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Despite EU concession, US Congress passes bill aiming to halt US airline compliance with EU carbon scheme

Despite EU concession, US Congress passes bill aiming to halt US airline compliance with EU carbon scheme | S. 1956

Wed 14 Nov 2012 – Less than 48 hours after the EU had announced it was suspending the inclusion of flights to and from Europe from the EU ETS, the US House approved a Senate version (S. 1956) of a bipartisan bill that aims to prevent US aircraft operators from complying with the EU legislation. The bill, which authorises the Secretary of Transportation to prohibit compliance if deemed in the public interest, was one of the first to be considered after the elections recess and now goes to the President for signature. An amendment by the Senate calls for pursuance through international negotiations of a worldwide approach to address aircraft emissions. Republican co-sponsors of the original House bill, John Mica and Tom Petri, said a positive outcome could still be achieved through ICAO, although Mica warned on the House floor yesterday that ICAO did not set US policy. The final passing of the EU ETS prohibition bill by Congress has been welcomed by US airline and aviation representatives, although US NGOs said the bill was superfluous and counterproductive.

On Monday, the EU said it would ‘stop the clock’ for one year on applying its carbon reduction legislation to flights to and from the EU pending the outcome of the next ICAO Assembly in September/October 2013.

“Fortunately, EU leaders who have promoted imposing an unjust tax on international aviation have temporarily backed off the emissions tax proposal,” Mica said in a statement yesterday after the House vote. “The proposal must not be allowed to resurface in one year like a phoenix rising again from the ashes. We must ensure US operators, airlines and consumers are not stuck with a future unfair tax burden.

“This bill is a firm response by the United States Congress that this nation will not allow US jobs and our aviation industry to be threatened by the EU’s unilaterally imposed and lawful tax scheme. Participation will put US carriers at a competitive disadvantage and lead to fewer aviation jobs for Americans.”

Mica said that imposing the tax over the entire flight clearly violated international law and US sovereignty, and the scheme was nothing more than a cash grab by a struggling European Union.

Added Petri: “The European Union seems not to have noticed that it is not sovereign in the United States and has no right to levy taxes here. The non-Europeans have noticed, however, and have joined with us in protest. The delay announced by the EU is a temporary reprieve, but the message and intent behind this legislation remains unchanged.”

On the House floor, Mica said the point of the legislation was to “hold people’s feet to the fire in respecting US sovereignty”, adding “ICAO does not set the policy of the United States of America. We are a sovereign nation. We must defend our sovereignty in concurrence with international trade agreements.”

Democrat Representative Henry Waxman, who attempted but failed with US climate change legislation proposals in 2009, said the bill was counterproductive. “Rather than doing something constructive to address global warming, we are going to start a trade war with the Europeans,” he told the House.

The White House has not so far signalled whether it would sign the bill into law and some are seeing it as an early test following President Obama’s reference to global warming in his post-election acceptance speech.

“The aviation question, one of the first climate issues after the elections, puts the spotlight on the White House, which will need to put significant political muscle into helping ICAO reach agreement on a worldwide approach to address aircraft emissions,” said Annie Petsonk, International Counsel at Environmental Defense Fund.

She described the bill as superfluous at best and set a bad precedent for US foreign relations, adding: “At worst, it undermines the respect that nations need to have for each other’s laws in a globalising world.

“The airlines who lobbied so hard for enactment of this bill should join with environmentalists in agreeing on that global approach.”

The suspension of the EU ETS and the passing of the prohibition bill by Congress is a major victory for US airlines and their association Airlines for America (A4A), which first mounted a legal challenge against the EU ETS three years ago. Although the airlines eventually lost their case in the EU courts, they have achieved a key objective with US lawmakers.

“The message could not be any clearer – overwhelming bipartisan majorities in the House and Senate have spoken:  EU ETS violates US sovereignty and will not do what it purports to as the funds do not have to be used for environmental protection,” said A4A President Nicholas Calio.  “There is a better way to improve the environmental efficiency of the airline industry, and US-based carriers are already leading those efforts.”

He said significant investments had been made by US carriers in alternative fuel research and fuel-efficient aircraft, and had improved fuel efficiency by 120% over the past 30 years.

Calio reiterated A4A’s strong support for efforts to gain full agreement on the global framework provisionally adopted by ICAO at the 2010 Assembly. He said US airlines had been among global aviation leaders in developing the framework, including the industry commitment to a 1.5% annual fuel efficiency improvement through until 2020 and carbon-neutral growth from 2020 onward, “subject to critical investments by industry and governments.”

However, A4A said it was only “cautiously optimistic” about the EU suspension as it did not remove the threat of the EU ETS being implemented at a later date. A4A has previously lobbied the US administration to take action against the EU at ICAO through an Article 84 dispute procedure but the association said it would now await the EU’s future intentions.

“To the extent the EU ultimately withdraws its unilateral scheme as to international aviation, we would hope that an Article 84 case would not be necessary,” an A4A spokesperson told GreenAir.

The President of the Aerospace Industries Association (AIA), Marion Blakey, welcomed the EU’s decision but added: “While AIA recognises and applauds this important development, Ms Hedegaard’s [EU Climate Commissioner] plan must still be approved by the European Parliament and Ministers. It is also important to note that her proposal pauses, but does not repeal, the ETS law. Consequently, AIA continues to support the need for the passage of S. 1956.”

Support for the bill was not be found at World Wildlife Fund (WWF-US), whose Director of International Climate Policy, Keya Chatterjee, described it as “bad for the planet and bad for the American people.”

She said: “Unfortunately, this bill is fundamentally flawed: it presumes the US can disregard other country’s laws, it effectively calls for a trade war with one of our largest trading partners and strongest allies, and it potentially puts American families on the hook for billions of dollars to bail out the airlines for their failure to abide by international law.”

Progress was being made to regulate carbon pollution from aviation through ICAO, “but far too slowly”, said Chatterjee.

“The President’s slogan for the [election] campaign was ‘Forward’, but this bill would certainly take us backwards on the issue of addressing climate change,” she said. “We call on President Obama to veto this misguided bill and firmly establish his credibility on climate change and protecting the environment at the outset of his second term. This is his first opportunity to take real action on climate change in the next four years, and we hope he makes the right choice.”

Commenting after the passing of the bill, Isaac Valero-Ladron, spokesman for Climate Commissioner Hedegaard, told GreenAir: “Opponents of the inclusion of our legislation have always said that a global solution under ICAO is the way to go. The EU has done its part. Now it’s up to the US to show that they are serious about pushing for a global solution. There must be no more excuses towards a global deal.”

Since its announcement, the European Commission has said that all aircraft operators, including US airlines, flying to and from the EU must now return the free permits they have been issued. Although foreign carriers are not now expected to report their 2012 emissions and submit the required permits to cover their 2012 emissions by the end of April 2013, it does appear they will still be required to monitor their 2013 emissions in case the suspension is lifted failing an ICAO agreement. Intra-EU flights remain fully covered by the EU scheme.

In an email today to all aircraft operators under its EU ETS administration, the German Emissions Trading Authority (DEHSt) said that regardless of the current developments it will continue to check monitoring plans for the trading period 2013-2020.


Links:
S. 1956 - the European Union Emissions Trading Scheme Prohibition Act of 2011 (pdf)
US House Transportation and Infrastructure Committee – Mica/Petri statement on S. 1956
Airlines for America statement
Aerospace Industries Association statement
Environmental Defense Fund statement
WWF-US statement



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