U.S. Officially Prohibits ETS Participation

 - January 3, 2013, 2:50 AM

Despite the European Union’s decision to postpone enforcement of its Emissions Trading Scheme (ETS) for international flights until next fall, President Obama signed a bipartisan measure on November 27 that orders the U.S. Secretary of Transportation to prohibit U. S. aircraft operators from participating in the EU carbon tax plan.

“With final passage of this act, the President and Congress stand as one in declaring that the EU-ETS is an overreach, it’s wrong, and it won’t fly with operators based here in the U.S.,” said NBAA president and CEO Ed Bolen.

In November, the European Commission suddenly agreed to suspend the application of ETS to international flights to and from European airports on the condition that the 2013 Assembly of the International Civil Aviation Organization agrees a global alternative to ETS at its meeting in September and October. But EU Climate Commissioner Connie Hedegaard warned that if agreement is not reached then it will automatically re-impose ETS for international operations.

“This is an issue that should rightfully be decided within the framework of the International Civil Aviation Organization [ICAO],” Bolen added. “With passage of this measure, the U.S. government has said with clarity and conviction that it will stand in favor of international law and against the unilateral imposition of one region’s will upon the rest of the world.”

Temporary Suspension

Nicholas Calio, president and CEO of Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, concurred. “With the President’s signature today, the United States has sent an unequivocal signal to the EU and the world that while the illegal and unilaterally imposed EU-ETS is the wrong way to proceed, there is steadfast commitment to the right way: a global sectoral approach at the international level,” he said.

“Working within the framework of [ICAO], the U.S. will continue to lead the effort to secure a policy that will meet the twin goals of allowing for industry growth and continuing improvements in fuel efficiency and reduced emissions,” he asserted.

But A4A cautioned that the suspension is only temporary, and action from the U.S. government is still needed. Calio also indicated that, to the extent the EU ultimately withdraws its unilateral scheme on international aviation, there is hope that a legal challenge under Article 84 of the Chicago Convention would not be necessary.

According to Steve Brown, NBAA’s COO, the implementing triggering mechanism for action under the bill would be for the U.S. Transportation Secretary to hold a hearing and make a finding. Essentially, the Act does not fully take effect until the Department of Transportation has formally declared ETS to be against U.S. public interest.

“So clearly, what we are doing here is talking with the FAA…to explore what kind of process they are going to go through, what sort of information they plan to gather in making a decision,” Brown explained. “So we are having dialogue with government about what’s going to lead up to some determination they may take at some unknown date.”

On the other side of the Atlantic, Brown said that following Hedegaard’s “stop the clock” policy declaration suspending ETS enforcement for international flights, it will likely take the EU “a couple of months” to get the member states to agree to ratify “stop the clock.” According to a December 10 statement by the EC, the legislative process should be complete in this year’s first quarter, and in the interim it has no plans to initiate enforcement measures against operators who can now benefit from the exemption.

“What we are saying to people is that we believe ‘stop the clock’ is going to happen, and that means [EU-ETS] wouldn’t have applicability for transatlantic flying,” Brown said. “But if you are flying inside Europe, when it is implemented it will probably be applicable to flights inside Europe, because those flights are not covered by ‘stop the clock.’”

Meanwhile, NBAA is telling its members “to keep doing what you have been doing” to comply with EU-ETS, such as calculating carbon output and maintaining paperwork.