US Congress Tackles EU Emissions Plan

October 24, 2011

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A proposed law shielding US airlines from a European effort to make carriers worldwide pay for carbon emissions gained traction on Monday in the House of Representatives and was likely headed for passage.

Lawmakers were poised to send a strong message to the European Union on its unilateral action, which is opposed by carriers globally and a number of countries, including China.

"We made it clear that the United States would pursue the matter," House Transportation Committee Chairman John Mica told reporters. "They were not very happy campers."

Mica discussed the matter with EU officials last week in Montreal, and called the initiative "a taxing scheme" and a violation of international law and treaties.

European officials had no comment on developments in Congress.

There is bipartisan support for action in the Republican-led House, but Democrats on environmental committees embrace efforts to cut emissions and urged the bill's defeat.

Still, the measure is expected to pass even though the bar for approval is high, at two-thirds majority support.

There is no companion legislation in the Senate, and it was unclear if the Democratic-led chamber would embrace the House action even if it were put up for a vote.

Combined with Obama administration opposition, House approval of the measure alone would send a strong message to Europe about US sentiment.

The Obama administration has issued "strong legal and policy" objections to inclusion of non-EU carriers in the plan, and does not see the current legal process in Europe addressing the matter satisfactorily.

Under the plan due to take effect in January, pending the outcome of legal wrangling, airlines will have to buy permits under the EU's emissions trading scheme to help offset greenhouse gas pollution from commercial jets operating in or to and from Europe.

The change would impact the largest US carriers, including United Airlines, Delta Air Lines, American Airlines and US Airways.

Airlines, which estimate the regulation would cost them more than USD$3 billion by 2020, face stiff fines for non-compliance.

American, which has a large presence at London's Heathrow airport, has spearheaded the legal challenge of the new rule now before the European Court of Justice.

But airlines ultimately expect the matter will rest with international aviation officials at the United Nations.

Other countries have raised objections, including India and China. Beijing has threatened to delay purchases of planes made by Europe's Airbus -- a potential benefit for Airbus rival, US-based Boeing.