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European Union Emissions Trading Scheme 


European Union Emissions Trading Scheme/Emissions Taxes

The Issue: Although business travelers support reasonable measures to address aviation emissions, unfair tax schemes unilaterally put in place by the European Union (EU) and individual countries are not the answer. A global solution endorsed by countries around the world is the best approach.

 

European and nonEuropean airlines operating flights to and from Europe fall under the EU Emissions Trading Scheme (ETS). Under the scheme, airlines receive “allowances” tied to past carbon emissions. If emissions exceed the “allowances,” airlines must buy additional allowances on the carbon markets. The revenue feeds into the different EU country general tax revenues and is NOT required to be used for emissions reductions initiatives. These additional costs will increase ticket prices to Europe. An Airlines for America analysis indicates that emissions taxes will cost U.S. airlines more than $3 billion between 2012 and 2020 – a cost that likely will be passed on to passengers. Estimates vary significantly as to the amount per ticket, from several dollars to approximately $20. In January 2012, numerous airlines began imposing ticket surcharges.

  

Various legal challenges to the ETS have failed. The FAA Reauthorization bill contains language directing the federal government to use all political and legal means to oppose the illegal scheme. Bills have passed the House of Representatives and Senate that allow the Secretary of Transportation to prohibit U.S. airlines from complying; the President signed the bill into law in late November. This strategy is consistent with actions by the Chinese and Indian governments prohibiting their airlines from participating. Although in early November the EU agreed to delay compliance for nonEU airlines for a year, the threat of the tax remains as the EU left the door open to put the scheme in place in late 2014.  

 

GBTA Position: GBTA opposes the EU ETS and supports efforts to address international aviation emissions underway at the International Civil Aviation Organization/ICAO. Business travelers should not be forced to pay higher fares due to discriminatory, illegal taxes imposed by the European Union, United Kingdom via its Air Passenger Duty tax or any other individual nation. This deters business travel through increased, unjustifiable costs and harms the U.S. economy. The U.S. government should strongly oppose these unilateral, illegal tax schemes and support a global approach through ICAO.

 

Relevant Links:

 

GBTA Joins Travel Coalition in Opposition to EU Scheme