Wednesday

24th Aug 2016

EU and US heading towards trade war over airplane emissions

  • The emissions cap could cost US airlines $3.1 billion between 2012 and 2020, its critics claim (Photo: Dirk-Jan Kraan)

The US is heading towards a trade war with the EU over greenhouse gas charges for airlines flying into Europe, after the House of Representatives rejected the obligation for American carriers to comply with EU law.

On Monday evening, the lower house passed a bill allowing airlines to disregard an EU law obliging all airlines, from 1 January on, to buy carbon permits when they fly in and out of Europe. Pending approval by the Senate and by President Barack Obama, the law asks for US operators to be "held harmless" from the plan, as it is estimated airlines will lose $3.1 billion between 2012 and 2020 if they abide by the EU requirement.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"This appropriately named EU scheme is an arbitrary and unjust violation of international law that disadvantages US air carriers, threatens US aviation jobs, and could close down direct travel from many central and western US airports to Europe," transport committee chairman John Mica, a Republican from Florida, said after the vote.

"Congress and the US government will not support this ill-advised and illegal EU tax scheme," he stressed.

Under EU law, airlines will be given 85 percent of the emission permits for free but will be obliged to buy the remaining 15 percent on the bloc's cap-and-trade market.

American carriers have taken the matter to the European court of justice, the bloc's highest appeal body. A verdict is due in the spring of 2012, but in a non-binding opinion issued earlier this month, the court said the emissions cap is legal.

"We are confident that the US will respect EU law, as EU always respects US law. Why else would US airlines have brought the issue to court?" climate change commissioner Connie Hedegaard tweeted on Tuesday (25 October).

But others were less sure.

“This bill could ignite a trade war that would put tens of thousands of US jobs in jeopardy,” Annie Petsonk from the Environmental Defense Fund, a lobby group, said in a statement. She said that if signed into law by Obama, the bill would leave US airlines only two options: to drop their EU routes "or become scoff-laws".

The EU requirement has also angered China, whose airline association issued a warning earlier this year, saying the emissions cap may prompt trade conflict.

Stakeholders' Highlights

  1. HuaweiMaking cities smarter and safer
  2. GoogleHow Google Makes Connections More Secure For Users
  3. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  4. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  5. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  6. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  7. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  8. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey
  9. GoogleA Little Bird Told us to Start Tweeting About Google’s Work Across Europe. Learn More @GoogleBrussels
  10. Counter BalanceThe Trans Adriatic Pipeline: An Opportunity or a Scam in the Making for Albania?
  11. Counter BalanceThe Investment Plan for Europe: Business as Usual or True Innovation ?
  12. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016