U.S.-based Airlines to be Taxed by E.U. Carbon Scheme
August 17, 2009 - Beginning in 2012, many U.S. airlines must comply with European cap and trade regulation, as new E.U. policies require all international flights landing in the region to participate in the regional carbon scheme.
The European Union will release a complete list of airlines affected later this month, and a preliminary list includes over 700 registered in the U.S. including Delta, United and American Airlines. Many governments, airlines, and industry groups see the move as a violation of national sovereignty and a bad move for business.
While the airline industry has been left out of many national carbon reduction goals in the past (as a direct result of the industry's omission from the Kyoto protocol) many regions are now looking to the sector for carbon reduction savings. One major fear for U.S. carriers is that a regional approach will result in double carbon taxation, as the current climate bill that passed in the House already includes taxation on jet fuel. The bloc has vowed to honor other regional pacts and to eliminate double taxation in a timely manner.
Unlike Utilities, who can invest in renewable energies and technologies to immediately offset their carbon liability, airlines face fewer options. The most feasible are to improve fuel efficiency or purchase additional carbon permits from the E.U. The European model does not have a hard cap, meaning that airlines can purchase as many permits as they like, if they can afford it.
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