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Wednesday, September 07, 2011

European Union To Force Emissions Trading Scheme on Airlines

The global airline industry may be forced to join the EU's Emissions Trading Scheme (ETS) next year, a carbon trading system that already includes most other polluting industries. Starting next January, passengers will likely have to pay an average of $8 more for European routes due to taxes imposed to curb greenhouse gas emissions.  Global airlines made $18 billion in net profit last year and that translates into a profit of approximately US$7 per passenger.

Airlines account for two percent of global carbon emissions. Carriers ferrying a total of 2.5 billion passengers emitted 650 million tons of carbon dioxide globally last year.

The highly competitive airline industry is in an uproar over the proposed tax policy with some media predicting a "global trade war" in the future. The industry has consistently resisted participating in the ETS in the past and continues to do so.  They feel that the EU is asserting the right to assess these fees in the absence of a global agreement, or any reciprocal measures by other governments. The airline industry complains that it will be charging for the entire length of a flight, not just the portion in European airspace; and the earnings from the carbon dioxide charge will go directly into the coffers of EU governments, with no requirement that the money be spent to combat global warming, on research and development, new aviation technology or any other tool to protect the environment. The non-EU governments most opposed to the plan are the United States, China, India and Russia.

Carriers in the United States have taken the EU to the European Court of Justice for including airlines in the emissions trading scheme. The results of the case will be known on October 6 and will set a precedent for all other airlines. (CNN, 9/6/2011)

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