House, Senate committees okay bills rejecting EU carbon tax payment

RELEVANT US House and Senate committees have approved bills rejecting the European Union's carbon tax on aviation with each bill forbidding American airline participation in the EU revenue scheme.

The Senate has joined 16 countries - including China, Brazil and Russia - in opposing the EU measure, but the two chambers failed to agree on a joint declaration during the UN's International Civil Aviation Organisation meeting, according to Reuters.

Although the Emissions Trading System (ETS) got underway on January 1, airlines using EU airports are not compelled to buy carbon credits until next January for CO2 emissions during entire international flights, not just over EU airspace.

"Congress must act to protect America's sovereignty and ensure that US operators and passengers are not penalised by this illegitimate tax," said South Dakota Republican Senator John Thune.

"More than US$3.1 billion will be wrapped up in new taxes between 2012 and 2020 that could otherwise be invested in creating jobs and stimulating economic growth in our country," Senator Thune said.

Lufthansa has called on the EU to postpone implementation until Europe is over its sovereign debt crisis. European air cargo volume in June was down 1.1 per cent year on year, while Asian traffic fell three per cent, according to the International Air Transport Association (IATA).