CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Global Approach Urged On Taxing Aviation Emissions

Global Approach Urged On Taxing Aviation Emissions

by Ulrika Lomas, Tax-News.com, Brussels

18 June 2012


Speaking at the International Air Transport Association's (IATA) recent 68th Annual General Meeting and World Air Transport Summit hosted by China, the head of the Association called for nations to back a rational, global approach to achieving aviation-sector carbon-reduction goals, through recommendations under development by the International Civil Aviation Organization (ICAO).

"To meet our ambitious targets we will need a globally-agreed approach covering the areas of technology, operations, and infrastructure as well as positive market-based measures. Everyone — including Europe — agrees that the solution must be a global agreement through the ICAO at the 2013 Assembly. But Europe’s unilateral and extra-territorial inclusion of international aviation in its emissions trading scheme from 2012 is creating discord when we need harmony,” said Tony Tyler, IATA’s Director General and CEO.

The global air transport industry has committed to three sequential goals to manage its 2% share of global man-made carbon emissions: to improve fuel efficiency 1.5% annually to 2020; to cap net emissions from 2020 with carbon-neutral growth; and, to cut net emissions in half by 2050 compared with 2005 levels.

To achieve these ambitious goals the industry is pursuing a four-pillar strategy based on more technology investments, efficient infrastructure, better operations, and globally-agreed market measures, ideally through the development of a single, global mechanism to offset some emissions.

“The extra-territorial EU Emissions Trading Scheme (EU ETS) is not a stepping stone on the way. It’s a polarizing obstacle that is preventing real progress. Our host country, China, is at the forefront of the opposition to the European ETS. Its carriers are forbidden from participating,” noted Tyler.

In support of China's concerns, Tyler stated: “Sustainability should unite the world with common purpose, not divide it with affronts to sovereignty that risk a trade war, a war that nobody wants and from which no winner can emerge. Certainly no airline — European or otherwise — should be a target for retaliation because European governments are acting extra-territorially.”

Europe's carbon tax, under the EU ETS was extended to aviation activities from or to European soil on January 1, 2012, to provide a solution to taxing aviation emissions, which were excluded from the Kyoto Protocol. Under the ETS, airlines operating into and out of the EU, regardless of how long a flight is in EU airspace, will be required to surrender varying emission allowances, and will be required to purchase any additional permits outside of their free allowance.

Since its introduction, the EU ETS has been a fractious issue between Europe and foreign nations, and heightened concerns that the measures may trigger retaliatory measures to the detriment of the sector. In defence of the design of the scheme, the European Commission has noted that the Directive provides that airlines would be exempt from carbon charges if their nation were to place equivalent levies on their domestic industry. Further it has said that it would revoke the measures in favour of a global solution from the ICAO.

Tyler continued: “There is common ground. Such an agreement, however, is impossible under current conditions. Europe seems more committed to implementing its ETS unilaterally than to sincerely negotiating a multilateral agreement. For Europe’s international counterparts it’s like being asked to negotiate with a gun to their head. Nobody can deny Europe the credit for moving sustainability up the global agenda. States are focused on the issue as never before. The onus is now on Europe to seize the moment, take a credible action to defuse the situation, and get on with finding the global solution that everybody is hoping for,” said Tyler.

ICAO is currently working on four options for a single, global market-based measure for international aviation. These proposals include: a global mandatory offsetting scheme; a global mandatory offsetting scheme with additional revenue-raising; a global emissions trading scheme; and, a global “Baseline & Credit” scheme based on efficiency.

These options are being developed for review by the Council of ICAO with a view to agreeing to one of the options at the next ICAO Assembly of member states in the autumn of 2013.

Concluding, Tyler said: “We are very encouraged by the recent progress at ICAO. For the first time there will be concrete proposals on the table for states to consider. It is vital that agreement is reached at the next ICAO Assembly so that industry and government can proceed together to tackle the challenges of climate change and achieve the ambitious goals that we have set.”

TAGS: environment | tax | European Commission | aviation | China | carbon tax | trade | European Union (EU) | Europe

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »