US calls on EU to abandon 'lousy' carbon tax on airlines

US Transportation Secretary Ray LaHood on Wednesday called on the European Union to abandon its controversial carbon tax on airlines, saying the policy aimed at combating global warming was "lousy."

"We think this is a lousy policy, a lousy law that they passed," LaHood told a Senate committee on commerce and transportation.

"We strongly urge the EU to cease application" of the law "in order to help accelerate our effort to forge a global solution," he said.

The carbon tax imposed on airlines by the European Union took effect on January 1, but carriers will begin receiving bills only in 2013 after this year's carbon emissions have been assessed.

More than two dozen countries including China, India, Russia and the United States have opposed the EU move, saying it violates international law.

But the EU has said the tax will help it achieve a goal of cutting carbon emissions by 20 percent by 2020 and has insisted it will not back down on the plan.

It says the cost for the airlines is manageable, calculating that the scheme could force the carriers to add between 4.0 euros ($5.50) and 24 euros to the price of a long-haul round-trip.

LaHood however lamented the EU's unilateral action, saying: "They should have done it in a more collaborative way."

"The US government takes a back seat to no one," he added as he appealed for a negotiated solution mediated by the International Civil Aviation Organization (ICAO).

The EU has "been the lone ranger in this," LaHood said.

Jos Delbeke, the European Commission's director general for climate action, said the EU was engaging with the Canada-based ICAO and "wants in particular to engage with all states that are willing to work together to find a global solution."

He disputed that the EU's emissions trading scheme was a tax or charge, calling it instead a "market-based approach."

"It is nondiscriminatory," he said, adding it could be modified.

While some 1,200 airlines have complied with the EU requirements, eight Chinese and two Indian airlines representing less than three percent of aviation emissions in the 27-nation bloc have refused.

Nancy Young, vice president of the trade organization Airlines for America, blasted the European policy.

"The imposition of this unilateral cap-tax-and-trade scheme on US citizens and US companies is a clear violation of our nation's sovereignty and the treaties governing international aviation and commerce," she said.

Young got strong backing from LaHood.

"We have made our opposition clear to the EU member states and institutions at every opportunity," he said.

Last year, US senators put forward a draft bill that would allow the US transportation secretary to bar US airlines from participating in the EU carbon emissions trading scheme.

On Wednesday, LaHood congratulated the senators who introduced the measure but stopped short of offering the government's backing.