Synopsis: EPA’s recent finding paves the way for the Agency to develop standards regulating greenhouse gas emissions from aircraft. Businesses in the commercial jet manufacturing and aviation transportation industry should watch this rulemaking closely, as it will affect environmental compliance costs and may have an impact on the cost of capital purchases and daily operations.

On July 25, 2016, the U.S. Environmental Protection Agency (EPA) issued a final determination under the Clean Air Act, finding that greenhouse gas (GHG) emissions from certain types of aircraft engines contribute to air pollution that causes climate change and endangers public health and the environment.

The EPA determination applies specifically to the six well-mixed GHGs in the atmosphere: carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). Two of these six gases, CO2 and nitrous oxide, are emitted by aircraft engines. The EPA’s determination triggers its duty under Section 231 of the Clean Air Act to promulgate aircraft engine emission standards.

Approximately 89% of U.S. aircraft GHG emissions are included in the determination, from smaller jet aircraft, to the largest commercial jet aircraft on the market. The determination does not cover some small jet aircraft, including piston-engine aircraft, helicopters, and military aircraft. According to Janet McCabe, EPA’s Acting Assistant Administrator for the Office of Air and Radiation, “aircraft are the third largest contributor to GHG emissions in the U.S. transportation sector, and these emissions are expected to increase in the future.”

The EPA is not yet issuing proposed emission standards, nor are they commenting on what those standards will be. The International Civil Aviation Organization (ICAO), which works with member states and industry groups to develop international civil aviation standards and policies, anticipates releasing its international aircraft CO2 standards in March 2017. The EPA will look to the ICAO standards as a starting point in drafting domestic aircraft engine standards. ICAO member states, including the U.S., will be required to adopt standards that are at least as stringent as the ICAO standards.

According to the EPA, its determination supports the goals of President Obama’s Climate Action Plan to reduce carbon pollution from large sources. Approximately 12% of the U.S. transportation sector’s GHG emissions come from U.S. aircraft, and U.S. aircraft account for 29% of global aircraft emissions. Once the EPA promulgates aircraft emission standards, Section 232 of the Clean Air Act requires the Federal Aviation Administration to prescribe regulations that ensure compliance with these standards. Any standards that EPA sets “must not cause a significant increase in noise or adversely affect safety.”

Future GHG standards for aircraft could significantly increase the costs of environmental compliance, capital purchases, and daily operations for the aircraft engine manufacturing industry. Businesses in this industrial sector may wish to keep an eye on the EPA rulemaking, participate in public meetings, and provide comments to EPA as appropriate.