Statement on EU "Cap and Tax" Scheme

Statement

Congressman Sensenbrenner issued this statement regarding H.R. 2594, European Union Emissions Trading Scheme Prohibition Act of 201. Sensenbrenner is a co-sponsor of H.R. 2594, and the House is expected to vote on this legislation later today.

"This trading scheme is effectively a unilaterally-imposed tax on all air carriers that fly into or out of the EU," Sensenbrenner said. "Congress has already rejected "cap and tax,' and it is unacceptable for the EU to violate US sovereignty and impose a tax that starts accruing even while the carrier is in American airspace."

"The bottom line is that Americans will be forced to pay higher fares to cover this illegal tax that will do almost nothing to lower emissions. While Congress has taken action to protect Americans from this tax, the Administration must also engage diplomatically to find a solution."

Background:

* On Jan. 1, 2012, the EU will extend this cap-and-tax to all airlines arriving or departing its airports.
* If a U.S. carrier is flying from San Francisco to London, the tax will take effect when the aircraft begins to taxi on the runway in California. The bill will continue to accrue throughout the entire flight, even though only a small portion actually occurs in the EU's airspace. The airlines estimate that the EU's new tax will cost them $3.1 billion by 2020 and they project a potential fare increase of more than $50 on a trans-Atlantic flight.
* The entire U.S. aviation industry is responsible for just 2 percent of our total emissions. In 2012, the EU will require a 3 percent reduction from the average emissions from 2004-06 on all flights into, out of or within the EU. Carriers that fail to meet this standard will have to buy emissions credits from and pay fines to the EU.
* H.R. 2594 is bipartisan legislation to prohibit American air carriers from participating in the EU Emissions Trading Scheme.

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