Last week, the United States House of Representatives approved the European Union Emissions Trading Scheme Prohibition Act of 2011, which would allow aircraft operators to dodge participation in the European Union Emissions Trading Scheme (”EU-ETS”). The EU’s cap-and-trade policy has been the subject of much discussion and controversy over the last few years because many industry leaders say that the policy is a unilateral tax on the American aircraft industry and a violation of international law. As we posted on this blog before, the U.S. Senate passed a similar bill (S. 1956) in September 2012. After reconciliation, the bill heads to the desk of President Obama for his signature.
The passage of this bill comes on the heels of a surprising suspension of the ETS provisions for a year. The International Civil Aviation Organization (“ICAO”) recently announced that it would work to develop a plan to reduce global emissions of the aviation industry, thus prompting the EU to delay the inclusion of the aviation industry until after the ICAO General Assembly meeting in fall 2013. If ICAO fails to resolve the issue or make substantial headway, the recent suspension will only serve to postpone the controversial measure.
As this issue progresses, please check back to this blog for future posts.