March 6, 2021

U.S. and Europe Battle Over Carbon Fees for Airlines

Until now, the United States and Europe have taken a to-each-his-own attitude on how to handle the greenhouse gas emissions that contribute to global warming, leaving American consumers largely immune to aggressive European environmental regulation and its costs. But come 2012, Americans flying to Europe are likely to be paying indirectly for the emissions their trips create — chiefly through steeper fares, although uncertainty persists about how much higher they will be.

American carriers and air freight companies will also face a new type of competition, because the “cleanest” airlines will pay less in emissions fees.

The United States airline industry has fought aggressively against inclusion in the European Union Emissions Trading System, most recently in a lawsuit filed before the European Court of Justice, the European Union’s highest court. It argues that the European Union has no legal right to regulate American carriers or flight emissions that are released over other countries or into international airspace as planes make their way across the ocean. A ruling is not expected until late this year at the earliest.

The issue has also created diplomatic tensions. “The European Union is imposing this on U.S. carriers without our agreement,” Wendell Albright, director of the Office of Aviation Negotiations at the State Department, said in an interview on Wednesday. “It is for the U.S. to decide on targets or appropriate action for U.S. airlines with respect to greenhouse gas emissions.”

He said the Obama administration had voiced its displeasure to the European Union and was “exploring various options” to address the standoff.

The European emissions trading system relies on a cap-and-trade mechanism in which companies that exceed their government-mandated targets for reducing their carbon dioxide emissions must buy carbon permits from businesses that earned them by emitting less than they were allowed. New industries enter the program each year.

American carriers project that they will end up spending $3.1 billion on the carbon permits by 2020. That could ultimately raise the price of a trans-Atlantic ticket as much as $57 for a flight from New York to London, according to some industry estimates.

The European Union is “attempting to regulate the airlines of the world,” said Nancy Young, vice president for environmental affairs at the Air Transport Association, the largest airline industry group in the United States. “The plan violates international law.”

European Union officials are standing firm, saying that adding civil aviation and cargo flights to Europe’s expanding emissions trading system is both legal and nonnegotiable.

“In Europe, we’re trying to do something with climate change and we now have emissions targets for sector after sector,” said Connie Hedegaard, the European Union’s commissioner for climate action. “We now include power producers, we now include manufacturing, so how can we not include aviation?”

Under the current plan, all airlines flying into airports within the European Union will have to reduce their emissions next year by 3 percent from average levels between 2004 and 2006, or buy carbon permits to make up the difference.

Ms. Hedegaard added that was unfair to require European airlines to pay for their pollution on routes that United Airlines or Air China flew for free.

At a hearing before the European Court of Justice last month, lawyers from the European Union and environmental groups said inclusion was legal, comparing the emissions fees to a landing charge or to a prohibition on overly noisy aircraft.

Annie Petsonk, a lawyer who attended for the Environmental Defense Fund and who previously worked for the Justice Department, said: “The E.U. system is not a tax — if you don’t want to pay you can reduce your emissions. ”

At the heart of the dispute are the disparate political positions taken by Europe and the United States on appropriate measures for reining in greenhouse gas emissions and the gravity of climate change. Carbon dioxide emissions from air travel are one of the fastest-growing sources of the gases that scientists say are warming the planet, and they have an outsize effect because they are released high in the atmosphere, scientists say.

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