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December 05, 2012
New law addresses EU aviation scheme

On November 27, 2012, President Obama signed the European Union Emissions Trading Scheme Prohibition Act of 2011 (S. 1956), a partial and temporary solution to the inclusion of U.S. aircraft in the EU’s effort to limit emissions of CO2 during civil flights. 

Signature of the bill was preceded by 2 weeks by a decision by the European Commission (EC) to limit for 1 year the application of its aviation emissions trading system (ETS) to flights within Europe.  According to the EC, the delay is a “gesture of goodwill” that recognizes ongoing efforts by the International Civil Aviation Organization (ICAO) to develop a global, market-based approach to aviation GHG emissions.  The ICAO is currently working to reach such a solution in anticipation of its next general assembly meeting in autumn 2013. 

Entirety of flights

As originally written, the EU’s aviation ETS would have required that airlines possess tradable allowances equal to actual CO2 emissions from civil flights to and from airports in the 30 EU nations.  Allowances would have been required for all CO2 emitted during the entirety of flights, including emissions while flying in the airspace of non-EU nations and over the ocean.  Airlines that did not comply would be charged a fee for each missing allowance.

The aviation ETS encountered stiff opposition from many non-EU nations and particularly from the U.S. air industry and government, which unsuccessfully appealed the rule in the Court of Justice of the European Union (ECJ). 

Public interest

The new law directs the Secretary of Transportation to prohibit an operator of a U.S. civil aircraft from participating in any unilateral aviation ETS established by the EU if the Secretary determines that such a prohibition is in the “public interest.”  More specifically, the Secretary would need to show that the prohibition would benefit, or the absence of a prohibition would be injurious to, U.S. consumers, U.S. carriers, and U.S. operators; the economic, energy, and environmental security of the United States; and U.S. foreign relations, including existing international commitments.

The law leaves the door open for less contentious methods to reduce emissions from aircraft.  Specifically, the law allows the Secretary to reassess the prohibition at any time and, moreover, requires that such a reassessment occur should the EU amend the current aviation ETS; should an international agreement concerning a worldwide approach to address aircraft emissions be adopted; or should a law or regulation addressing aircraft emissions be issued in the United States.

The law also provides that the Secretary, the administrator of the Federal Aviation Administration, and other appropriate U.S. government officials may use their authority to conduct international negotiations, including negotiations to pursue a worldwide approach to address aircraft emissions.

Click here for the text of S. 1956.

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