Airlines decry E.U. court’s upholding of carbon tax scheme

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  1. garyst16
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    garyst16 Silver Member

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    By Jim Glab (

    I can only imagine what this will do to the already exhorbitant taxes and fees that are placed on flights into Europe...

    U.S. and international airlines are irate following a ruling by the European Court of Justice that the E.U.’s cap-and-trade program to limit carbon emissions can be applied to airlines, both European and foreign.

    Due to take effect January 1, the program will allot a certain amount of carbon permits to airlines based on their historical averages for carbon emissions on routes to, from and within Europe. Airlines that exceed those amounts will have to acquire additional carbon permits from airlines that have not met their quotas. The European governments see the tax as a way to force airlines to develop more efficient technologies that reduce greenhouse gas emissions.

    Both European and foreign airlines and foreign governments ranging from the U.S. to China, India and Russia have attacked the E.U. law as a violation of global aviation agreements and national sovereignty. U.S. and Canadian airlines and a global airline group had filed suit to challenge the extension of the cap-and-trade program to airlines, but the European high court last week rejected their arguments. Some observers have speculated that European enforcement of the rules could lead to retaliatory measures by other countries, leading to a global trade war.

    The U.S. airline trade group Airlines for America (A4A) – formerly the Air Transport Association – said after the ruling that the court decision “further isolates the E.U. from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change.”

    A4A said its member airlines “will comply under protest” when the law is extended to airlines next month, but it added that the latest ruling “does not mark the end of this case.” The trade group said it is reviewing legal options to pursue in the English High Court, and that “the U.S. government and dozens of others around the world are increasing pressure on the E.U. to come back to the table to consider a global sectoral approach.”

    The International Air Transport Association, representing the world’s airlines, called the decision “a disappointment but not a surprise,” and said it “does not bring us any closer to a much-needed global approach” to the emissions problem.

    IATA noted that the government of India has instructed its airlines not to comply with the European program, and observed that “similar legislation is moving through the U.S. Congress.”

    Shortly before the court decision was handed down, the U.S. Transportation Department told U.S. and European carriers to submit data on how they would be affected by Europe’s carbon tax, and some speculated that the U.S. might be working on some kind of retaliatory scheme. A4A said in a statement that the information being sought “is intended to assist in countering the illegal application of the E.U. Emission Trading Scheme to U.S. airlines.” The U.S. Secretaries of State and Transportation also wrote to the E.U., asking it to suspend enforcement of the scheme pending negotiations with other governments. According to wire service reports, the E.U. has estimated that the carbon tax, if it is passed along to passengers, could add as much as $15 to the cost of a one-way transatlantic flight. However, a consultant quoted by Reuters suggested that the carbon tax could add as much as $70 to $90 to the cost of a transatlantic flight. A4A said the scheme will cost U.S. carriers more than $3 billion from 2012 through 2020.
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