Bloomberg News

Airlines See Passage of U.S. Measure Opposing EU Emissions Rule

October 26, 2012

The airline industry expects Congress to enact, and President Barack Obama to sign, legislation authorizing the U.S. to prohibit airlines from complying with European Union emissions regulations, an industry lobbyist said.

The House will enact legislation already approved by the Senate during a so-called lame-duck session of Congress after the election, or the proposal may be attached to budget legislation, Sharon Pinkerton, senior vice president for policy at Airlines for America, said at an American Bar Association Aviation Law Forum in New Orleans.

The industry group, whose members include Delta Air Lines Inc. (DAL:US), United Continental Holdings Inc. (UAL:US), United Parcel Service (UPS:US), FedEx Corp. (FDX:US) and AMR Corp. (AAMRQ:US), supports the bill, which the Senate passed Sept. 22. The 27-member EU’s Emission Trading System would impose financial penalties on airlines for breaching certain air-pollution limits unless they obtain credits. U.S. carriers consider the measure a tax and say it violates international law.

“U.S. policy makers are solidly and unanimously opposed to the application” of EU emissions requirements to U.S. carriers, Pinkerton said. “Having the EU unilaterally apply what is essentially a tax to U.S. carriers and passengers is absolutely a violation of U.S. sovereignty.”

Negotiation Pressure

If enacted, the law may increase pressure on EU leaders to make accommodations on the requirements that U.S. airlines meet emissions requirements or risk a trade war. U.S. airlines must file reports early next year to the EU that will indicate whether carriers meet limits in the 27-nation bloc. Airlines that don’t meet the limits must purchase credits to come into compliance or face the possibility of fines.

U.S. Transportation Secretary Ray LaHood testified on June 6 to a Senate hearing that the administration opposes the EU plan to force compliance by U.S. airlines.

“The path is not smooth to implementation” of the EU requirements, said Julie Oettinger, the Federal Aviation Administration’s assistant administrator for policy, international affairs and environment. The EU requirement has been a “major distraction” that has prevented the United Nations aviation policy body from making greater strides on global aviation emission reductions, she said.

There probably will be “some kind of decision by the EU not to enforce” the requirements by April 30, said Duane Woerth, U.S. ambassador to the UN body, called the International Civil Aviation Organization. “There’s not a pleasant path to April 30 that’s going to go smoothly without something changing.”

EU Leaders

EU leaders cannot easily back down from the emissions requirement because it is law, said Felix Leinemann, the Washington-based first secretary of the transport, energy and environment section for the EU. The EU emissions regulation isn’t a tax; it’s not discriminatory and it doesn’t impinge on sovereignty, he said.

“The European Union takes climate change very seriously,” Leinemann said. “Why should aviation be excluded?”

If the EU does scale back the requirement to a lower threshold, environmentalists “want certainty of what the EU scales back to isn’t challenged again,” said Timothy Johnson, director of the London-based Aviation Environment Federation.

A global agreement on aviation emissions is eventually needed to replace the EU standard, he said.

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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