Anti-emissions trading bill could turn US airlines into 'outlaws'

US airlines could be effectively prevented from flying to Europe under a bill passed by the House of Representatives last night that bans carriers from complying with EU carbon emissions legislation.

The bill is unlikely to pass through the Senate and become law, but it will escalate tensions between the US and EU over plans to incorporate aviation in the bloc's emissions trading scheme.

The US airline industry has been incensed by European plans to charge airlines per tonne of CO2 emitted on flights into and out of the region, and politicians and airlines are pursuing a number of strategies designed to overturn the plans.

A group of carriers has already challenged the decision in the European Court of Justice on the basis that including non-European airlines is a violation of international law.

However, the case, brought by the Air Transport Association of America, American Airlines and United Continental, was dismissed at the start of the month, with Advocate General Juliane Kokott labelling the argument "unconvincing" and "erroneous".

As a result, attention has now turned to near-constant bids to excuse US airlines from the scheme by a bipartisan group of lawmakers in the Transportation Committee, who introduced the EU Emissions Trading Scheme Prohibition Act of 2011 earlier this year.

Despite drawing huge criticism from green campaigners, the bill, which would impose punitive fines on airlines complying with EU law, was passed "overwhelmingly" last night by the Republican-controlled House of Representatives.

"This appropriately named EU scheme is an arbitrary and unjust violation of international law that disadvantages US air carriers, threatens US aviation jobs, and could close down direct travel from many central and western US airports to Europe," committee chairman John Mica, a Republican from Florida, said after the vote.

"Congress and the US government will not support this ill-advised and illegal EU tax scheme."

The bill will now pass to the Senate, where green campaigners are confident that it will be rejected as the Obama administration has no appetite for an international spat with Europe and is unwilling to put airlines in a position where they cannot comply with the US bill without breaching the EU regulations.

Although all parties would prefer a global solution to tackling rising aviation emissions, which currently account for around two to three per cent of the global total, the EU has said that the slow progress of negotiations at the International Civil Aviation Organisation justifies a regional scheme.

While there is little chance the bill will become law, the non-profit Environmental Defense Fund (EDF) warned that it could "ignite a trade war", putting thousands of jobs at risk and leading to increased levels of pollution.

"By barring US-based airlines from complying with applicable law for flights travelling to EU airports, this bill would compel those airlines either to drop their EU routes or become scofflaws," Annie Petsonk, EDF's international counsel, said in a statement.

"‪It's bizarre that Congress would knowingly pass a law that compels US-based airlines to become outlaws when they do business in the EU."

Airlines will come under the EU Emissions Trading Scheme from 1 January 2012, requiring them to hold sufficient carbon allowances to cover their emissions.

Around 85 per cent of the allowances required by airlines will initially be issued for free by the EU, but airlines estimate that purchasing additional allowances to comply with the rules of the scheme will cost over €10bn (£9bn) by the end of the decade, forcing up ticket prices in the process.