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Congress wants US to fight EU aviation emissions rules

3 Feb 2012, 8.09 pm GMT

Congress wants US to fight EU aviation emissions rules

Washington, 3 February (Argus) — A measure expressing the US Congress' formal opposition to the EU's aviation emissions limits is expected to pass this week as part of the Federal Aviation Administration funding legislation.

The bill includes a resolution that call on US government officials to use “all political, diplomatic and legal tools” available to “ensure that the EU's emissions trading scheme is not applied to aircraft registered by the US.” The government should work to keep the US aviation industry from facing mandatory greenhouse gas reporting requirements and allowances penalties associated with the EU's trading program, according to the bill language. This is the first year that airlines would be covered by the EU trading program.

It is “the sense of Congress” that the EU's extension of its emissions trading scheme to international aviation is “antithetical to building international cooperation to address effectively the problem of greenhouse gas emissions by aircraft engaged in international civil aviation,” the language says

The European Court of Justice in December ruled that the inclusion of international aviation does not violate any international laws or treaties, deciding against a group of US and Canadian airlines. The court said the EU's trading program only applies when aircraft are physically in the territory of one of the EU member states, so neither the principle of territoriality nor the sovereignty of other countries are compromised.

A recent study by the Massachusetts Institute of Technology and Muenster University in Germany found that because airlines will receive free allowances, US airlines could reap windfall profits by passing any compliance costs on to consumers. “When an airline is given an allowance, it has the option of selling it at the market value and not flying. Therefore, the opportunity cost of using a free allowance is income lost from not selling it. If, as occurs in perfectly competitive industries, all costs are passed on to consumers, airlines will experience windfall gains equal to the value of free allowances,” author Niven Winchester said. The study also projected that, when all costs are passed to consumers, emissions from US transatlantic flights will increase by 32pc from 2011-2020, as compared to a 35pc increase in a business-as-usual scenario.

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