Tax
13. Does the relevant law have any environmental or carbon emission taxes or schemes?
Austria
The EU Emissions Trading Scheme applies to all aircraft flying within the EU. Under this Scheme aircraft operators are allocated a limited right to emit carbon and are required to purchase additional rights if their emissions exceed the rights granted while those emitters within their limits can sell any unused allowances. However, aircraft flying from and to third countries are exempted from the EU Emissions Trading Scheme for the time being.
Brazil
There is no specific carbon emission tax in Brazil. The Brazilian National Civil Aviation Agency (“ANAC”) has been controlling the issuance of carbon gases from Brazilian airlines in international flights since January 1, 2019. Such measure is ruled by the Resolution 496 published by ANAC on November 27, 2018 as a consequence of the compliance with the environmental liabilities described in Appendix 16, volume IV, of the Chicago Convention as ratified by Brazil.
Colombia
Colombia has within its regulation, due to Law 1816 of 2016, the National Carbon Tax that was implemented with the purpose of incentivizing the reduction of greenhouse gas emissions. In this way, the sale in Colombian territory, the withdrawal for own consumption or for the marketing and the import of ACPM, Kerosene, Jet Fuel and Fuel Oil are levied with carbon tax. When these fossil fuels are exported, the carbon tax will not be caused.
Currently, it is normally paid on January 1st and is COP$16,422 for each ton of CO2 generated. The tax rate will depend on the carbon emission factor and the value established by law for each type of fuel mentioned above. This fee is expressed in unit volume (kg) per energy unit (J).
The taxpayers of the National Carbon Tax are those who purchase fuels from their producer or importer. Producers and importers shall also be taxpayers when making withdrawals for their own consumption.
In accordance with Article 1 of Decree 2442 of 2018, tax controllers must declare and pay this tax on a monthly account. There are no rules that allow exemption for the report of this tax, which is why the return must be filed, even if it is in zeros.
All resources collected through this National Carbon Tax are allocated to the Fund for Environmental Sustainability and Sustainable Rural Development in Conflict-Affected Zones. In this way, this money is used to issues such as management of coastal erosion, the conservation of water sources, the protection of ecosystems and other environmental objectives set by the Fund.
Czech Republic
The civil aviation sector was included in the European Emission Trading Scheme (EU ETS) by Directive 2008/101/EC of the European Parliament and of the Council amending Directive 2003/87/EC as of January 2012. The Directive has been properly implemented into the Czech legal system. Pursuant to this legislation, aircraft operators are required to monitor and report greenhouse gas emissions, which which involves drawing up a monitoring plan for annual emissions; such plan is subject to approval by the Czech Ministry of the Environment. Please note that operators of non-commercial aviation transport with total production of greenhouse gas emissions lower than 1,000 tons are excluded from the EU ETS. In addition, until 31 December 2023 the EU ETS will apply only to flights between airports located in the European Economic Area (EEA), whereas flights coming from outside the EEA or made from the EEA to third countries are exempt.
Moreover, in 2016 the International Civil Aviation Organization (ICAO) adopted a global market-based measure and agreed on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which would come into operation in 2021. Under CORSIA, aircraft operators of all ICAO member states (including the Czech Republic) must monitor, report and offset any annual CO2 emissions from international civil aviation that are above 2020 levels. This will only apply to international flights, not domestic ones. Participation in CORSIA will be voluntary during the pilot and first phase (2021-2026) and will become mandatory for all states in the second phase, as of 2027.
Germany
Germany as a member state of the EU and as such a part of the EU’s emission trading system (ETS) that is based on the Directive 2003/87/EC.
Thereunder, each year polluters have to surrender a number of permits equivalent to the amount of CO2 they emitted in the preceding year. Polluters acquire permits through an annual allocation system, and some are issued by the member states free of charge. If polluters do not have enough allowances to acquit their previous year’s emissions, they have to buy additional permits at an auction or from other companies having a surplus. The EU puts a maximum cap on the CO2 emissions that are allowed to be emitted by restricting the number of permits available on the market. Thus, the theoretical concept is as follows: as issued permits become scarcer due to progressive reductions in the cap, the permit price goes up, providing emitters with an incentive to reduce their emissions if that is cheaper than buying permits.
Aviation was incorporated in the EU ETS, effective as of 1 January 2012 (Directive 2008/101/EC), and required all airlines departing or arriving at an EU airport to surrender allowances covering the emissions of all EU flights they had operated in a given year. Following an international outcry orchestrated by US carriers against the inclusion of foreign carriers in the scheme, the European Commission limited the scheme’s application to airlines operating flights in and between EU airports only (“stop-the-clock”). This was billed as a temporary measure to give ICAO time to agree on a global measure. When minimal progress was made at ICAO’s 38th assembly in October 2013, the clock was stopped again. In October 2016, the ICAO adopted a global market-based measure and agreed on a resolution on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which should become operational in 2021. Thereafter, the Commission proposed to extend the exemption indefinitely pending a review of the effectiveness of CORSIA.
CORSIA has been established in order to monitor, report and offset any annual CO2 emissions from international civil aviation that are above 2020 levels. It will only apply to international fights, not domestic ones.
Participation will be voluntary during the pilot and first phase (2021-2026) and will become mandatory for all states in the second phase, as of 2027. Exemptions would apply to flights from and to small island developing states, least developed countries, landlocked developing countries, and countries with low levels of aviation activity. Contrary to the ETS, which is a ‘cap and trade’ scheme that sets an upper limit for the total amount of emissions, CORSIA is an ‘offsetting scheme’, implying that emissions can grow, but must be compensated by offsets.
Greece
The matter is regulated by Directive (EU) 2003/87, establishing a scheme for greenhouse gas emission allowance trading (ETS) within the EU, as amended and in force (Chapter II, art. 3a et seq.). Greece accepts the provisions of the said EU directive as fully applicable in Greece. The Ministry of Environment, Energy and Climate Change is responsible for monitoring compliance of aviation companies with their obligations under the said Directive.
There are no local carbon emission taxes in Greece.
Israel
N/A
Italy
Some Italian Regions have introduced an environmental tax on aircraft noise (so called IRESA), to collect funds for the management of social costs arising therefrom, such as airport monitoring systems, anti-pollution measures and indemnification of people affected by aircraft acoustic pollution. The tax is based on the aircraft maximum take-off weight, regardless of specific urban characteristics of each airport, the actual noise level of aircraft and the distinction between daytime and night-time flights.
The IRESA tax must be paid by the aircraft operator, for both private and commercial flights.
As a Member State of the ICAO, Italy takes part to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) aimed to address CO2 emissions generated by the international air transport sector.
Kenya
Not applicable.
Mexico
No.
Nigeria
Nigerian law makes no provision for the payment of environmental or carbon emission taxes.
Norway
About 80 % of greenhouse gas emissions in Norway are taxed and/or regulated through the emissions trading system (Norway takes part in the EU ETS). These apply mainly to emissions from the use of fossil energy sources.
The general tax level on greenhouse gas emissions is NOK 500 per tonne CO2. A CO2 tax of NOK 1,30 per litre of mineral oil used by aircraft on domestic flights will be charged, as well as a sulphur tax of NOK 0,133 per litre of mineral oil. None of the Norwegian taxes mentioned are payable on fuel for international flights. Furthermore, a NOx tax is due for emissions from the aircraft’s propulsion machinery when the total installed power is more than 750 kilowatts. In 2019, this tax will be NOK 22,27 per kilogram of nitrogen oxides emitted. Tax exemptions are granted for aircraft’s operating in direct traffic between Norwegian and foreign airports.
Panama
The Republic of Panama maintains environmental regulations on carbon and other emissions. There are currently no taxes, but the regulations contain fines and penalties for violations.
Peru
In Peru there is no law that seriously affects carbon emissions; however, a general scope regulation called Law N°30754 Framework Law on Climate Change has been foreseen, which seeks to promote public policies for the integral, participative and transparent management of climate change adaptation and mitigation measures.
With regard to the private sector, a bonus system has been created whereby a private company can optionally acquire the so-called “CARBON BONS or CARBON CREDITS” in a voluntary market through projects that reduce the emission of gases into the environment, contributing to reducing the greenhouse effect caused by global warming.
Portugal
The European Union emissions trading system (EU ETS) (Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003) was implemented in Portugal by Decree-Law nr. 93/2010 of 27/07.
Puerto Rico
There is no state legislation covering this matter in Puerto Rico.
Romania
By Order 1801/2011 Romania adopted the National Action Plan on reducing greenhouse gas emissions in the field of civil aviation for the period 2011– 2020. This order provides for aviation operators the responsibilities regulated by the Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community.
South Africa
- Carbon tax may be imposed, which is a tax imposed on any company that burns fossil fuels. Most common fuels include coal, oil, gasoline and natural gas. The tax rate is currently at R120 per tonne of carbon dioxide equivalent.
Spain
Carbon Emissions Scheme – From 2012 onwards, the Aviation Emissions Directive is in force. This Directive provides that EU emissions Trading Scheme shall apply to all aircraft flying to and from the EU. Aircraft operators are allocated a limited right to emit carbon and are required to purchase additional rights if their emissions exceed the rights granted.
The autonomous region of Catalonia has its proper N2O emissions tax. Please note that this tax has been challenged and is under court review.
Switzerland
Due to the so-called “stop-the-clock” derogation by the EU, flights from and to third countries (such as Switzerland) are, at least for the time being, exempted from the European Emission Trading Scheme (EU ETS), pursuant to which aircraft operators are required to issue compensate emission by allowances for all flights that take off and land in the European Economic Area (EEA, EU member states, plus Iceland, Norway and Liechtenstein). However, since 2018 Swiss legislation requires aircraft operators to monitor and report emissions for domestic flights and flights from Switzerland to EEA Member States, with the aim to have the EU and Swiss emissions trading schemes linked. Switzerland plans to integrate aviation emissions into its own scheme after the two systems have become formally linked, a process that is still ongoing. In the meantime, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) has been implemented by the International Civil Aviation Organization (ICAO). Under CORSIA, from 2019, aircraft operators of all ICAO member states (incl. Switzerland) must monitor and report their emissions on international flights and from 2021, aircraft operators will have to compensate for a part of their CO2 emissions by purchasing and cancelling CO2 emission units. How the EU intends to integrate aviation into the EU ETS after 2020 and how a potential interaction with CORSIA could be structured has yet to be decided.
United States (Miami)
Depending on the type of operation, taxes may apply. Applicable taxes, include, without limitation, Passenger Ticket Tax, Flight Segment Tax, International Departure Tax, International Arrival Tax, Cargo Waybill Tax, Commercial Jet Fuel Tax, Non-Commercial Jet Fuel Tax, etc.