US lawmakers press Obama admin. on EU emission law

WASHINGTON Wed Mar 28, 2012 1:39pm EDT

American Airlines planes sit at their gates while others taxi for arrival and departure at O'Hare International airport in Chicago November 29, 2011. REUTERS/Frank Polich

American Airlines planes sit at their gates while others taxi for arrival and departure at O'Hare International airport in Chicago November 29, 2011.

Credit: Reuters/Frank Polich

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WASHINGTON (Reuters) - A U.S. House committee pressured the Obama administration on Wednesday to accelerate diplomatic action to resolve a global dispute over a European law that would penalize airlines for aircraft emissions.

A bipartisan panel of Transportation Committee members, mindful that the EU standard that took effect in January could trigger a transatlantic trade fight, pushed senior State and Transportation department officials to formally launch a challenge at the United Nations.

"We have to have a united front and show people we mean business," Rep. John Mica, chairman of the transportation panel, said at a hearing.

Mica and other members expressed frustration with administration efforts so far to engage Europe, and said more forceful steps are needed to challenge the EU under international law.

"I think we've done everything we could do to try to reach some reasonable accord," Mica said.

The panel will draft a letter to the administration to "take this in a direction" that could lead to a formal complaint against Europe at the U.N. body for resolving global aviation disputes, the International Civil Aviation Organization ICAO.L.

U.S. airlines have been pushing the administration to take that step after losing a case before Europe's highest court last year to stop the law from taking effect.

The standard requires all airlines flying to and from EU airports to buy permits under the EU Emissions Trading Scheme ETS.L. It has a long lead time, so no airlines face a bill until next year.

Senior State and Transportation department officials told Mica that the administration has made no decision on the next steps.

"We are looking at a whole range of options," said Chris Urs, the senior State Department official on aviation matters. "We have taken nothing off the table."

The administration has been reluctant to force Europe to engage the world at the U.N. over aviation emissions, hoping that U.S. opposition and pressure from China, India, Russia and other nations would bring the EU to the table.

The administration is exploring the possibility of imposing fees or levying other sanctions on European airlines for continued access to US airports as a way to pressure EU policymakers.

U.S. airlines have dropped their moot legal fight and are ramping up lobbying efforts to push the administration and Congress toward a more decisive stance at the United Nations. {D:nL6E7NM12Z]

The House has approved legislation that would prohibit U.S. airlines from complying with the law. Similar legislation is pending in the Senate, with a hearing set for next month.

Environmental groups also support a U.N.-brokered solution.

"The better step is for the United States, Europe, and other countries to work together with airlines and civil society to craft a global solution and enforceable domestic measures," said a joint statement from the six groups, including WWF-UK and the U.S.-based Environmental Defense Fund.

EU Climate Commissioner Connie Hedegaard is in Washington this week to discuss the issue with Obama administration officials and members of Congress. She has said repeatedly the only reason for the EU to amend its new law would be a global agreement at the ICAO.

The initial cost to airlines globally is expected to be minimal but would rise to an estimated $12 billion (9 billion euros) by the end of 2020. The levy would apply to the entire length of an aircraft's journey to an EU airport, including the section outside EU airspace.

As well as the United States, China and India have complained that the EU went ahead with a program that applies to their airspace, while the EU says it was forced to act after years of international inaction on air travel pollution.

India said last week it would ignore a March 31 deadline for submitting data under the EU ETS. India's move followed noisy protests from China, which has linked suspension of $14 billion of jet orders from European planemaker Airbus, an EADS EAD.PA unit, to its fury with the EU.

(John Crawley and Estelle Shirbon; Editing by Mike Nesbit and Gerald E. McCormick)

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