GOP lawmaker calls on Obama to fight possible EU shipping tax

By Pete Kasperowicz - 10/04/12 03:20 PM ET

Rep. James Sensenbrenner Jr. (R-Wis.) called on the Obama administration on Wednesday to shield U.S. shipping companies from new taxes the European Union is threatening to impose in order to reduce greenhouse gas emissions.

"The European Union is threatening a new set of taxes on Americans," Sensenbrenner said. "After introducing an illegal tax on all flights to and from Europe, the EU announced that it wants to force a similar scheme on shipping.

"The EU's airline tax begins accruing while the carrier is in American airspace," he added. "Americans are forced to pay higher fares, even when flying U.S. carriers, to comply with the EU tax. If they move forward with a new shipping tax, it will impact the price of goods and manufacturing."

Sensenbrenner said Obama failed to press Europe hard enough on the airline tax, and said failure to fight back on a new shipping tax could be disastrous for U.S. economic growth.

"While the Administration has voiced disagreement with the EU's airline tax on Americans, it has not only failed to stop that tax, but the EU is now ready to extend the illegal tax to another industry," he said. "Both the House and Senate have taken bipartisan action on the EU's airline tax, but the Obama Administration must step up its efforts and protect the U.S. economy."

Sensenbrenner was reacting to a Monday announcement from the European Commission that said it supports an international agreement to limit greenhouse gas emissions from ocean-going vessels, but said in the meantime, it would pursue a more immediate, unilateral system.

While the statement did not specifically mention a new tax, it did say that a process for monitoring, reporting and verifying emissions based on fuel consumption is "the necessary starting point." It also mentioned the possibility of "market-based mechanisms" aimed at reducing emissions, but did not clarify what those might be.

The EU has previously raised the idea of taxing ships based on their emissions, however, and efforts to monitor and report emissions levels could be a precursor to a tax.