House T&I Committee endorses EU decision to halt aviation emissions tax

The House Transportation and Infrastructure (T&I) breathed a collective sigh of relief last week, following the European Union’s (EU) reported agreement to reverse its plan to impose a carbon tax on non-EU carriers operating long haul flights in and out of Europe.

By ·

The House Transportation and Infrastructure (T&I) breathed a collective sigh of relief last week, following the European Union’s (EU) reported agreement to reverse its plan to impose a carbon tax on non-EU carriers operating long haul flights in and out of Europe.

The EU’s plan is known as its emissions trading scheme and is designed to impose new emissions taxes on the United States and other nations’ air carriers flying into and out of the EU.

In February 2012 the Wall Street Journal reported that a group of 29 nations, including the U.S., Russia, China, and India, called on the EU to reject the ETS, explaining that they had agreed to adopt a “basket of measures” that permit each nation to choose the actions it finds most effective to counter the ETS.

The EU ETS was created in 2005. According to the EU, the ETS places a cap—or limit—on the total amount of certain greenhouse gases that can be emitted by the factories, power plants and other installations in the system. Within this cap, companies receive emission allowances, which they can sell to or buy from one another as needed.

This was originally scheduled to take effect for the airline industry on January 1, 2012. The EU maintains that under the ETS at the end of each year a company must either surrender the allowances needed to cover their actual emissions or pay steep fines. And the WSJ report also noted that the ETS has met strong resistance and raised fears of a trade war, with opponents saying it is exceeding its legal authority by imposing emissions charges for flights outside the EU.

“Aviation is a global industry and we are pleased the EU now appears to be focused on working with the international community rather than unilaterally imposing an emissions tax on other nations’ air carriers,” said Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA), Full Committee Ranking Member Nick J. Rahall, II (D-WV), Aviation Subcommittee Chairman Frank LoBiondo (R-NJ), and Aviation Subcommittee Ranking Member Rick Larsen (D-WA), in a statement.

United States-based opposition to the ETS has been clear for some time.

In November, the House T&I’s Committee’s Aviation Subcommittee penned a letter to Department of Transportation Secretary Anthony Foxx, calling on Foxx to protect U.S. aircraft operators from unfairly being subjected to the ETS while a global plan to reduce emissions is being developed.

That agreement was outlined in the letter to Foxx, which the subcommittee said was achieved at the International Civil Aviation Organization (ICAO) in October 2013. This plan is based on the ICAO General Assembly agreeing to develop a global-based mechanism between now and 2016 to reduce aviation emissions, which if agreed to, would take effect in 2020.

The lawmakers added in the letter they maintain the EU’s amendment to the ETS “violates the spirit of the ICAO agreement, as it would unilaterally be applied to portions of U.S. flights to and from the EU.”

Brandon Fried, executive director of the Washington, D.C.-based Airforwarders Association, told LM that the recent change of heart from the EU regarding its plans to not include a carbon tax for flights in and out of Europe is welcomed news.

“The Airforwarders Association views the European Union’s decision to reverse its plans to impose a carbon tax on non-EU carriers operating long haul flights in and out of Europe as a positive development not only for passengers but cargo shippers as well,” said Fried. “The rescinded scheme would have increased costs for our airline partners ultimately raising rates for customers without any significant impact on reversing the climate change problem. A more preferable solution should include all nations together in arriving at a single policy to address this significant issue.”


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Six Ways Cloud ERP Supports Rapid Innovation
Kenandy is a new approach to ERP that lets you and your team focus on driving innovation, creating new product lines, and expanding your customer base even as you improve your business operations.
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Best Practices: How to Efficiently Leverage APIs to Increase Your Net Income
Both legacy and modern technology leaders agree that leveraging API connectivity is critical in keeping up with the pace of a world that demands not only speed and agility, but also a deep level of visibility. During this session a panel of technology and industry experts discuss impact APIs can have on annual net income and market capitalization.
Register Today!
EDITORS' PICKS
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...

Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...