Senate Nixes U.S. Airlines' EU ETS Participation

washington dcAirlines for America (A4A) commended the Senate for passage of S. 1956, which would allow the Transportation Secretary to direct U.S. airlines to not participate in the European Union Emissions Trading Scheme (EU ETS) because it violates international law and U.S. sovereignty. The EU ETS tax  has faced stiff opposition from the airline industry and international governments.

"Congress has spoken - U.S. airlines should not be subjected to this illegal scheme that amounts to little more than a cash grab for the European Union as none of the funds collected are required to be used for environmental purposes," said A4A President and CEO Nicholas E. Calio, noting that the House previously passed a similar bill.

"We commend Senators John Thune (R-S.D.) and Claire McCaskill (D-Mo.) for their leadership in passage of this crucial legislation that recognizes this scheme is a breach of U.S. sovereignty that actually limits our ability to build on our strong environmental record by investing in new and more fuel-efficient aircraft," Calio said.

Between 1978 and 2011, U.S. airlines improved fuel efficiency by 120 percent, resulting in emissions savings equivalent to taking 22 million cars off the road each of those years. In 2011, U.S. airlines carried 16 percent more traffic than in 2000 while using 2.3 billion fewer gallons of fuel.

Calio said A4A supports a global sectoral approach to aviation climate change policy under the International Civil Aviation Organization, as do all other non-EU countries impacted by the scheme.

The legislation now moves to the U.S. House of Representatives.

"It's refreshing to see strong, bipartisan support for the commonsense notion that Americans shouldn't be forced to pay a European tax when flying in U.S. airspace," said McCaskill. "I appreciate Sen. Thune's work to get this done, and now the U.S. House needs to act in order to protect American jobs and consumers from this new tax."

Since January, airline carriers landing in or departing from E.U. countries, including flights between the U.S. and E.U. countries, have been subject to the E.U. Emissions Trading System (E.U. ETS), an emissions trading program that levies a tax on U.S. airline carriers related to European countries' interest in reaching their own internal goals for carbon emissions. The Senate Commerce Committee unanimously approved McCaskill and Thune's bipartisan plan in July.

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, McCaskill commented.


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