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Aviation Law Alert - U.S. Aircraft Operators Possibly One Step Closer to Avoiding EU-ETS Requirements: Senate Passes SB 1956

On Sept. 21, 2012, the U.S. Senate passed a bill (Senate Bill 1956) which, if signed into law, will give the Secretary of Transportation the authority to make it illegal for aircraft operators in the U.S. to comply with the European Union's (EU's) onerous Emissions Trading Scheme (ETS). The EU's ETS requires U.S. aircraft operators to buy and surrender carbon credits for flights to the EU member nations. The requirement to buy and surrender carbon credits goes into effect March 31, 2013 - although, in the months and years before this compliance date, various EU member nations have required U.S. aircraft operators to submit annual emissions monitoring plans and reports and participate in a complicated multi-step process to open carbon credit trading accounts.

Senate Bill 1956 goes now to the House of Representatives for approval which seems likely given House's passage of a similar bill last year (H.R. 2594). After a vote in the House of Representatives the Bill will go to the White House for signing. It is unclear at this point when the legislation will make it to President Obama's desk or whether the President will sign it given President Obama's support of domestic "cap and trade" legislation early-on in his administration. Even if the President does sign the legislation, there is no guarantee that the Secretary of Transportation will exercise the authority to make complying with the EU-ETS regime illegal or that a determination will be made by the Secretary before the March 31, 2013 deadline to purchase and surrender carbon credits. Critics of Senate Bill 1956 charge that making EU-ETS compliance illegal is a radical move that has only been used in extreme situations including legislation designed to prevent U.S. cooperation with apartheid and an anti-Israel boycotts.

It should be noted that if passed, there would be a provision providing for the prohibition of compliance to be reconsidered under certain circumstances such as progress on an alternate plan through the International Civil Aviation Organization, or if the US instigates its own plan addressing aircraft emissions. Though passage of Senate Bill 1956 is encouraging for U.S. aircraft operators looking for relief from onerous ETS requirements, because it is unclear at this juncture when or whether this legislation will result in an actual prohibition on ETS compliance, many U.S. operators continue to comply or prepare to comply with the EU-ETS requirements including maintaining annual emission monitoring plans and reports and opening carbon credit trading accounts.

© 2022 BARNES & THORNBURG LLPNational Law Review, Volume II, Number 270
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About this Author

Joel Bowers Environmental Attorney
Partner

Environmental lawyer Joel Bowers is dedicated to finding creative solutions to even the most difficult enforcement proceedings and complex deals. Joel is experienced in transforming technical analysis into practical legal counsel that takes into account big-picture client objectives.

Joel focuses his practice on environmental compliance and enforcement, including air quality and chemical regulation. He advises on remediation, corrective action and voluntary cleanups, as well as cost recovery defense.

In addition, Joel advises on environmental diligence for commercial and real...

574-237-1287
Clifford G. Maine, Barnes Thornburg Law Firm, Grand Rapids, Corporate Law Attorney
Partner

Clifford G. Maine is chairman of the firm’s Aviation Law Group. Mr. Maine's practice encompasses a wide variety of aviation law practice areas. He serves as general counsel to numerous aviation organizations, including the Southwest Michigan Regional Airport Authority.

Mr. Maine’s aviation clients include some of the largest corporate flight departments in the world. He has structured numerous aviation transactions, including domestic and foreign-based aircraft purchase and sale transactions, like-kind exchanges, timeshare agreements,...

616-742-3944
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