21st Oct 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.


A world without waste

A garbage crisis in Naples, Italy, gave birth to the "zero waste" movement, but is the rest of Europe brave enough to change the way it thinks about trash?

News in Brief

  1. Canada and Wallonia end talks without Ceta deal
  2. Juncker hopes for Canada accord in 'next few days'
  3. Romania drops opposition to Ceta
  4. Difficulties remain on Ceta deal, says Walloon leader
  5. Brexit could lead to 'some civil unrest' in Northern Ireland
  6. ECB holds rates and continues quantitive easing programme
  7. Support for Danish People's Party drops, poll
  8. Spain's highest court overturns Catalan ban on bullfighting

Stakeholders' Highlights

  1. EFADraft Bill for a 2nd Scottish Independence Referendum
  2. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  3. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  4. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  5. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  6. EASPDJoin the Trip! 20 Years on the Road. Conference & Photo Exhibition on 19-21 October
  7. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  8. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  9. Dialogue PlatformIs Jihadism Blind Spot of Western Intellectuals ? Wednesday 26 October
  10. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  11. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16
  12. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity