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Thu, Nov 29, 2012

President Obama Signs Law Banning U.S. Participation In EU-ETS

EU Had Announced It Would Suspend Enforcement Last Month

President Obama on Tuesday signed into law a measure to stop the United States’ participation in a costly European Union (EU) scheme to impose an emissions tax on American and other nations’ aircraft operators and air carriers, the EU-ETS. The European Union Emissions Trading Scheme (ETS) Prohibition Act of 2011 (S.1956) directs the Secretary of Transportation to prohibit U.S. aircraft operators from participating in the ETS. The law directs the FAA, the DOT, and other appropriate officials to enter into international negotiations, including agreements to pursue a worldwide approach to address aircraft emissions, and to take appropriate measures under existing authorities to ensure U.S. air carriers are held harmless from any ETS unilaterally imposed by the EU. The measure also prohibits the use of FAA, DOT, Aviation Trust Fund or any other appropriated funds from being used to pay any tax or penalty imposed on a U.S. operator pursuant to the ETS.

House Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) (pictured, left) and Aviation Subcommittee Chairman Tom Petri (R-WI) (pictured, right) were among the primary sponsors of the bipartisan companion bill in the House of Representatives.
 
In 2011, Mica led a Congressional delegation to the European Union to convey opposition to the EU’s plan. Mica also led a subsequent delegation to Montreal to meet with International Civil Aviation Organization (ICAO) leaders, representatives of the EU, and other officials regarding U.S. opposition to the ETS. The original “European Union Emissions Trading Scheme Prohibition Act of 2011,” authored by Mica, Petri, and other House leaders, overwhelmingly passed the House on October 24, 2011.
 
“After fighting an uphill battle to move the U.S. Senate, which sat on the House bill for the last year, I am pleased that this measure has been signed by the President over suggestions by some environmental groups to veto the bill,” Mica said. “The law signed (Tuesday) is a clear signal that the United States will not accept the EU’s go-it-alone attempt to impose emissions taxes on other nations for activities far outside the EU’s own borders. This European emissions trading scheme is an unlawful infringement upon U.S. sovereignty, and the sovereignty of numerous other nations.
 
“Furthermore, this global emissions tax, on flights that may occur almost entirely outside of the EU’s airspace, lacks true transparency or requirements that taxes collected be spent on emissions reduction,” Mica continued. “In reality, this plan smacks of an attempt to help replenish depleted EU coffers. Although European leaders have temporarily pulled back their tax proposal, the law signed by the President (Tuesday) will help ensure the EU scheme will not resurface next year like a phoenix rising from the ashes.
 
“In order to address the continued reduction of aviation emissions worldwide, the EU, the United States, and other nations should work appropriately within the scope of the International Civil Aviation Organization rather than taking a unilateral and unfair approach,” Mica added.
 
Petri said, “The EU is free to impose taxes within their own borders but cannot and must not be allowed to impose taxes on activities carried out in other sovereign countries. Whoever came up with the crazy idea of taxing airlines for the non-European portion of flights to or from Europe needs to be reminded that the age of European imperialism is a thing of the past.
 
“I’m pleased that the President has signed our bill, and that’s proof positive that we can actually agree on some things around here,” Petri continued. “The U.S. is in discussions about emissions with ICAO, which is the correct forum for an international agreement on the matter.”

The airline industry also welcomed the President's move. "With the President's signature (Tuesday), 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 a steadfast commitment to the right way – a global sectoral approach at the international level," said A4A President and CEO Nicholas E. Calio (pictured). "Working within the framework of the International Civil Aviation Organization, the United States 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."

Earlier this month, the EU announced that it would suspend enforcement of the ETS.  While the airline industry and its customers should view this with cautious optimism, 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.

FMI: http://mica.house.gov, www.airlines.org

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