Senate votes to shield US airlines from EU carbon tax, Obama to mull bill

THE US Senate has unanimously voted to shield US airlines from paying for carbon emissions on entire flights to and from Europe, telling the European Union to stop taxing foreign carriers, reports Reuters.

The House of Representatives has passed a similar measure and White House spokesman Clark Stevens said the administration is reviewing the Senate bill. The State Department had no comment.

The European Commission has been enforcing its tax since January to make all airlines take part in its Emissions Trading Scheme to combat alleged global warming. Most airlines have complied.

The Senate bill gives the US transportation secretary authority to stop US airlines from complying with the EU law.

China has already forbidden its carriers from participating in the scheme that taxes carbon emissions not only over EU airspace, but non-EU airspace as well as over the high seas. Indian carriers missed an interim deadline to submit information required to calculate the tax.

The Senate approved the bill as it ended business to recess ahead of the November 6 congressional and presidential elections.

South Dakota Republican Senator John Thune, bill sponsor, said it sent a "strong message" to the EU that it cannot impose taxes on the United States.

"The Senate's action today will help ensure that US air carriers and passengers will not be paying down European debt through this illegal tax," Senator Thune said.

Said co-sponsor Missouri Democratic Senator Claire McCaskill: "It's refreshing to see strong, bipartisan support for the commonsense notion that Americans shouldn't be forced to pay a European tax when flying in US airspace."

So far, nearly all airlines have complied.

China earlier this year threatened retaliation - including impounding European aircraft - if the EU punishes Chinese airlines for not complying with its emissions trading scheme.

The dispute between China and the EU froze long-haul Airbus purchases deals worth up to US$14 billion, though short-haul aircraft are still being purchased.

EU climate change commissioner Connie Hedegaard is sceptical that Washington would back a global UN carbon reduction measure, one of the bill's stated aims.

"It's not enough to say you want it, you have to work hard to get it done," she told Reuters. "That means that the US needs to change its approach in ICAO and show willingness to actually seal a meaningful global deal that will facilitate action."