U.S. House Votes to Halt Controversial EU Air Tax

The U.S. House of Representatives has voted against U.S. participation in the European Union’s costly emissions trading scheme (ETS) that would impose new emissions taxes on U.S. and other nations’ air carriers flying into and out of the EU.

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 (D-IL), and other Members of Congress. The Committee unanimously approved H.R. 2594 on September 8, 2011.  It was introduced on the House floor on July 29, 2011. On October 31, 2011, the House sent an enrolled version of the bill to the Senate.

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.

Its sponsors wrote that the bill “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.”

In mid-October 2011, Mica, Petri and other Members of the Committee led a bipartisan Congressional delegation to Montreal to meet with International Civil Aviation Organization (ICAO) leaders, representatives of the EU, and other officials regarding U.S. opposition to the EU’s tax scheme. ICAO is the primary organization that sets international aviation standards.

If imposed on January 1, 2012, the EU aviation tax scheme would apply to U.S. and other nations’ flights into or out of an EU airport, regardless of how long that flight is in EU airspace. Airlines would be required to pay an emissions tax to the EU Member State to which they most frequently fly, without any requirements that EU countries even use these fees in aviation emissions reduction efforts.

H.R. 2594 prohibits U.S. aircraft operators from participating in the 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 scheme.

The Obama Administration testified before the House Committee on Transportation & Infrastructure in July that the EU ETS is inconsistent with international aviation law.

According to additional testimony from that hearing, the Air Transport Association suggested that this scheme would cost U.S. airlines more than $3.1 billion between 2012 and 2020, which could be used to sustain more than 39,200 U.S. airline jobs. Moreover, these costs could double if the cost of carbon allowances in Europe returns to where it was within the past two years, in which case more than 78,500 U.S. airline jobs could have been supported.

Bill proponents claimed that “there is growing international opposition to the ETS. Other nations that have voiced opposition include Argentina, Brazil, Chile, China, Colombia, Cuba, Egypt, India, Japan, the Republic of Korea, Malaysia, Mexico, Nigeria, Paraguay, Qatar, the Russian Federation, Saudi Arabia, Singapore, South Africa, the United Arab Emirates, and the member States of the Latin American Civil Aviation Commission (LACAC).”

Even EU Member States, including Italy, the Netherlands, France, Belgium, and Spain, are calling for postponement of the EU ETS due to confusion over its implementation and opposition and potential retaliation from other nations.

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