EU’s Airline-Emissions Fees Face Challenge

Diplomats from countries opposed to the European Union’s levies on airline emissions plan to meet in Moscow next week to discuss responses and potential retaliation, according to a draft agenda.

The group of more than 25 countries, including the U.S., Russia, China, India and Brazil, contends that the EU is exceeding its legal authority by imposing emissions charges on airlines for portions of flights outside the 27-country bloc.

The EU’s existing emissions-trading system expanded on Jan. 1 to include airlines, which must surrender credits to offset carbon-dioxide pollution from any flight starting or ending at an EU airport. Opposing countries say that the EU is exerting extraterritorial authority over international flights outside the EU. A top EU court in December ruled that the plan is legal.

Attacks on the EU plan are increasing. The Chinese government recently said it had prohibited Chinese airlines from participating in the EU’s system without explicit permission from Beijing. Top Indian officials recently expressed their opposition directly to senior EU officials at high-level meetings in New Delhi. The U.S. secretaries of state and transportation in December wrote to top EU officials criticizing the EU’s approach.

Airlines generally oppose the plan and fear they could become victims in a trade war. “Aviation can ill afford to be caught in an escalating political or trade conflict over EU ETS,” said Tony Tyler, director general of the International Air Transport Association, a trade group, at a recent gathering in Brussels.

In one effort to defuse the conflict, European governments and their opponents are discussing a global approach to limiting airlines’ greenhouse emissions through the United Nations’ International Civil Aviation Organization. EU officials have said that if the ICAO reaches an agreement, it could supplant the EU’s plan. Prospects for those talks remain uncertain due to differences in approach among the ICAO’s 191 member countries.

The coming Moscow meeting will focus on pressing for a deal in the ICAO and also “on coordination of activities to oppose the inclusion of international civil aviation in the EU ETS,” according to the draft agenda, a copy of which was reviewed by The Wall Street Journal.

The meeting, slated for Tuesday and Wednesday, will cover a potential legal challenge that opponents may pursue through the ICAO, even as they try to negotiate a climate deal through the same agency.

The draft agenda also covers discussion of a “basket of countermeasures” against the EU program. Politicians from opposing countries over recent weeks have said these could include steps such as new taxes or fees on EU airlines or reductions of flight frequencies.

The U.S. and some other opposing countries are unenthusiastic about pursuing countermeasures quickly, said people close to the talks. Washington instead would like to reach a global climate deal for aviation through the ICAO, these people said.
source:Wall Street Journal