U.S. Airlines See Cash-Grab in European Union Tax Plan

Airlines for America (A4A),  formerly known as the Air Transport Association (ATA), commended Senator John Thune (R-S.D.) for introducing a bill that would prohibit U.S. aircraft operators from participating in the European Union Emissions Trading Scheme (EU ETS). The A4A believes the scheme violates international law and U.S. sovereignty and  calls it a cash grab by the European Union.

The legislation would also seek to hold airlines harmless from the scheme. 

The Senate bill is similar to the bipartisan legislation passed by the full House of Representatives on Oct. 25, 2011, A4A said in a statement.

“We commend Senator Thune for his leadership in joining the Administration and his colleagues in the House of Representatives in opposing the application of the EU ETS to U.S. airlines, as it is both illegal and bad policy. Subjecting airlines to the EU’s unilateral system will be counterproductive to helping the environment, result in the loss of U.S. jobs, and hamper airlines’ ability to invest in new aircraft and continue their extensive efforts to reduce their environmental impact,” said A4A President and CEO Nicholas E. Calio. 

The Senate bill comes less than a week after President Obama told EU officials that that he opposes the EU scheme, A4A said. The congressional action also follows the International Civil Aviation Organization (ICAO) Council adoption last month of a declaration opposing the unilateral application of the EU ETS.

ICAO said the EU ETS would harm international aviation and urged continued collaborative action on a  global sectoral approach. “There is no question that this country and the rest of the world are united against the EU’s unilateral and counterproductive scheme,” Calio said.

A4A is part of an industrywide aviation coalition that has committed to continuing the industry’s strong record of greenhouse gas (GHG) emissions savings and has proposed the adoption of a global sectoral approach by the International Civil Aviation Organization (ICAO), the United Nations body charged with setting standards for international aviation.

A4A noted in October 2010, ICAO adopted a resolution with targets and principles broadly consistent with the industry’s approach, demonstrating that the industry and governments are coalescing around a common platform for addressing aviation GHG emissions at the global level.

 A4A, which brought a legal action against the EU’s unilateral action in 2009 on behalf of all of its airline members, promotes adoption of the global sectoral approach.

The European Court of Justice is expected to issue a decision on the case before the end of the year, A4A says, although many countries have vowed to continue to oppose the EU’s unilateral scheme regardless of the outcome in the private cause of action.

A coalition of 15 industry groups also issued a letter to senators urging support of the legislation.

"In reality, the EU ETS will increase costs in the industry significantly, which will reduce consumer demand, and will hamper airlines’ and other operators’ ability to invest in research and development and in new aircraft and equipment," the letter said.
"The EU ETS is estimated to cost U.S. airlines $3.1 billion between 2012 and year-end 2020. All aircraft operators and airlines operating to and from the EU will be required to purchase allowances for their emissions over the entirety of each flight to, from and within Europe regardless of their citizenship," The A4A said."

"The EU has no authority to require EU States to reinvest any revenues from the ETS into aviation research and development or for other environmental purposes, meaning U.S. operators likely will directly subsidize the coffers of foreign governments," A4A said."Several EU states have imposed so-called “environmental” taxes on aviation, all of which have merely been cash-grabs by foreign governments from U.S. carriers and their passengers, and have not been invested in environmental programs."

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