Archive for the ‘European Union’ Category

President Obama Opts Out of E.U. Aviation Fees

Photo by thatsabigif. Some rights reserved.

Hot on the heels of his re-election, President Obama signed a bill Tuesday (one that had no trouble getting through the Senate and then the House earlier this year) that would exempt the U.S. (and more pointedly, its airlines) from a carbon tax for planes flying in and out of Europe. The carbon fees were first proposed by the E.U. in 2006 and adopted by the European Parliament in 2008, however the plan was delayed by the EU itself earlier this month, hoping that a year delay would give time for “a global agreement on aviation emissions.”

The legislation itself operates much like other carbon credits-based trading plans, where airlines would receive trade-able credits that would cover certain amounts of CO2 emissions per year, and any additional emissions would result in the mandatory purchase of more credits. The idea, as is most likely apparent, is to promote more efficient, less environmentally-damaging air travel by imposing taxes that are of low cost to the consumer.

The White House has thus far been quiet in their response to the bill exempting the U.S. from the carbon fees, though the industry group Airlines for America has said that “Obama’s signature will allow carriers to reduce emissions through international agreements.”

A Trade War at 30,000 Feet

Will the F22 Raptor be subject to the ETS? Photo by Mark Kent. Some rights reserved.

The U.S. joined twenty-three other nations on Wednesday in signing the so-called Moscow Joint Declaration to protest the EU’s Emissions Trading Scheme (ETS), which in 2008 was extended to include aviation. It is the latest show of American opposition to the scheme, following a joint letter from the U.S., Canada, and Mexico to the International Civil Aviation Organization that we covered in 2010, and a bill passed in the House last year that prohibits airlines from participating in the ETS. Some of the other signing nations – which include China, Russia, India, Japan, and Saudi Arabia – are considering similar legislation.

The Emissions Trading Scheme, or ETS, is a declining cap on emissions for airlines, with allowances initially distributed based on the sector’s emissions in 2010. Eighty-two percent of the allowances will be given to airlines for free, 15% will be auctioned, and 3% reserved for new or fast-growing airlines. The cap will be reduced gradually to the average level from 2004-2006. Under such a scheme, airlines can choose the best way to meet their emissions obligations, either altering their operations or paying others to reduce their emissions by buying more allowances.

Wednesday’s Joint Declaration disputes the EU’s authority to regulate flights over international or other countries’ airspace. In response, the EU points to the Chicago Convention on international air regulation, which states that regulations must apply equally to all airlines regardless of their nationality. The Joint Declaration also echoes some of the U.S. House bill (which the Green Mien covered here), objecting that the EU’s action might jeopardize the prospects for coordinated international action. The EU has said it will scrap its program if a multilateral alternative comes around.

Is there a way forward? The aviation industry says it will lose $3 billion per year, so we can expect their continued opposition. Environmental advocates and sympathetic governments (including most of Europe, apparently) will point to the International Panel on Climate Change estimates that the aviation sector is responsible for 3.5% of climate change, and to the projected 183 million tons of CO2 reduced per year by 2020. While many governments opposing the ETS support an international solution administered by the International Civil Aviation Organization, the branch of the U.N. that coordinates international standards and procedures, it has been debating such a plan for more than a decade, with no emissions reduction scheme to show for it.

The possibility of a carbon trade war looms, and the Joint Resolution indicates that many countries are willing to start one. Signers of the Resolution stated their willingness to coordinate in retaliatory actions against European airlines that fly internationally, like Air France and British Airways, and Russia is threatening to resume charging airlines for flight routes over Siberia, a practice it abandoned recently. Their goal: to postpone or cancel the ETS.

EU Adds Sanctions to Widening Iranian Oil Embargo

The Persian Empire ca. 5th century, BCE. Photo by Paolo Porsio. Some rights reserved.

While here at the Green Mien we typically write about US-centric energy policy, today’s post crosses the Atlantic to discuss the European Union’s new trade and financial sanctions on Iran. On January 23rd, the EU passed two Regulations (here and here) and a Decision regarding Iran. These new sanctions include an embargo on imports of Iranian crude oil as well as broad restrictions on business with the Iranian energy industry.

Phased-in through July 2012, the embargo prohibits the import, purchase, and transport of Iranian crude oil and any petrochemical products – and any related financing. The ban extends to all Iranian oil firms, even those operating outside the country, and prohibits investment in these companies. Further, exports of equipment and technology to be used by the Iranian oil industry are strictly controlled.

A memo from Sidley Austin explains that the expanded embargo targets the main sources of funding for Iran’s nuclear program. It’s a highly charged geopolitical battle on which the Green Mien writers are not prepared to take a stance. A memo from SNR Denton, however, points out that as the EU (and Australia, as they have announced recently) follows suit to join US and UN sanctions, and other countries such as South Korea and Japan consider similar measures, governments and industry worldwide will have to develop enforcement and compliance standards, respectively. For American firms, the US Treasury has an overview of sanctions regulations on their website’s resource center.

“U.S. vs. EU ETS” More Than One Year Later

Photo by chimothy27. Some rights reserved.

While I had every intention of throwing the Green Mien a one-year anniversary party, the day (September 8th) slipped by unnoticed.

One thing that hasn’t slipped by unnoticed? The European Union’s Emissions Trading Scheme (ETS), which was spotlighted on the Green Mien just over a year ago.

The EU’s Directive 2008/101/EC, which requires airlines with operations “to, from and within the EU” to limit their aircrafts’ carbon dioxide emissions and/or buy allowances to cover their emissions, is still scheduled to go into effect in 2012. But to say it’s an unpopular plan stateside would be an understatement.

Just yesterday, the House of Representatives passed a bill (H.R. 2594) that prohibits “operators of civil aircraft of the United States from participating in the European Union’s emissions trading scheme.” There will be no playing nicely with others here.

H.R. 2594 calls the EU trading scheme “inconsistent with long-established international law and practice,” claiming that it “undermines ongoing efforts at the International Civil Aviation Organization to develop a unified, worldwide approach to reducing aircraft greenhouse gas emissions and has generated unnecessary friction within the international civil aviation community as it endeavors to reduce such emissions.”

The Hill’s Floor Action Blog has more.

%d bloggers like this: