MEPs demand end to aviation tax breaks, but fudge investor protection in trade deal

MEPs have called for EU-US cooperation to end commercial aviation fuel tax exemptions,  in line with the G-20 commitments to phase out fossil fuel subsidies.  MEPs want clear guarantees that TTIP won’t undermine EU environmental standards and climate goals.  The clear statement by the MEPS was in sharp contrast to the European Parliament’s ambiguity on Investor-State Dispute Settlement (ISDS), where it called for an ‘alternative system’ but with the same purpose as ISDS – leaving EU negotiators none the wiser on a final agreement that would be acceptable to MEPs.  While in the EU consumers, small businesses and hauliers pay an average of €0.48  in tax per litre for fuel, commercial airlines in the EU don’t pay any tax on jet fuel. This subsidy is fuelling air traffic growth, with aviation’s greenhouse gas emissions expected to increase 300% by 2050. The continuation of the  €20 billion outdated fuel tax exemptions for aviation is an anachronism. The annual fossil fuel subsidy is being given for the most carbon-intensive form of transport. “With air passenger numbers set to grow 4% a year for the next 20 years, the aviation sector can well afford to pay its way.” The 10th negotiation round of TTIP negotiations will take place next week. 

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MEPs demand end to aviation tax breaks, but fudge investor protection in trade deal

8.7.2015 (T&E – Transport and Environment)

MEPs today called for EU-US cooperation to end aviation fuel tax exemptions as part of the Transatlantic Trade and Investment Partnership (TTIP). The clear statement was in sharp contrast to the Parliament’s ambiguity on Investor-State Dispute Settlement (ISDS), where it called for an ‘alternative system’ but with the same purpose as ISDS – leaving EU negotiators none the wiser on a final agreement that would be acceptable to MEPs.
Transport & Environment, which is a member of the European Commission’s TTIP advisory group, welcomed MEPs’ call for clear guarantees that TTIP won’t undermine EU environmental standards and climate goals and, crucially, for cooperation to end fuel tax exemptions for commercial aviation in line with the G-20 commitments to phase out fossil fuel subsidies.
Consumers, small businesses and hauliers pay an average of 48 cent in tax per litre [1] while commercial airlines in the EU don’t pay a cent in tax to fuel their planes. This subsidising is fuelling air traffic growth, with aviation’s greenhouse gas emissions expected to increase 300% by 2050. [2]
Cécile Toubeau, senior policy officer at T&E, said: “It is great that Parliament wants TTIP to end the outdated fuel tax exemptions for aviation – a €20 billion fossil fuel subsidy for the most carbon-intensive form of transport. With air passenger numbers set to grow 4% a year for the next 20 years, the aviation sector can well afford to pay its way.”
But MEPs from the European People’s Party and Socialist groups also voted through a compromise to replace ISDS with a ‘new system for resolving disputes between investors and states’, which is itself the purpose of ISDS. Critics said the ambiguity would keep both groups happy while offering the European Commission zero guidance on what form of investor protection could be passed by Parliament in a final deal.
ISDS clauses allow businesses to bypass national court systems and sue governments directly, in special private arbitration panels, over measures that can jeopardise future profits – typically laws designed to protect the public. ISDS cases have trebled in the last decade.
Cécile Toubeau concluded: “Centre-left MEPs claim this is a No to the inclusion of investor protection in TTIP, yet the centre-right insists this vote supports the Commission’s reformed investor-protection proposal. That ambiguity means the European Commission can feel in no way certain its version of investor protection will be acceptable to the Parliament.”
The 10th negotiation round of TTIP negotiations will take place next week. The Commission intends to publish its new text on investor protection after the summer, but before publication it will consult with EU governments, the Parliament, and the members of its advisory group.
ENDS
Notes to editor:
[2]   ICAO, Global Aviation CO2 Emissions Projections to 2050 (2012), slide 8. Based on ICAO’s most optimistic projection. http://www.icao.int/environmental-protection/GIACC/Giacc-4/CENV_GIACC4_IP1_IP2%20IP3.pdf
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Also from T&E:  (23..6.2015)
“International aviation emissions have grown 90 per cent since 1990, and are expected to grow by up to 270 per cent by 2050. CO2 and greenhouse gases (GHGs) from aviation account for some five per cent of the overall climate problem – its CO2 emissions alone are on a par with Germany’s.
“These figures are hardly surprising; international aviation fuel is tax exempt, air tickets are hardly taxed, there are no emission reduction targets for the sector under current international climate agreements, and no fuel efficiency standards for aircraft. Also unsurprising is the fact that developed countries are the main source of emissions. US domestic and international emissions make up 29 per cent of all aviation emissions. Together, the EU and North American markets account for half of total global aviation emissions. Action from these two markets to lead in reducing emissions is essential.”
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and it continues …………