EU’s Proposed Carbon Levy On Some Long-Haul Flights Draws Swift U.S. Reaction

The United States has expressed deep concern over a European Commission proposal to impose carbon costs on emissions from certain international flights departing Europe. The proposal would cover flights landing in countries located within 5,000 kilometres of a specified point in central Europe. The threshold was designed to exclude direct transatlantic flights, partly to avoid confrontation with the Trump administration, but Washington warned that it could take appropriate action to protect American consumers and businesses. The dispute echoes an earlier confrontation in 2012, when U.S. opposition forced the EU to retreat from extending its emissions trading system to international aviation. The proposal also raises concerns over its interaction with CORSIA. Fifteen airline CEOs have warned that expanding the EU ETS could undermine CORSIA’s legitimacy, while MSCI estimates that airlines could face up to US$127 billion in cumulative CORSIA compliance costs by 2035.
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