December 21, 2011
As expected, the European Court of Justice in Luxembourg tossed out a lawsuit filed by North American airlines that would have asked for a waiver on “cap-and-trade” carbon emissions taxes that will be imposed on all aircraft operating to and from Europe’s airports. Numerous other nations, including China and India, supported the suit.
The European Union claims it was forced to act because a U.N. agency, the International Civil Aviation Organization, has not imposed restrictions on carbon emissions. Aircraft account for an estimated three percent of global carbon emissions, and engine makers have accounted for an average one percent per year in improved fuel efficiency. Not enough for Europe, though. The EU is perhaps the most aggressive of any community of nations in taxing carbon emissions in an attempt to mitigate global warming. The problem is that the tax does not apply in European airspace alone, but is calculated on an aircraft’s total emission from its point of departure. That means a flight from JFK International to Paris gets a bill for every mile flown between those two points, and for the entire return flight. The lawsuit argued that by extending the reach of the tax beyond its own borders and into the airspace of other nations, the EU violates basic laws of national sovereignty and aviation treaties.
The new tax takes effect on January 1, 2012. Expect airfares to Europe to go up.