EU Environmental regulation

Jun 15, 2012 | Energy and Carbon, Environment | 0 comments

If we are to build a sustainable future, carbon should be taxed (and of course other taxes reduced accordingly). As with anything, there are sensible pragmatic ways to do this, but there are also ways to do this that are completely bonkers.

As part of the carbon tax strategy the EU plans to charge airlines a fee for their carbon emissions for flights with an EU origin or destination. This would seem a straight forward and sensible thing to do, all you have to do is seek carbon emissions data on the aircraft and the length of the journey over EU airspace and then invoice the airline for the tax. That is practical and sensible. The bonkers part of the plan is that the EU is insisting that the carbon emissions be taxed for the whole of the flight, not just the EU portion of it.

This plan is rightly going to cause much upset, not least because penalties for non payment of the tax will include impounding of aircraft. Take a flight from Denver to Dublin. The portion of the flight in EU airspace is possibly 10% of the total flight, yet the EU wants to tax the carbon emission on 100% of the whole flight from Denver to Dublin. This means that the EU is taxing an activity that based in the US, i.e. the Denver to the edge of US airspace portion. This raises sovereignty issues and interference with national airspace. China is adamant that it won’t provide the data and the EU is now in a standoff situation.

As a consultancy representing industry in Ireland, we are obviously supportive of environmental legislation that address real concerns and is fair. Given that most Irish environmental law is derived from EU law, the worry is that if the EU can get it so wrong with carbon taxing of airlines, can we have any confidence that it really understands the real world. The last thing that Irish industry needs is EU law makers dreaming up ill conceived and unfair burdens on industry.