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Europe Daily Bulletin No. 9226
Contents Publication in full By article 14 / 30
GENERAL NEWS / (eu) eu/climate/ep/transport

Parliament calls for creation of emissions trading scheme among airline companies, tax on fuel and VAT on plane tickets

Strasbourg, 05/07/2006 (Agence Europe) - Anxious that the aviation sector play its part in global efforts to combat climate change, on 4 July, the Parliament voted for a raft of measures for the sector, hitherto spared by the Kyoto Protocol. MEPs voted by 439 votes to 74, with 102 abstentions, to adopt the proposals of rapporteur Caroline Lucas (Green, UK) to reduce the impact of aviation on climate change. Apart from the eventual inclusion of the aviation in the EU greenhouse gas emissions trading scheme envisaged by the European Commission in its September 2005 communication (see EUROPE 9035), Parliament proposes the creation of a separate aviation emissions market during the period 2008-2012, to be used as a pilot stage for post-2012. With international flights not being covered by the Kyoto Protocol, operators will not be able to take part in the world market before 2012. The separate aviation emissions trading scheme would serve as a trial run for the sector's inclusion in the world market. Through this scheme, airline companies which exceeded their annual emissions quota would be required to buy carbon dioxide emission permits from other less polluting airlines companies, or reduce their emissions. This would strongly encourage action from a sector whose emissions level at the moment is somewhat modest (3% of the EU's total greenhouse gas emissions), but growing exponentially (emissions from international flights rose by 73% between 1990 and 2003), potentially undermining greenhouse gas reduction efforts introduced by other sectors of the economy. “MEPs have been intensively lobbied by the airlines in recent weeks - with most calling for air travel to be included in the EU's existing Emissions Trading Scheme: a measure which will do little to deter airlines' future emissions growth,” stressed Ms Lucas.

Parliament wants the scheme to cover all flights from and to the EU, thereby avoiding any distortion of the market which might benefit destinations outside the EU.

Over and above the sale and purchase of polluting rights on the emissions market, MEPs are calling for an end to air transport's exemption from VAT, and the introduction of a tax on aviation fuel - options which the Commission rejected, judging them to be less effective than a market instrument.

An amendment was passed calling for particular attention to be paid in Community legislation to the most remote communities which depend heavily on air transport, and where alternatives are limited, if not non-existent. This was welcomed by Margie Sudre (EPP-ED, France) who put particular emphasis on the “disastrous effects on the economies of the most remote regions and on the mobility of their populations” of such fiscal measures.

The airline companies' reaction to the vote was one of consternation. They say that the Parliament had missed the opportunity to promote a realistic strategy … and instead calling offhandedly for the introduction of all the most restrictive and punitive measures possible. “Any approach to aviation and the environment which calls for the simultaneous introduction of taxes on aviation fuel, VAT on airline tickets, environmental taxes at airports and emissions trading scheme totally ignores economic realities,” complained Sylviane Lust, IACA (International Air Carrier Association) Director General.

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