European Union Emissions Trading Scheme (EU-ETS)

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Lawmaker Voices EU-ETS Concerns on Senate Floor

May 16, 2012

Sen. John ThuneIn a vigorous appeal for passage of his bipartisan bill to prevent U.S. aircraft operators flying to and from the European Union from being forced to comply with the EU’s Emissions Trading Scheme (EU-ETS), Sen. John Thune (R-SD) implored lawmakers to consider the significant economic burden to businesses forced to comply with the controversial measure.

“Very simply, the unilateral imposition of such a scheme on the United States and other counties is arbitrary, unfair and a violation of international law,” Thune said on the Senate floor on May 9. “Plus, it is being done without any guarantees for environmental improvements and at a huge cost to the aviation industry and constituents we serve.”

Thune cited a study by the International Air Transport Association (IATA) that placed the cost to airlines for EU-ETS compliance at $1.3 billion in 2012, increasing nearly threefold to $3.5 billion by 2020. “[S.1956] gives the Secretary of Transportation the authority to take the necessary steps to ensure America’s aviation operators are not penalized by any system unilaterally imposed by the EU,” said Thune.

“Doing nothing is not an option,” he continued. “The unilateral imposition of the EU Emissions Trading Scheme is a violation of international law and is hurting U.S. airlines, manufacturers, and consumers.”

In addition to the detrimental effects EU-ETS would have on U.S. airlines, the scheme carries even more onerous burdens for business aircraft operators.

Under EU-ETS, carbon credits are available to be bought, sold and traded on the open market. However, commercial operators may also take advantage of carbon offsets that are not as readily available to business aircraft. Those offsets enable airlines to pay a significantly lower percentage in emissions-related fees: 15 percent, compared to as much as 96 percent for business aircraft operators.

The proposed scheme also requires operators to provide sensitive data to authorities, including bank account information, flight data and other disclosures, raising concerns about privacy. In addition to concerns about privacy and cost, there is little assurance that EU-ETS will have any meaningful impact on curbing greenhouse gas emissions, as the EU cannot force its member states to invest ETS fees into emissions-abatement programs.

NBAA is a member of a coalition of 15 U.S. aviation groups and interests supporting S.1956, which Thune introduced in December 2011. The House of Representatives overwhelmingly passed similar legislation last October.

The U.S. State Department and the U.S. Department of Transportation have also voiced their opposition to the EU’s broad enforcement of the scheme, joining authorities in several other countries, including Brazil, India, Japan and the Russian Federation. China has threatened to cancel a large airliner order with Airbus unless enforcement of EU-ETS is reigned in.

Review NBAA's EU-ETS compliance resources.