US demands data from European and US airlines as it fires off first retaliatory salvo in growing dispute with EU over ETS

US demands data from European and US airlines as it fires off first retaliatory salvo in growing dispute with EU over ETS | Gretch,DOT

Mon 19 Dec 2011 – Without waiting for the ruling by the European Court of Justice this Wednesday (Dec 21) on the case brought by major US airlines against their inclusion in the EU Emissions Trading Scheme (EU ETS), the US Department of Transportation (DOT) has issued an order against nine European carriers requiring them to submit traffic and carbon allowance data to it by specified dates. An order has also been served on seven US airlines requesting similar data and additional financial information on allowance costs and income.  The orders do not specify why they require such details and what they will be used for but the inference is that it will help inform potential retaliatory financial measures on EU airlines flying to the United States. The move follows a call by the China Air Transport Association last week urging its airline members not to comply with the EU’s environmental legislation.


One order signed by Susan Kurland, the DOT’s Assistant Secretary for Aviation and International Affairs, is served on the Office of Transportation Affairs at US Department of State, the Federal Aviation Administration and nine European airlines that serve the United States: Aer Lingus, Air France, Alitalia, British Airways, Deutsche Lufthansa, Iberia, KLM, SAS and Virgin Atlantic.


They are required to submit by 31 January 2012 details of the free 2012 allowances they have been allocated, their 2010 revenue tonne kilometres (RTKs) reported to their administering state and 2010 RTKs operated on flights between the US and points in the EU and the other states that have signed up to belong in the EU scheme, Norway, Iceland and Liechtenstein. If the carriers receive free allowances different from those originally allocated, they are to report the information by 31 March 2012.


The seven US carriers – American, Continental, Delta, Federal Express, United, UPS and US Airways – are ordered to report the free 2012 allowances allocated by 31 January 2012, their estimate of allowances needed for 2012 operations covered by the ETS by 15 April 2012 and their reported 2012 CO2 emissions by 31 March 2013. They are also required to submit the monetary amount paid to their administering state in ETS allowance auctions within 15 days after the close of each auction and the amounts spent and/or received in ETS allowance markets within 15 days after each such event.


The information is to be sent to Paul Gretch, the Director of the DOT’s Office of International Aviation. Gretch recently said that the EU would find it very difficult to implement its ETS legislation on the rest of the world and feared a costly and damaging trade war between the US and the EU (see story). He told GreenAir that regardless of the outcome of the proposed bill now with the US Senate, which would prohibit US airlines from complying with the European environmental legislation, there would be pressure on the US government for retaliatory action against EU carriers.


The move was welcomed by US trade body Airlines For America (A4A), formerly the Air Transport Association and a party to the ECJ case.


“The information the US government is requesting is intended to assist in countering the illegal application of the EU ETS to US airlines,” said a spokesman. “We applaud the government efforts to turn back the application of the unilateral scheme and to bring the EU and its member states back to the international negotiating table to implement the global sectoral approach framework provisionally agreed last year by the International Civil Aviation Organization.”


The orders were only issued late Friday (December 16) so the European Commission is still digesting the implications of the move and was unable to comment on what advice it was intending to give the nine European airlines. However, a spokesman told GreenAir: “We have been notified of this DOT Order and are examining the request. As a general rule, the Commission of course normally expects EU airlines to comply with foreign laws and related orders from competent authorities.”


Despite the recent rapprochement between the EU and China in seeking a successful outcome at the COP 17 climate negotiations in Durban, good will has not yet been extended to the EU’s emissions scheme for aviation that will bring in Chinese carriers serving Europe.


Last week Reuters quoted an official Chinese news report that said the Secretary General of the China Air Transport Association (CATA), Wei Zhenzhong, had asked his member airlines to refuse to participate in the EU scheme. Wei requested the airlines not to submit CO2 monitoring plans to their administering EU states or enter into negotiations for preferential treatment.


CATA has been closely following the US case in the European Court of Justice but has so far not brought an action in which it would argue that the inclusion of China’s airlines was in contravention of the Kyoto treaty principle of common but differentiated responsibilities. However, the opinion delivered by the ECJ’s Advocate General in October that the EU had fully complied with international law has not encouraged a move.


Last month, the chairman of the UK House of Commons Energy and Climate Change Committee, Tim Yeo, recommended the government should “recalibrate” the UK’s Air Passenger Duty (APD) so that any country or operator that refused to comply with EU ETS rules should face an increased APD. On the other hand, he wrote in a letter to the UK Chancellor, those that did comply should be rewarded with a lower level of duty.




DOT order to EU airlines (pdf)

DOT order to US airlines (pdf)

Airlines For America

Reuters China airlines report



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