US House passes bill banning EU ETS

US House passes bill banning EU ETS

The US House of Representatives has passed a bill prohibiting US aviation operators from participating in the European Union’s Emissions Trading Scheme (ETS). The new ‘European Emissions Trading Scheme Prohibition Act of 2011’ would ban US airlines from taking part in the ETS, which is expected to come into force next year. The implications of this would be huge, as airlines would be stuck between US and EU law. The bill will now be moved to the US Senate for further consideration.

The House of Representatives ruling has been welcomed by the US Travel Association (USTA).

“During these precarious economic times, anything done to inhibit travel will be a drag on the global economy and impede recovery,” said Roger Dow, President & CEO of the USTA. “We join our US travel industry partners – and numerous foreign countries – in supporting this bill.”

Several countries, including the US, Japan, China, India and Russia, have voiced their concern over the EU’s ETS. Under the scheme, flights into or out of an EU airport would be subject to an emissions cap and trade requirements, effectively levying an emissions tax on airlines. The International Air Transport Association (IATA) has also called for the aviation industry to be exempt from the ETS.

If the US does pass ETS bill, it would put the EU in a difficult position, essentially leading to a stand-off between the US and EU. On the one hand, US airlines could not stop flying to Europe, but the exemption of the US from ETS would set a precedent for other countries to do likewise.

India recently said it was considering retaliatory measures if the EU presses ahead with the ETS.

Mark Elliott
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Mark Elliott
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