the European Union expanded its Emissions Trading Scheme (ETS) to cover all airlines, including non-European airlines.

An emissions tax will now be levied on all flights traveling to and from the EU, meaning U.S. passengers will be forced to pay a tax for the entirety of their flight — not just the portion over EU airspace — hiking flight costs and causing governments around the world to accuse the EU of assaulting their sovereignty.

The ETS, which was launched in 2005 with the intention of combating climate change, has been met with resistance from countries including China, India, Russia, Japan and Brazil. There has been political backlash in the U.S. as well: south Dakota Republican Sen. John Thune has come out against the tax, citing its effect on the economy and its violation of international law.

“The unilateral imposition of the EU Emissions Trading Scheme is a violation and is hurting U.S. airlines, manufacturers and consumers,” Thune said on the Senate floor.

According to a press release by Thune’s office, the tax will cost U.S. airlines and passengers $3.1 billion dollars between 2012 and 2020.

Last year, Thune introduced the European Union Emissions Trading Scheme Prohibition Act of 2011, which would prevent the EU from levying a tax on flights traveling through U.S. airspace. Currently, the bill is sitting in the Senate Committee on Commerce, Science, and Transportation.

“The idea that the European Union has the right to tax American air passengers and carriers flies in the face of our country’s sovereignty,” Thune said. “I reject this proposed European tax and will work with my colleagues in Congress and countless concerned stakeholders to block this tax.”

“Even the Obama administration,” he added, “testified before the House Committee on Transportation and Infrastructure in July of 2011 that an EU ETS is inconsistent with international aviation law.”

The airline industry has also come out in opposition to the tax.

According to trade association Airlines for America (A4A), “the EU and its states are in violation of the Convention on International Civil Aviation,” which is “fundamental to enabling airlines to transport people and critical goods around the globe without undue trade blocks and interference.”

A4A also notes that none of the funds collected through ETS are required to go towards environmental purposes: “[T]he EU ETS will siphon away to European coffers the very funds our airlines need to continue investing in the technological, operational and infrastructure improvements required to meet our emissions targets. This is truly anti-environment,” A4A wrote in a statement.

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