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Thu, Nov 08, 2012

Re-Elected President Obama Can Expect To Hear Quickly From Airlines On EU-ETS

EU Will Start Billing Airlines In April

Newly re-elected President Obama can expect to hear sooner rather than later from the airline industry concerning the European Union's Emissions Trading Schedule (EU-ETS). While both the U.S. House and Senate have passed resolutions barring participation in the plan by U.S.-flagged carriers, the EU plans to begin sending out bills to airlines in April.

The ICAO is expected to try again this week to seek a negotiated solution to the problem, which some say could lead to a trade war, according to a report from Reuters. The EU has said that an international solution proposed by the ICAO is the only way it will not begin billing airlines for their emissions, based on the length of the flight regardless of its point of origin. The trade association Airlines for America (A4A) has been lobbying the President to file a delaying action known as "Article 84" that would essentially stop the negotiating process. A4A spokesman Sean Kennedy told Reuters that it's not a question of if, but when the Article 84 challenge is filed.

The EU said it created its ETS as a response to inaction by the international body. It was found to be valid by the European Court of Justice, but has been strongly opposed by countries such as the U.S., China, Russia, and India.

Airlines that don't pay their assessments to the EU beginning in April will face fines from the EU, and repeat offenders could have their aircraft seized.

The government of India has said that the disagreement could place international climate talks scheduled for Doha later this month in jeopardy.

The earliest that an ICAO solution could be finalized is November of next year, when the U.N. General Assembly next meets. But sources indicate there could be a grace period in which no fees are collected or airplanes impounded between April and November, and that fines that may accrue before the General Assembly meeting could be waived as part of a face-saving agreement.

FMI: www.icao.int

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