US Airlines First Industry to Be Regulated by Europe's Cap & Trade

Allan Bedwell of Cantor CO2e Says that the U.S. Airlines Will Be First U.S. Industry Regulated to Reduce GHG Emissions

The US Airline industry will be the first to have its GHG emissions capped by government under EU regulation. Over 700 airlines will be subject to the cap and trade requirements under the European Union Emissions Trading Scheme (EU ETS). Those airlines will be formally identified this month by the EU for regulation under Phase III of the EU ETS. All large U.S. carriers flying into Europe are expected to be on the EU’s list later this month. Many US carriers are concerned about a potential for “double jeopardy” if the U.S. Congress passes a federal cap and trade program or the U.S. EPA establishes a low-carbon fuel standard.

While some legal experts raise international law, treaty and sovereignty issues, the EU ETS is expected to move forward. Here in the US, the EPA has been petitioned to domestically regulate airline emissions. EU ETS studies on airplanes indicate they generates almost 3% of the EU’s carbon emissions, with emissions expected to increase to 5-6% by 2018. Airlines failing to meet the caps can purchase carbon offsets. Litigation over the rule is expected.

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