Isra-Mart srl: Senate bill aims to stop US airlines being pulled into EU emissions trading

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A Republican senator introduced legislation yesterday that would attempt to stop the EU from forcing US airlines to purchase carbon allowances to cover emissions from flights in and out of the bloc.

The bill was put forward by South Carolinia Senator John Thune, but does not have a a Democratic co-sponsor so is unlikely to be passed in the Democrat-controlled Senate.

It follows a similar bill approved by the House of Representatives in October that would have effectively made it illegal for US airlines to participate in the EU emissions trading scheme (ETS). Thune said participating in the EU's emissions trading scheme (EU ETS) would cost airlines $3.1bn between 2012 and 2020 and put 40,000 jobs at risk.

"The idea that the European Union has the right to tax American air passengers and carriers flies in the face of our country's sovereignty," he said in a statement. "I reject this proposed European tax and will work with my colleagues in Congress and countless concerned stakeholders to block this tax."

Environmental campaigners have criticised the US opposition to a system they say could save around 183 million tonnes of carbon dioxide a year by 2020 and urged politicians to work with the EU when representatives meet in Washington DC later today.

But Thune's bill was welcomed by trade organisation Airlines for America (A4A), formerly known as Air Transport Association of America.

"We commend Senator Thune for his leadership in joining the administration and his colleagues in the House of Representatives in opposing the application of the EU ETS to US airlines, as it is both illegal and bad policy," said A4A president and chief executive Nicholas Calio.

"Subjecting airlines to the EU's unilateral system will be counterproductive to helping the environment, result in the loss of US jobs, and hamper airlines' ability to invest in new aircraft and continue their extensive efforts to reduce their environmental impact."

The House and Senate bills are unlikely to make it into law given they would almost inevitably spark a huge trade war with the EU and would have a huge impact on the viability of transatlantic flights.

Various legal attempts to overturn the EU's plans have also faltered, with the European Court judgement recently ruling against a group of US carriers that argued the EU's plans are illegal under international aviation treaties.

As such airlines look set to be included in the ETS from January, obliging them to hold emission allowances to cover their emissions – a move that will add to the cost of flights in to and out of the bloc.

However, the Congressional action has cranked up the pressure on the Obama administration to secure exemptions for US airlines.

President Barack Obama "forcibly" made clear his opposition to European Commission president Barroso at a recent summit meeting, said Paul Gretch, director of the Office of International Aviation at the US Department of Transportation (DOT).

Gretch told the GreenAirOnline website that the US was "pro-environmental action" but that the EU was going about reducing emissions from the sector in the wrong way.

"I fear we're heading towards a trade war that airlines and the economy cannot afford," he said, adding that the scheme is "illegal" despite EU rulings to the contrary.