Isra-Mart srl: EU-US dogfight over cleaner sky

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The European Union's Emissions Trading System (ETS) is the Union's key tool in combating climate change by reducing industrial greenhouse gas emissions in a cost-effective manner. Starting from January 2012, the airlines will join the ETS scheme, meaning that all freight and passengers carriers, regardless of their origin, entering or leaving airports in the EU would need to either reduce their emissions or pay a charge.

So far, the EU's environment policies have interfered excessively in relations with Europe's most important partner, the US, which places far less emphasis on global warming.

For the first time, the EU's regulations on climate change will directly affect American consumers, through the higher costs of their cross-Atlantic flights, although it is still unclear how much higher prices will be.

In addition, EU regulations are introducing a new type of competition to American markets, with the least-polluting airlines benefiting from the lowest emissions fees.

Under the current scheme, all airlines landing at EU airports would have to reduce their gases emissions by 3% from average levels between 2004 and 2006, or buy carbon permits to compensate.

As a result, the US airline companies have fought vigorously against inclusion in the ETS. The recent lawsuit before the European Court of Justice (ECJ) argued that the EU did not have the legal right to regulate American carriers nor flight emissions released over countries or into international airspace.

As the ruling is not expected before the end of the year, the issue sparked diplomatic tensions as well.

On 27 July, State Department Office of Aviation Negotiations Director Wendell Albright said: “The European Union is imposing this on US carriers without our agreement,” and added that it was for the US “to decide on targets or appropriate action for US airlines with respect to greenhouse gas emissions”.

Air Transport Association Environmental Affairs Vice President Nancy Young accused the European Union of “attempting to regulate the airlines of the world,” underlining that “the plan violates international law”.

The airlines project additional spending of $3.1 billion (€2.1 billion) on carbon permits by the end of decade, which could ultimately raise the price of a transatlantic tickets.

In response, Climate Action Commissioner Connie Hedegaard said that European leaders are “trying to do something with climate change”. She added that “emissions targets for sector after sector” were set and reminded that power producers were included, manufacturing would be included and asked how the aviation sector could be excluded: “We would have liked to see a global agreement, but for how long can this sector avoid being part of the solution to the climate problem?”

Lawyers representing the EU before the ECJ stipulated that inclusion was legal and compared the emissions fees to landing charges and prohibition of noise-polluting aircraft.

The bill was introduced on 20 July by Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) to ban US air carriers from participating in the ETS. “This unjust European Union emissions-trading scheme is a clear violation of international law that puts US air carriers at a competitive disadvantage, kills US aviation jobs, and may lead to a trade war,” Mica said, presenting the bill.

US Aviation Subcommittee Chairman Tom Petri said: “The EU is not sovereign over the US or the rest of the world, and has no right to levy taxes outside the EU.”

The Association of European Airlines (AEA) Secretary-General Ulrich Schulte-Strathaus has also warned that the ETS scheme could distort the competitiveness of European airlines and said that “the EU ETS has a number of flaws. But this proposed [Congress] Bill is not the answer. If adopted, it will only increase the tensions between the EU and the US, as EU member states are bound by the ETS directive to ensure compliance.” He suggested that a far better approach for the EU and the US would be to accelerate negotiations towards a global approach within the framework International Civil Aviation Organisation (ICAO).

The ICAO is charged by the international climate treaties to oversee the reduction of airline emissions through its member states, but has been widely criticised for its ineffectiveness caused by purely voluntary measures that it was mandated to conduct.

Despite the turmoil, most American airlines have begun to monitor their levels of emissions from their European flights, preparing to enter the ETS system “under protest”, however.

Additionally, many of the companies have announced their acquisition of new aircraft from the European producer Airbus, due to higher fuel efficiency.

Finally, European officials have said that airlines could negotiate exemptions from the scheme if they provide equivalent emissions-reducing measures at home, such as use of cleaner fuels or higher ecological standards of production.