As part of the EU’s flagship emissions trading scheme (ETS), Germany has recently announced planned changes to its taxes. The plans would include a tax increase for international and domestic airline tickets, which would be used to invest in railways and reduce VAT on train tickets.
However, this announcement has been met with opposition, both from European airlines, and from carriers in the US. One group – Airlines for America (A4A), which represents American, Delta, and United – wrote to the Commission to express concerns about the proposed changes.
A4A says that the plan is illegal. They also say that it violates the EU-US aviation agreement, as well as undermining the UN agreement for offsetting international aviation emissions: the carbon offsetting and reduction scheme for international aviation (CORSIA).
A4A president Nicholas Calio wrote in his letter to Henrik Hololei, the head of the European Commission’s transport directorate: “The cross-subsidisation of the railways at the expense of the airlines violates the US-EU Air Transport Agreement. The burden on international aviation in this way is unnecessary and counterproductive for reducing emissions.”
In addition, airlines in Germany are opposed to the changes, with a spokesperson for BDL saying: “We do not believe this additional tax revenue will contribute to the nation’s or the industry’s climate goals. It will reduce German airlines’ financial resources to invest in new technologies and fleet.”
The ETS, which is the EU’s flagship climate policy tool, has been criticised by several EU countries. This is mostly because UN members signed up to CORSIA have doubts over its compatibility with its compatibility with this scheme, an opinion that’s been echoed by A4A.
But the Commission spokesperson noted: “The EU confirmed its commitment to implement CORSIA [at Montreal] but also preserved its policy space to pursue a higher climate ambition in the EU. Not a single state explicitly challenged the ETS or the European right to go beyond the international system CORSIA in the EU.”
The Final version of the plan is, however, still not approved by lawmakers. The tax proposals are still in draft form and, if supported, would become effective from April 2020.
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