US Senate Throws Down Gauntlet to EU over ETS

As I have written before in this blog, the EU has already been served notice that the US as well as China are not prepared to submit to the EU's Emissions Trading Scheme (ETS) when payments become due for all aircraft using EU airspace after April 2013.

This week the US Senate passed a bill that would prohibit US airlines submitting to the EU's unilateral move to force foreign airlines to participate in the EU ETS.  China has already told its airlines to ignore the EU.  Such a bill would require Presidential approval and President Obama has said that he does not agree with the EU's unilateral action.  However, it is not a foregone conclusion that the President would wish to provoke a direct challenge whilst there is a chance that an international carbon trading scheme for aviation might come into being under the auspices of the International Civil Aviation Organisation.   In a concilliatory move the EU has said it would be prepared to participate in the ICAO's global initiative as long as it shared the EU's own agenda.

Understandably US aviation and businesses have not reacted well to the EU's challenge to their nation's sovreignty - its after all pretty high-handed of Brussels to in effect expect to be able to unilaterally impose taxes on other nations.   So its not surprising to learn that a collective of US business groups including A4A (Airlines for America) are pressing the Obama Administration to mount a legal challenge through the Chicago Convention on the basis that the EU is seeking to impose an extra-terrestial tax on mileage flown outside of the EU's air space.

Let's hope that a trade war with Europe does not break out - The Eurozone is in dire straits anyway - what it does not need is a debilitating fracas with the rest of the world - as they say  "War does not determine who is right, it determines who is left."