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E.U. halts aviation emissions trading program

The European Union today delayed implementation of its cap-and-trade program for aviation emissions, citing international efforts to find a global solution.

The E.U. plan, part of its broader Emissions Trading System (ETS), originally took effect Jan. 1. All airlines landing or taking off anywhere in the European Union were due to be affected, although companies were not required to pay anything until next year.

The decision to put the brakes on implementation occurred in light of signals Friday that the International Civil Aviation Organization (ICAO), a U.N. agency that handles global aviation matters, will make a concerted effort to introduce a global program that would reduce airline greenhouse gas emissions.

As a result of today's E.U. decision, international airlines -- but not those flying within the European Union -- will not have to submit emissions allowances for international flights for the year 2012. Originally, those were due by April 2013.

Under the ETS plan, carbon emissions from airplanes would be capped at 97 percent of the 2004 to 2006 levels. To begin with, airlines would have to buy 15 percent of their emissions certificates at auction.

The proposal has met with considerable international disapproval, including from the Obama administration and members of Congress.

The House and Senate have both approved bills that would bar U.S. airlines from participating in the program. The Senate bill gives the administration leeway to lift the ban if either the European Union amended its law or a global agreement was reached (ClimateWire, Sept. 24). The House is expected to vote as early as tomorrow on whether to adopt the Senate language.

U.S. airlines also sought to challenge the program in the courts, a move that met with defeat when the European Court of Justice ruled that it was not in conflict with international law (Greenwire, Dec. 21, 2011).

Critics have always maintained that the best way of tackling the problem would be via ICAO.

At a Senate Commerce, Science and Transportation hearing in June, Transportation Secretary Ray LaHood said the European Union "needs to engage constructively to find a global approach that works for the rest of the world and allows it to set aside ETS in relation to foreign carriers."

The European Union's commissioner for climate action, Connie Hedegaard, said today that Europe also had always favored that approach and was delaying implementation of its program because of the positive signs that emerged from the ICAO meeting Friday.

Among other things, ICAO agreed to set up a policy group to explore the a global "market-based mechanism" to address aviation emissions. The plan is for ICAO to vote at a meeting next September on whatever proposals the policy group comes up with.

"Our regulatory scheme was adopted after having waited many years for ICAO to progress," Hedegaard said at a news conference in Brussels. "Now it seems that because of some countries' dislike of our scheme, many countries are prepared to move in ICAO."

As a result, "finally we have a chance to get an international regulation on emissions from aviation," she added. "This is a long-sought-for opportunity that we must use."

Hedegaard also made it clear that if ICAO does not follow through, the E.U. program will go into effect.

Her announcement was welcomed by Airlines for America, the U.S. industry's main lobbying group.

"We are cautiously optimistic about today's actions," spokeswoman Jean Medina said. "As we have said consistently, we believe a global sectoral approach though ICAO is the best way to address aviation emissions."

The group nevertheless expects Congress to go ahead with the anti-ETS legislation, she added.

Environmentalists also appear hopeful that the ICAO meeting Friday will bring concrete results.

"It was a major step forward," said Annie Petsonk, the Environmental Defense Fund's international counsel. "They have come up with some very good and creative ideas."

All eyes will now be on whom the administration appoints to be its representative on the ICAO policy group, she added.

Reporter Eugene Mulero contributed.