House Votes to Halt EU Air Tax

Washington, DC – (Watch the video here) The U.S. House today approved legislation to ensure the United States will not participate in a costly European Union (EU) scheme to tax American and other nations’ aircraft operators and air carriers, for their emissions when flying into and out of the EU.

The bill approved today by voice vote (S. 1956, the European Union Emissions Trading Scheme Prohibition Act of 2011) is the Senate version of a bipartisan bill that was introduced in the House by Transportation and Infrastructure Committee leaders, including Chairman John L. Mica (R-FL) and Aviation Subcommittee Chairman Tom Petri (R-WI).

Although the EU yesterday announced a one-year postponement in implementing the Emissions Trading Scheme (ETS) for international flights, the bill approved in the House today ensures that U.S. aircraft operators will not at any point participate in the proposed plan.  The bill now goes to the President for his signature.

“Fortunately EU leaders who have promoted imposing an unjust tax on international aviation have temporarily backed off the emissions tax proposal,” Mica said.  “The proposal must not be allowed to resurface in one year like a phoenix rising again from the ashes.  We must ensure U.S. operators, airlines and consumers are not stuck with a future unfair tax burden.

“This bill is a firm response by the United States Congress that this nation will not allow U.S. jobs and our aviation industry to be threatened by the EU’s unilaterally imposed and unlawful tax scheme,” Mica continued.  “Participation will put U.S. air carriers at a competitive disadvantage and lead to fewer aviation jobs for Americans.”

U.S. airlines have estimated that this European tax could cost more than $3.1 billion between 2012 and 2020, which will ultimately increase the cost to passengers.

“An emissions tax on other nations’ civil aviation operators while those flight are in EU airspace is one thing,” Mica said.   “However, imposing this tax over the entire flight, the bulk of which may be in another nation’s airspace or over international waters, clearly violates international law and U.S. sovereignty.  This scheme has the appearance of nothing more than a cash grab by a struggling European Union, as there is absolutely no requirement that funds collected by EU Member States be used to reduce aviation emissions.”

“The bottom line here is obvious,” said Rep. Petri.  “The European Union seems not to have noticed that it is not sovereign in the United States and has no right to levy taxes here.  The European Union also seems not to have noticed that it is not sovereign over the rest of the world, since the EU also intends to impose these taxes on the citizens and businesses of non-European countries worldwide.  The non-Europeans have noticed, however, and have joined with us in protest.  The delay announced by the EU yesterday is a temporary reprieve, but the message and intent behind this legislation remains unchanged.”

In 2011, Chairman Mica led a Congressional delegation to the European Union to convey opposition to the EU’s plan.  Mica also led a subsequent 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 ETS.  ICAO is the primary organization responsible for setting international aviation standards.

The EU’s tax scheme, unilaterally imposed on January 1, 2012, applies to U.S. and other nations’ flights into or out of an EU airport, regardless of how long that flight is in EU airspace. If the plan is carried out in its current proposed form, beginning in April 2014, U.S. airlines will be required to pay an emissions tax to the EU Member State to which they most frequently fly.  Although collected in the name of reducing emissions, the current plan lacks transparency and there is no clear requirement that the fees collected by EU countries be used for this purpose.

In addition to directing the Secretary to prohibit U.S. aircraft operators from participating in the ETS, the legislation directs the FAA, the DOT, and other appropriate officials to enter into international negotiations, including agreements to pursue a worldwide approach to address aircraft emissions, and to take appropriate measures under existing authorities to ensure U.S. air carriers are held harmless from any ETS unilaterally imposed by the EU.  The measure also prohibits the use of FAA, DOT, Trust Fund or any other appropriated funds from being used to pay any tax or penalty imposed on U.S. operator pursuant to the ETS.

Mica and other Members of Congress have attempted to work with their European counterparts, including meetings with EU officials in Washington in March 2011, meetings in Brussels in June/July 2011, and ICAO meetings in Montreal in October 2011.

In September 2011, 21 countries, including the United States, signed a joint declaration expressing opposition to the EU ETS.  In November 2011, the global community came together in opposition to the EU’s plans when the ICAO Council approved a statement of opposition to the scheme.

The Administration has also opposed the ETS, but diplomatic efforts to block it have not led to the withdrawal of the tax. 

Mica and Petri stated that a positive outcome can still be achieved by continuing to work through ICAO and the international community.