EU Temporarily Halts Airline Emission Tax

January 26th, 2013 BY VeganVerve | No Comments

Worldwide aviation has drastically increased within the last few decades as air travel has become more easily accessed. However, international aviation emissions were not included in the Kyoto Protocol which was recently extended another five years. This is now being considered an issue as the contribution to worldwide emissions by aviation continues to rise.

Due to these growing concerns, the European Union approved a law in 2008 that will charge foreign airlines for emissions. The law, which became enacted on January 1st, 2012, charges foreign airlines for landing and taking off in European Union territory. This is in response to the EU’s push to significantly reduce their overall greenhouse emissions.

Initially airlines will only be required to pay for fifteen percent of their carbon emissions. The EU will be making allowances for the remaining eighty-five percent, but it is likely that entire emissions will be charged by the end of the decade. In addition, if an airline landing in the EU comes from a nation with carbon offsets in place, that airline will be exempt from the charges.

It is estimated that the cost to the airline industry will be nearly $3 billion yearly. Concerns are being raised that the cost of such permits from the European Union will cause overall airline travel prices to rise. China alone estimates that it could see fees of upwards of $124 million per year due to the new law, with fees increasing to three times this amount in the year 2020. The first official bills from the EU are expected to be distributed in April 2013.

Since the announcement, many nations have spoke out against the law. The United States is leading the opposition, followed by numerous nations including China and India. One of the biggest complaints regarding the EU’s ruling is that the Kyoto Protocol agreement places aviation emission rulings under the U.N.‘s International Civil Aviation Organization. However, the EU has indicated that talks within this organization have led to no action in more than ten years. The European Court of Justice, the highest court in the EU, ruled that the law does not violate the Kyoto Protocol or national sovereignty.

Now many are concerned that the new law will interfere with trade between nations, especially those against the law. China, the United States, India and Russia are leading the charge against the law with at least a total of twenty-six nations concerned. Retaliatory actions against the EU’s airline law are likely to be targeted at trade.

The EU has indicated that they are willing to work with other nations in forming a cohesive airline tax solution, however, many of the opposition are seeking elimination rather than compromise. Due to mounting pressures, the EU recently announced that they would put a temporary hold on the airline emissions tax law. However, the law would still be in place for flights within the European Union.

The EU indicated that they will put a temporary hold on the law but if progress is not making in attaining an alternative law they will go back to their original tax plan. The EU Commission has indicated that they will change their law if the UN International Civil Aviation Organization establishes a worthy alternative. It is unknown at this time whether or not progress is being made in establishing an alternative method to reducing airline emission issues within the EU as the opposition side seems unwilling to compromise at this time.

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