United, American, Other Airlines Drop EU Carbon Trading Lawsuit, Urge U.S. to Act

by | Mar 29, 2012

American Airlines, United Continental and association Airlines for America have dropped their lawsuit challenging U.S. airlines’ inclusion in the European Union’s Emissions Trading Scheme, Reuters reports.

Airlines for America, whose members include Delta, Southwest, US Airways, FedEx and UPS, as well as industry partners Airbus, Boeing, Honeywell and Pratt & Whitney, said that opposition to the European law has grown so much that governments should now take the lead, instead of companies pursuing the matter through the courts. The association, formerly named the Air Transportation Association of America, is joining members of Congress in calling for the U.S. to bring the issue to the International Civil Aviation Organization – the U.N. body that oversees the aviation industry worldwide, Platts reports.

On Wednesday, the U.S. House of Representatives’ transportation committee urged representatives from the state and transportation departments to launch a formal challenge to the EU program at the U.N., and in committee, state department officials said that they would leave “nothing off the table.”

The trading program, which came into effect on January 1 this year, requires airlines flying through European airspace to buy carbon permits aimed at offsetting their emissions.

In December, United Continental and American Airlines saw a legal attempt to block the scheme quashed, while UPS threatened to extend its flights in a bid to circumvent European airspace and avoid buying the credits. Earlier this month, Airbus’ parent company has warned that it stands to lose Chinese business if the European Commission ignores protests from airlines about the program.

Meanwhile, India and China have both blocked their national carriers from participating.

Estimates by Thomson Reuters Point Carbon suggest that ETS participation will cost airlines around €1.1 billion ($1.5 billion) in 2012.

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