Inclusion Date of Long-Haul Flight Under the EU-ETS Postponed Until 2017

As mentioned in the March 20, 2014 post, a deal to exempt intercontinental flights from regulation under the European Union's Emissions Trading System (EU-ETS) until the end of 2016 failed in the European Parliament's Environment Committee. Many in the industry thought that this could be an indication of whether the proposed exemption could pass the full EU Parliament. Instead, the Parliament voted 458-120 to postpone the date of application of the EU-ETS to long-haul flights originating or arriving in the EU until 2017. As discussed in an earlier post on October 17, 2013, by 2017 the International Civil Aviation Organization (ICAO) hopes to develop a market-based approach to reduce greenhouse gas emissions from the aviation industry through the use of technology, the adoption of carbon standards, and the utilization of sustainable alternatives to jet fuel.

It appears that this controversial issue is over and in the hands of ICAO, for now. As this issue progresses, please check back to this blog for future posts.

ETS Exemption Deal Rejected by Parliament's Environment Committee

A deal to exempt intercontinental flights from regulation under the European Union’s Emissions Trading System (EU-ETS) until the end of 2016 failed March 19 in the European Parliament’s Environment Committee. This could be an indication of whether the proposed exemption can win enough support when the measure goes before the full EU Parliament early next month. If the measure fails, tensions may be reignited between the EU and major opponents of the inclusion of non-EU airlines, such as the United States, China, Russia, and India.  

As this issues progresses, please check back to this blog for future posts.

Market Based Approach to Reduce Worldwide Greenhouse Gas Emissions Approved by United Nation's Aviation Agency

After two weeks of negotiations, a deal was reached at the International Civil Aviation Organization (ICAO) meeting in Montreal. The assembly of nations agreed to develop a market based approach by 2016 to be implemented in 2020. This resolution encourages countries to create new aircraft technology, adopt carbon dioxide standards, and utilize sustainable alternatives to jet fuel. Further, the measure promotes the engagement of member states in talks about the design of new carbon markets and the implementation of existing programs. This resolution makes air transport the first major industry sector to have a global model in controlling greenhouse gas emissions. The air transport industry currently accounts for 2 percent of global greenhouse gas emissions with projections of higher emissions by 2050.

As discussed in this blog previously, the European Union has been a leader in the effort to reduce greenhouse gas emissions and a driving force behind ICAO’s decision to address emissions on a global scale. On October 16, the European Commission relaxed its own controversial emissions regulations which would have included all flights to, from, and between European Union airports in the EU Emissions Trading System (ETS). A proposed directive by the European Commission to the member states and the European Parliament would require inclusion of only the portions of flights that take place in EU airspace to be included in the ETS. The directive would amend the ETS to include international flights by foreign airlines. Although not as burdensome as the original plan, it is possible that Indian, Chinese, Russian, and Unites States’ based airlines will still refuse to comply.

As this issue progresses, please check back to this blog for future posts.

Special thanks to Sullivan & Worcester’s Emma Spath, Environmental Intern, for assistance in preparing this post.

ICAO Council Compromises on International Aviation Emissions

Last week, the Council of the International Civil Aviation Organization (ICAO), a permanent body comprised of thirty-six ICAO members, met in Montreal to discuss international aviation emissions. This meeting proceeded the September 24 – October 4, 2013 meeting of the full ICAO membership. The Council agreed to a temporary framework that would allow regional emissions trading systems to regulate portions of flights in their airspace.  In contrast to the European Union’s (EU) earlier attempt to regulate the full distance of all flights taking off or landing in the EU, this new agreement would allow regulation only of the flight portion in EU airspace. This agreement fell short of what many had hoped for – the adoption of a global, market-based system to reduce carbon emissions. The Council did agree, however, that such a comprehensive international plan would be secured by 2020. The agreement still must be approved by the full ICAO membership later this month at the Assembly.

In the end, the agreement is a compromise between the EU, which desires stronger emissions standards, and countries such as the United States and China, who have pushed to find a global solution. Hopefully, the Council’s decision will keep the peace until a global management plan is developed.

 

As this issue progresses, please check back to this blog for future posts.

Report Pushes ICAO Towards Market-Based Measures to Address International Aviation Emissions

As we have previously discussed, the 38th Session of the International Civil Aviation Organization (ICAO) Assembly is set for September 24 – October 4, 2013. On the agenda is how and when to address international aviation emissions. In preparation for this meeting and to provide information to policymakers, Manchester Metropolitan University’s Center for Aviation, Transport, and the Environment (CATE) released a report, Mitigating Future Aviation CO2 Emissions: Timing is Everything, on August 27, 2013. This paper concluded that market-based measures, rather than alternatives such as biofuels or efficiencies, are the most cost-effective methods of mitigating emissions and climate impacts. This is because market-based measures, such as carbon emissions trading, have the potential for immediate reductions in emissions while the world must wait for improved technologies. If such market-based measures can be successfully implemented by ICAO, it would avoid reinitiating the battle between the European Union (EU) and other countries over the regulation of all flights originating or landing in the EU by the Emissions Trading System (ETS).

The CATE report can be found here. As this issue progresses, please check back to this blog for future posts.

EPA Has No Mandatory Duty to Find that Lead Emissions from General Aviation Gasoline Cause or Contribute to Air Pollution

Recently, the U.S. District Court for the District of Columbia held in Friends of the Earth v. EPA, D.D.C., No. 12-363, that the Environmental Protection Agency (“EPA”) has no mandatory duty under the Clean Air Act to find that lead emissions from general aviation gasoline cause or contribute to air pollution and endanger human health and the environment. In a previous post, we commented on the question before the Court - whether EPA has a mandatory or discretionary duty to make such a finding. Finding no mandatory duty, Judge Amy Berman Jackson granted the agency’s motion for summary judgment. The Court analyzed the language, structure, and purpose of the statute and the Court found nothing that defined the endangerment determination to be a nondiscretionary EPA duty.

This opinion is open to being appealed to the U.S. Court of Appeals for the District of Columbia. If so, please check back to this blog for updates.

ICAO Considering Global Carbon Emissions Offset Program that Requires Funding Emissions Reducing Projects

Late last month, executives gathered in London for the Aviation Carbon 2013 summit. A few themes developed from this summit.  Among the themes was that  any adopted carbon emissions offset program must show a verifiable difference to the health of the environment, and that any carbon emissions offset program must be simple to join.  Discussion also concentrated on the International Civil Aviation Organization's (“ICAO”) meeting in September 2013.  As we reported earlier in this blog, in November 2012 the European Union suspended the inclusion of the non-EU aircraft industry in the EU Emissions Trading Scheme (“EU-ETS”) for one year until ICAO had an opportunity to develop a global consensus on a plan to reduce emissions.  The September meeting of ICAO's High-Level Group on International Aviation and Climate Change is that opportunity. 

The working group is reviewing at least three market-based mechanisms:  (No. 1) a carbon emissions offset program that requires the funding of projects that reduce carbon emissions; (No. 2) a carbon emissions offset program similar to that proposed in No. 1, but with an additional revenue mechanism, most likely a tax; and (No. 3) a global carbon emissions cap-and-trade system.  It has been reported by news outlets after the Aviation Carbon 2013 summit that the mechanism showing the most promise is No. 1, which will require participants to engage in carbon offset projects such as those that support renewable energy, promote reforestation, avoid deforestation, and boost energy efficiency.  If the working group fails to come to a consensus, then we could see a stand-off again between the EU and the non-EU aircraft industry on this controversial measure.

As this issue progresses, please check back to this blog for future posts.

Does EPA Have a Mandatory or Discretionary Duty to Issue an Endangerment Finding for Lead in Aviation Gasoline?

This blog has discussed the regulation of lead in aviation gasoline extensively. Due to the fact that the general aviation industry is the last remaining industry to use leaded fuel, aviation gasoline has become a focal point of discussion at the Environmental Protection Agency, in the general aviation industry, and amongst environmental NGOs. Below are some of the past posts regarding lead in aviation gasoline:

In the pending case, Friends of the Earth v. EPA, D.D.C., No. 12-363, the plaintiff environmental group is pushing EPA to issue a finding that leaded aviation gasoline endangers human health and the environment. Such a finding would require the agency to regulate lead. During a hearing last week on EPA’s motion for summary judgment, Judge Amy Berman Jackson told the parties that the question before the court was whether EPA has a mandatory or discretionary duty to make such a finding. Only if the agency has a mandatory duty could the court compel EPA to take action. Each side points to specific language in the Clean Air Act to argue that the agency does or does not have discretion.

Before this lawsuit, Friends of the Earth filed an administrative petition seeking to compel EPA to make the endangerment finding. Only after EPA denied the petition last year did the environmental group bring the suit. In denying the petition, EPA stated that it needed additional time to study lead emissions in the general aviation industry (petition denial can be found on EPA’s website here). Battling a limited amount of monitoring data to make its evaluation, EPA has been working to develop a robust model that can characterize the amount of lead in the ambient air at and around airports where piston-engine aircraft operate.

The industry is closely following this case and issue. So will this blog. Please check back for updates.

U.S. House of Representatives Approves European Union Emissions Trading Scheme Prohibition Act of 2011

Last week, the United States House of Representatives approved the European Union Emissions Trading Scheme Prohibition Act of 2011 , which would allow aircraft operators to dodge participation in the European Union Emissions Trading Scheme (”EU-ETS”).  The EU’s cap-and-trade policy has been the subject of much discussion and controversy over the last few years because many industry leaders say that the policy is a unilateral tax on the American aircraft industry and a violation of international law. As we posted on this blog before, the U.S. Senate passed a similar bill (S. 1956) in September 2012.  After reconciliation, the bill heads to the desk of President Obama for his signature.

The passage of this bill comes on the heels of a surprising suspension of the ETS provisions for a year. The International Civil Aviation Organization (“ICAO”) recently  announced that it would work to develop a plan to reduce global emissions of the aviation industry, thus prompting the EU to delay the inclusion of the aviation industry until after the ICAO General Assembly meeting in fall 2013. If ICAO fails to resolve the issue or make substantial headway, the recent suspension will only serve to postpone the controversial measure.  

As this issue progresses, please check back to this blog for future posts.

Court Denies Motion to Reconsider March 2012 Ruling that EPA Does Not Have to Determine if Emissions from Aircraft Engines Contribute to Air Pollution

As previously posted in “U.S. District Judge Dismisses Environmental Group's Legal Suit to Force EPA to Regulate Aircraft Engine Emissions,” in March 2012, the United States District Court for the District of Columbia granted the Environmental Protection Agency’s (“EPA”) motion for summary judgment and refused to force the agency to determine if emissions from aircraft and ships “cause or contribute to dangerous air pollution.” On November 2, 2012, the Court denied a motion for reconsideration filed by the plaintiff environmental groups, finding that neither EPA’s proposed Power Plant Rule, 77 Fed. Reg. 22392, nor the Court of Appeal’s decision in Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012) constitute newly discovered evidence. Nor did they demonstrate that the Court’s earlier order was based on an error of law or fact.

The environmental groups had argued that EPA’s newly proposed regulations for power plants could be applied to other sources, such as aircraft, and constituted new evidence that warrants reconsideration by the Court. But, the Court found that the regulations were only proposed and that the agency was still accepting public comment. Further, the Court did not accept the argument that the regulations could be applied to other sources because the proposed regulations relate to an entirely different section of the Clean Air Act. The Court went on to find that these facts, even if considered, would have no influence on the issue in the case: “whether Defendant EPA has unduly delayed in promulgating an endangerment determination for aircraft engines.”

A copy of the order can be found here.

Rep. Henry Waxman Urges FAA to Immediately Address Lead in Aviation Gasoline

As mentioned in an earlier posts, "Industry-Government Task Force Report Sheds Light on Future of Aviation Gasoline," "Environmental Advocacy Group Sues EPA to Regulate Emissions from Aviation Gasoline," and "EPA Sets Its Regulatory Cross Hairs on Lead Aviation Fuel," leaded aviation gasoline, or avgas, remains a concern in the general aviation sector.

A joint industry-government task force is currently tackling the problem, and in a June 2012 report stated that the goal of the task force is to advance unleaded aviation gasoline by 2018.  However, this timetable is too long for some, including Rep. Henry A. Waxman (D. Calif.). In a recent letter to Federal Aviation Administration Acting Administrator, Michael Huerta, Rep. Waxman asked the agency to promote the use of unleaded alternatives for piston engine aircraft that are available today.

In the letter, Rep. Waxman noted the detrimental health effects of lead and that general aviation fuel accounts for half of all lead emissions in the United States. These effects are exacerbated by the fact that many of the smaller aircraft that use leaded gasoline fly out of airports near densely-populated areas.

A press release from Rep. Waxman’s office can be found here. As this issue progresses, please check back to this blog for future posts.

Aviation Groups Support Measures to Halt EU-ETS

Last week, the National Business Aviation Association (“NBAA”) continued its support for increased pressure and direct measures that would curb efforts of the European Union to include the U.S. aviation sector in the EU’s Emissions Trading Scheme (“EU-ETS”). The NBAA joined forces with 18 other aviation-related associations in an advocacy coalition. The coalition sent President Obama a letter requesting that an Article 84 legal action be pursued at the International Civil Aviation Organization (“ICAO”). An Article 84 action refers to a dispute resolution mechanism that all ICAO members agreed to at the 1944 Chicago Convention. NBAA’s press release, including a copy of the letter can be found here. This message may have been in response to an earlier letter sent to President Obama by a coalition of environmental advocacy groups. In August 2012, the environmental coalition requested that the President not “give in” to pressure from the U.S. aviation industry to take legal action.

In another press release last week, the NBAA affirmed its approval of the U.S. Senate’s final passage of Senate bill S. 1956 entitled the “European Union Emissions Trading Scheme Prohibition Act.” As we have posted before, S. 1956 prevents all U.S. aircraft operators from complying with the EU-ETS and authorizes the Department of Transportation and Federal Aviation Administration to negotiate a universal approach to address aircraft emissions. This bill must now be reconciled with an earlier bill (H.R. 2594) that passed the U.S. House of Representatives in October 2011 and be signed by President Obama. Industry leaders believe the bill could be taken up in the House as earlier as the week of November 12, 2012. NBAA’s press release can be found here.

As this issue progresses, please check back to this blog for future posts.

Part 2: Conversation with Brad Mottier, Vice President at GE Business & General Aviation

In part two of our conversation with Brad Mottier, vice president at GE Business & General Aviation, we discuss the newest innovations in GE’s engines. The company is currently developing a new engine with improved environmental benefits and recently had its H80 turboprop engine be type certified by the Federal Aviation Administration. In this post we look at what this certification means for GE Business & General Aviation and what to expect from its newest engine for business aviation, the Passport 20.

Business Aviation Law Blog: I read that a new GE Passport 20 engine is under development for use in business aircraft. In what stage of development is the engine? I also read that the Passport 20 engine will offer improved fuel consumption and environmental benefits, such as reduced nitrous oxide and carbon dioxide emissions and reduced noise pollution. Is this true? 

Brad Mottier: The Passport 20 engine, being developed for large cabin business jets, will set a new standard in performance, efficiency and reliability for business aviation. GE is incorporating key technologies in the Passport engine to bring environmental benefits to operators, including a composite fan case to reduce weight, a front fan blisk for lower cabin noise and vibration and advanced core technologies that will reduce emissions and improve fuel efficiency. GE recently finalized the architectural design of the Passport engine for the Bombardier Global 7000 & 8000 aircraft. With the design frozen, GE now begins the detailed design phase. Component fabrication will begin soon, leading to the start of assembly of the first full engine by year end. The first engine is scheduled to begin testing in 2013.

Business Aviation Law Blog: It was reported that Honda Aircraft Co. has developed a new light business aircraft that will seat two crew members and five to six passengers. Will the HondaJet be powered using GE engines? If so, which model? 

Mottier: The GE Honda Aero Engines’ HF120 engine will power the HondaJet. The HF120 engine features high-flow, wide-chord fan blades, compressor with maximum engine pressure ratio, a reverse flow configuration combustor and advanced material in turbine. GE Honda Aero Engines is a 50/50 joint venture between GE Aviation and Honda Aero, Inc. For more information, visit http://gehonda.com.

Business Aviation Law Blog: The Federal Aviation Administration recently approved type certification for GE Aviation's H80 turboprop engine for commuter aircrafts. Can you tell us more about the H80 engine and what this certification means?

Mottier: GE is excited to bring the H80 engine turboprop to the marketplace, and the certification was the result of the hard efforts of the GE Aviation Business and General Aviation Turboprop team in the Czech Republic along with teams in Evendale and Lynn who worked the design. The H80 turboprop engine combines the elegant, robust design of the M601 engine with GE's 3-D aerodynamic design techniques and advanced materials to create a more powerful, fuel-efficient, durable engine with no recurrent fuel nozzle inspections and no hot section inspection. The H80 engine will feature an extended service life of 3,600 flight-hours or 6,600 cycles between overhauls. It will provide the option of a single- or dual-acting governor, allowing customers to have flexibility in propeller selection. The H80 engine will power the Thrush 510G agricultural aircraft, the Aircraft Industries L410 commuter aircraft, and the Technoavia’s Rysachok twin-engine aircraft. Along with these applications, Smyrna Air Center is working a Supplemental Type Certificate for a H80-powered King Air C90 aircraft. Recently we announced the launch of two new H80 engine derivatives – the H75 and H85 engines—for the agricultural, commuter, utility and business turboprop aircraft segments. You can catch a H80-powered Thrush 510G in flight on this video.

Thank you to Brad Mottier for talking with us. You can find out more about GE Business & General Aviation at http://geaviation.com/bga or on Facebook at http://facebook.com/gebga.

Progress at ICAO Reveals Hope for a New Worldwide Carbon Dioxide Standard

In a major move forward in the effort to establish a worldwide carbon dioxide standard for aircraft, the International Civil Aviation Organization’s (“ICAO”) Committee on Aviation Environmental Protection unanimously approved a metric to characterize CO2 emissions, taking into consideration such influences as fuselage geometry, maximum take-off weight, and fuel-burn performance.  With this step behind the Committee, work will begin on creating a new CO2 aircraft standard, including defining the certification procedures and determining the standard’s scope of applicability.  ICAO’s press release can be found here.

Industry leaders call this a major milestone, but agree that this is merely one step towards establishing an international standard by the end of 2013.  This announcement, however, has done little to temper the European Union’s plan to implement the Emissions Trading Scheme (“EU-ETS”).  It has though given support to those countries that oppose inclusion in the EU-ETS.  The United States Departments of State and Transportation hosted 16 countries from July 31 to August 1, 2012 to discuss alternatives to the controversial scheme. Countries participating were Australia, Brazil, Canada, Chile, China, Colombia, India, Japan, Korea, Mexico, Nigeria, Russia, Saudi Arabia, Singapore, South Africa, and the United Arab Emirates.

All attending countries favor national and regional measures to reduce aviation emissions; however, each has stated their opposition to the EU plan, and would rather see a global, sector-led standard created through ICAO. Representatives from the European Commission were not invited according to a spokeswoman for the Commission, but were briefed on the meeting’s results. This meeting follows a February gathering in Moscow of 20 countries which agreed on retaliatory measures if the EU-ETS’s inclusion of non-EU aircraft continues moving ahead.

At the same time of this meeting, the Senate Commerce, Science, and Transportation Committee unanimously approved a bill to bar the EU from extending its carbon caps to the U.S. airline industry. This approval moves the bill closer to a Senate floor vote after the August recess. A similar bill was passed by the House of Representatives in October 2011 and is described in more detail here. The passage of this bill follows the sub-committee hearing described earlier in this blog. EU officials immediately criticized the bill.

EBAA, CBAA and IBAC Call on the International Business Aviation Community to Help Develop an Alternative Measure to the EU-ETS

Several national business aviation associations and the International Business Aviation Council (“IBAC”) reiterated their opposition last month to emissions regulation under the European Union’s Emissions Trading System (“EU-ETS”).

The announcement came in Toronto, Canada at CBAA 2012, the annual convention hosted by the Canadian Business Aviation Association (“CBAA”).  According to the joint press release, Fabio Gamba, CEO of the European Business Aviation Association (“EBAA”), told the conference participants that he shared their frustrations over the EU-ETS’s flaws.  Gamba emphasized that in addition to the distinction made between commercial and non-commercial operators and how the de minimis rule is applied, the EU-ETS focused more on punishing those who emit CO2, rather than encouraging them to find avenues to improve their carbon footprint.

“There’s no denying that aviation emissions will grow over time despite the sector’s constant technological and operational improvements and its formal long-term commitment to reducing the impact of aviation on the environment,” Gamba said at the event. “And although business aviation emits less than 2% of air transport emissions – and less than .04% of total man made emissions – we confirm our sector’s role in helping to combat global warming.”

Despite the general consensus that the system would hurt the business aviation industry, Don Spruston, Director General of IBAC, cautioned that too much resistance may lead to retaliation, which would hurt all parties involved.  This statement came on the heels of China announcing its plan to possibly impound European aircraft as a penalty for China’s three national airlines being reprimanded for not submitting greenhouse gas emissions data to the EU.

Instead, the EBAA, CBAA and IBAC called on the rest of the international business aviation community to join the worldwide effort to develop a new global agreement under the leadership of the International Civil Aviation Organization. As mentioned in earlier posts, this viewpoint appears to be in line with the position of the National Business Aviation Association, as well as many commercial aviation industry groups.

Special thanks to Sullivan & Worcester’s Joshua Walfish, Marketing Intern, for assistance in preparing this post.

EPA Brings NOx Emissions Regulations for Commercial and Non-Commercial Civilian Aircraft Engines in Line with ICAO Standards

Late last month, EPA adopted new nitrogen oxide (“NOx”) emissions standards for aircraft engines that align with international requirements previously promulgated by the International Civil Aviation Organization (“ICAO”). According to the Final Rule [77 Fed. Reg. 36342], the regulations reduce NOx emissions from taxiing, take off, landing, idling, and flight for certain gas turbofan engines used by commercial and non-commercial civilian aircraft with maximum rated thrusts greater than 26.7 kilonewtons (“kN”). Although engines with this rating are primarily used in the commercial sector, the rule makes clear that the standards also apply to non-commercial civilian aircraft engines that are required to obtain airworthiness certificates.

Prior to this rule, gaseous emissions regulations were limited to commercial civilian aircraft engines. The inclusion of non-commercial aircraft engines, according to the Final Rule, was because ICAO’s standards and recommendations already apply to both sectors. This rule, therefore, brings EPA’s regulations into full conformance. Further, manufacturers already certify the engines to the international standards, thus “this provision simply incorporates the status quo.” Finally, the inclusion was necessary because of the physical and operational similarities between the aircraft engines used in the two sectors.

To facilitate an orderly transition, EPA adopted two tiers of emissions standards: (1) Tier 6 (or CAEP/6) standards and (2) stricter Tier 8 (or CAEP/8) standards. Implementation of the Tier 6 standards will result in a 12 percent reduction in emissions levels below the current Tier 4 standards. The Tier 8 standards will result in a 15 percent reduction in emissions levels below the Tier 6 standards. The applicability of the tiers depends on the manufacturing date and certification date of the engine model.   

  • Tier 6 Standards: If the engine model is manufactured and certified before July 18, 2012, the engine model would not be required to comply with the Tier 6 standards until December 31, 2012. Any engine model certified on or after July 18, 2012, must comply by December 31, 2013.
  • Tier 8 Standards: Any engine model certified on or after January 1, 2014, must comply with the Tier 8 standards. 

The Final Rule also includes several changes that affect all aircraft gas turbine engines subject to current emission requirements. The Final Rule:

  • clarifies when a design variation of a new engine causes the latest version to become different enough from its previously certified parent engine that it must conform to the most current emissions standards;
  • amends the emission measurement procedures to reflect current certification practices; and
  • requires covered gas turbine and turboprop engine manufacturers to report emissions data to EPA to conduct analysis and define appropriate public policy.

According to EPA, this rule “is not an economically significant regulatory action” and “will impose no real additional burden on engine manufacturers” because aircraft turbofan engines are already designed and built to ICAO standards in order to be sold and operated worldwide. Overall, only ten engine manufacturers will be affected by this rule. EPA estimates that the total annual burden of compliance is approximately ten hours and $365 per manufacturer. 

This is not the first time that EPA has revised its standards for aviation emissions to conform to ICAO guidelines, nor will it be the last. As covered extensively in several previous posts, if ICAO develops universal and comprehensive standards for aviation greenhouse gas emissions, EPA may soon revise its regulations to follow suit.  

More information on the new NOx standards can be found on EPA’s website.

Special thanks to Sullivan & Worcester’s Noah Tomares, Environmental and Marketing Intern, for assistance in preparing this post.

Industry-Government Task Force Report Sheds Light on Future of Aviation Gasoline

As mentioned in earlier posts, “Environmental Advocacy Group Sues EPA to Regulate Emissions from Aviation Gasoline” and “EPA Sets Its Regulatory Cross Hairs on Leaded Aviation Fuel,” leaded aviation gasoline, or avgas, is a concern in the general aviation industry. Lately, the issue has garnered more attention as the Environmental Protection Agency (“EPA”) examines possible regulation of lead emissions from aircrafts.  

Not much progress has been made to develop an alternative fuel to 100 octane low-lead (100LL), mainly due to the ready availability of the current fuel, a lack of regulation, and the technical infeasibility of developing a single “drop-in” alternative fuel that can be deployed across the entire industry. Aviation industry leaders realize, however, that steps forward must be taken if the industry wants to avoid future regulation.

Last week, the Unleaded Avgas Transition Aviation Rulemaking Committee (“UAT ARC”) released a final report detailing how to incentivize and facilitate the certification of an alternative aviation fuel to 100LL. Formed in 2011 by the Federal Aviation Administration (“FAA”); the ARC is a joint industry-government task force with a goal of advancing unleaded aviation gasoline by 2018. Members on the industry side include the Aircraft Owners and Pilots Association (“AOPA”), the Experimental Aircraft Association (“EAA”), the General Aviation Manufacturers Association (“GAMA”), the National Air Transportation Association (“NATA”), and the National Business Aviation Association (“NBAA”). The government stakeholders are FAA and EPA.

Collaboratively, this task force has worked to ensure the continued availability of aviation gasoline in an unleaded form. According to FAA’s press release, the ARC’s report outlines five key recommendations. These are:

  1. Implement a fuel development roadmap for avgas readiness levels that identifies milestones in the aviation gasoline development process.
  2. Establish centralized testing of candidate unleaded fuels which would generate standardized qualification and certification data.
  3. Establish a solicitation and selection process for candidate unleaded aviation gasolines for the centralized testing program.
  4. Establish a centralized certification office to support unleaded aviation gasoline projects.
  5. Establish a collaborative industry- government initiative called the Piston Aviation Fuels Initiative (PAFI) to implement the UAT ARC recommendations to facilitate the development and deployment of an unleaded avgas with the least impact on the existing piston-engine aircraft fleet.

More details concerning these primary recommendations can be found in the final report, which can be found on FAA’s website. Press releases discussing the report were also posted by AOPA and NBAA

The participation of EPA is essential to the success of this framework. EPA has been pressured with litigation to promulgate regulations to eliminate or significantly reduce lead emissions. If FAA and industry groups can address the issues and recommendations outlined in the final report in a timely fashion and in a manner that is amenable to both the environment and industry, EPA will not have to take steps to regulate.

As this issue progresses, please check back to this blog for future posts.

ICAO's Release of a Draft Market-Based Emissions Reduction Measure has been Delayed until March 2013

The International Civil Aviation Organization (“ICAO”) aims to have a draft global plan to reduce aviation emissions completed by March 2013, not by the end of 2012 as previously planned. ICAO is considering four market-based alternatives. One is mandatory offsetting of emissions from airlines, while another is mandatory offsetting with some revenue-generating mechanism. There are also two cap-and-trade systems under discussion; one would allow all aviation emissions to be traded, while the other would only allow increases and decreases from a predetermined baseline to be traded. Secretary-General Raymond Benjamin said he hopes to finalize one plan next March 2013, with the ultimate goal of presenting it at ICAO’s triennial meeting in the fall of 2013. (Reuters)

This delay only exacerbates the current deadlock between the European Union and the non-EU countries that stiffly oppose inclusion in the EU emissions trading system. It is imperative that ICAO stick to this timetable, or it may risk an escalation of the conflict and a possible trade war.

Special thanks to Sullivan & Worcester’s Joshua Walfish, Marketing Intern, for assistance in preparing this post.

Mr. Edward M. Bolen, NBAA, Emphasizes the Disparate Treatment of the General and Business Aviation Sector under the EU-ETS

As discussed in earlier posts, “House Passes European Union Emissions Trading Scheme Prohibition Act,” and “Coalition Lobbies Senate on Passage of EU-ETS Prohibition Bill,” the U.S. Congress is actively pushing to protect the U.S. aviation sector from being regulated under the European Union Emissions Trading Scheme (“EU-ETS”).  

The House convincingly passed House Bill H.R. 2594 in October 2011, and similar legislation was introduced in the Senate in December 2011 by Senator John Thune (R- S.D.) and co-sponsored by Democratic Senator Claire McCaskill (Mo.). During a hearing on June 6, 2012, the Senate Commerce, Science, and Transportation Committee again addressed the issue of U.S. aviation industry inclusion in the EU-ETS and its potential impact on operations. 

One of the panel witnesses, Mr. Edward M. Bolen, President and CEO of the National Business Aviation Association, underscored the fatal flaws of the EU-ETS, pointing to the unfair and discriminatory handling of the U.S. general and business aviation sector. Although the EU-ETS is unfair to the U.S. commercial aviation sector, it is even more unjust to non-commercial aviation. To illustrate the inequality, Mr. Bolen provided as an example that an airline may fly from Chile to Europe with two scheduled flights a day using a commercial aircraft, yet remain exempt from regulation as a “small emitter.” However, a U.S. based non-commercial flight that flies to Europe once a year is not provided the same exemption. As Mr. Bolen stressed at the 11th Annual Aviation Summit in April 2012, registering under the EU-ETS is an expensive process -- a burden that is felt disproportionately by smaller operations that lack administrative resources. According to Mr. Bolen, many of the companies that are members of the NBAA have already spent thousands of dollars and hours registering and complying with the EU-ETS. More on this topic is available on the NBAA’s press release, including Mr. Bolen’s written statement to the Committee. 

Transportation Secretary Ray LaHood offered the administration’s point of view. Although Secretary La Hood refused to take a position on the pending legislation, he reminded the Committee that he and Secretary of State Hillary Clinton have made their opposition clear in multiple meetings with EU officials. According to Secretary LaHood, if the EU continues to move forward, the U.S. would consider direct action by submitting a formal Article 84 challenge under the Chicago Convention aviation treaty.

Panel witnesses Captain Sean Cassidy, First Vice President of the Air Line Pilots Association, International and Ms. Nancy Young, Vice President of Environmental Affairs for Airlines for America, along with several Senate Committee members, delivered further comments in opposition to the EU-ETS. The general themes of those comments were that: (1) the EU-ETS violates U.S. sovereignty; (2) there is no regulatory guarantee that any collected fees would be used to reduce aviation emissions; (3) the top priority at the Federal Aviation Administration is the implementation of NextGen technology, which will improve aircraft efficiency and reduce emissions, thus calling into question the need for the EU-ETS; (4) this regulation will most likely be viewed by the American public as a tax imposed by a foreign entity; and (5) this issue is more properly addressed using a global agreement through the International Civil Aviation Organization (“ICAO”).

Specifically, Ms. Young noted that the commercial aviation sector estimates that compliance will cost $3.1 billion from 2012 – 2020. According to Ms. Young, this translates into less money to invest in sustainable fuels and other fuel efficient technology.

In support of the EU-ETS, Mr. Jos Delbeke, Director General of the European Commission, Directorate-General for Climate Action, emphasized that the EU-ETS is not a tax, and that the EU would be willing to modify the scheme if other nations take specific action to curb aviation emissions or if ICAO develops a global agreement. Mr. Delbeke further stated that 90% of the emissions credits will be free and called into question the U.S. aviation industry’s estimates regarding the cost of compliance. Ms. Annie Petsonk, International Counsel, Climate & Air, Environmental Defense Fund stated that the EU-ETS was a reasonable measure, could help grow American jobs, and doesn’t intrude on U.S. sovereignty any more than U.S. fees intrude on the sovereignty of other nations. Ms. Petsonk also highlighted the small cost to travelers, $6 per round trip ticket, and stated that some EU member nations, such as Germany, have mandated that any collected money must be used for emissions reductions.

Senator John Kerry (D-Mass.) noted that the EU only took this step after a global solution could not be reached by ICAO, a point that was also made by Mr. Delbeke. Senator Kerry remarked that the U.S. has “dragged its feet” regarding regulating greenhouse gas emissions. He also observed that this issue signals just the beginning of the tough negotiations the international community will face in the future as it addresses such other global problems as water, food, energy and refugees.  

At this stage, it is difficult to see a way through. According to Mr. Delbeke’s statements, the EU is not contemplating suspending the EU-ETS. That leaves only a U.S. response. Senator Thune believes that he can garner enough support for his legislation, which will essentially hold harmless U.S. airlines that do not comply. Further, it is clear that the administration does not agree with the carbon cap measure. Unless ICAO can develop a solution quickly that is acceptable to the EU, the U.S. may be compelled to challenge the EU-ETS under the Chicago Convention treaty. In the meantime, the commercial and non-commercial aviation sector is stuck in limbo, still required to comply, but wondering for how long.     

The hearing has been archived on the Committee’s website.    

As this issue progresses, please check back to this blog for future posts.

Chinese and Indian Airlines Miss Deadline for Submitting 2011 Greenhouse Gas Emissions Data; However, Despite Objections US Airlines Comply

It was recently reported that eight Chinese and two Indian airlines failed to provide data on their 2011 greenhouse gas emissions, as required under the European Union Emissions Trading Scheme (“EU-ETS”). Both governments had previously signaled that their respective airlines would not comply with this requirement. As mentioned before in an earlier post, China and India are just two of many countries that are fighting inclusion in the EU-ETS, however, airlines from other objecting countries such as the United States, Russia and Brazil did provide timely emissions data.

According to Connie Hedegaard, the EU’s Commissioner on Climate Change, the ten noncompliant Chinese and Indian airlines account for less than 1% of the more than 1,200 airlines that are subject to the trading scheme. EU authorities have given the noncompliant airlines a fast-approaching deadline of mid-June to submit their emissions data.

It is important to note that the EU Commission has provided non-EU airlines a way out. Non-EU airlines can be exempted from the scheme if their home countries adopt “equivalent measures” to reduce aviation greenhouse gas emissions. China has taken a recent step that may fit this exclusion. Chinese airlines levy fees on passengers for airport construction; recently however, these fees have been repurposed into a general civil aviation development fund to be used on energy conservation and emissions reduction schemes, along with other non-emissions related projects. According to Hedegaard, the EU delegation in Beijing is reviewing this move to determine whether it qualifies as an equivalent measure.

If it does qualify, will other countries follow China and adopt similar “equivalent measures”? Or, will taking advantage of the “equivalent measures” exclusion be seen as accepting regulation by the EU? Objecting countries have consistently stated that their position is more about national sovereignty than environmental protection. 

As this issue progresses, please check back to this blog for future posts.

Congressional Budget Decision Threatens Growth of Aviation Biofuels Market

The Department of Defense has determined that reducing the military’s dependence on foreign petroleum products is critically important to national security. As mentioned in an earlier post, to meet this target, the United States Navy procured the largest order of algae and animal oil fat based biofuel in the federal government’s history, which the Navy planned to use to power its newly created “Green Strike Group.” Now, a congressional budget decision threatens that goal.

The House of Representatives passed the 2013 National Defense Authorization Act last month, which among other provisions, prevents the Department of Defense from purchasing alternative biofuels that are more expensive than traditional fossil fuels. A draft of the Senate’s version of the Act was recently released by the Armed Services Committee with the same prohibition.

Industry leaders had hoped that the Navy’s substantial procurement of biofuel would enable the new fuel source to be proven on a commercial scale, thus increasing the pace of research and development, expanding the market, and eventually reducing the fuel’s overall cost. These hopes may be dashed, however, if this act becomes law. Without large-scale military investment in the market, this new technology’s future use in other industries - such as the civilian business and commercial aviation industry – has become more uncertain.     

Special thanks to Sullivan & Worcester’s Noah Tomares, Environmental and Marketing Intern, for assistance in preparing this post.

Electric Aircrafts May Soon be the Standard in the Business Aviation Industry

Volta Volare, a Portland, Oregon based aeronautics company will begin testing a four-person electric aircraft prototype called the GT4 later this year. 

As reported by the company, here are a few interesting aspects of the GT4: 

  • The GT4 runs off a hybrid powertrain similar to that of the Chevrolet Volt and is equipped with both a 900-pound lithium-polymer battery system and a secondary supercharged 1.5 liter gasoline engine that will recharge the battery when the battery approaches 25% full.
  • The GT4 is able to takeoff and travel up to 300 miles on battery power alone. The aircraft carries enough aviation gasoline to extend the flight another 1,000 miles, if required.
  • The GT4 utilizes a canard, or short cross-wing near the nose of the aircraft, and a rear four-blade carbon-composite propeller to “push” the aircraft through the air.

Electric-powered flight is made possible by the tremendous technological advances in the electric vehicle industry. Batteries have become lighter while at the same time able to generate the additional horsepower needed for takeoff and flight.  Further, hybrid technologies have cured one of the greatest criticisms of electric powered flight – that the failure of power during flight is too risky.

The benefits of electric aircraft travel are obvious. The cost of completing a roundtrip journey on battery power would be a fraction of the cost to complete the same journey on aviation gasoline, especially if jet fuel prices remain at record highs. Aircraft emissions and noise pollution will also be reduced significantly. Some industry experts also envision a time when daily commutes will be made by electric flights, thus cutting gasoline-powered vehicle emissions.

The next logical step once these personal electric-powered aircrafts are regularly flying and the technology has further matured is for the aircrafts to become larger. They could soon reach a capacity of 10 to 20 seats for use in the business and corporate sector, and then move to commercial size. Before this happens, however, there are some regulatory hurdles. Currently, Federal Aviation Administration (“FAA”) regulations for light sport aircraft preclude electric-powered aircraft. However, it was announced last month at the CAFE Electric Aircraft Symposium that the FAA had completed its regulatory study and is moving towards rulemaking. The rulemaking process may take several years to compete and implement, thus, although no longer science fiction, you may have to wait a little longer to take your first electric-powered flight.

For more information on the electric aircraft industry, visit the CAFE Foundation’s blog.

Panel Provides Unique Perspectives on EU-ETS's Affect on the Commercial and Non-Commercial Aviation Industry

Last Thursday at the 11th Annual Aviation Summit in Washington, DC, a highly informative expert panel was convened to discuss the ever-so-controversial European Union Emissions Trading Scheme (“EU-ETS”). The panel members were:

  •  Nancy Young, Vice President, Environmental Affairs, Airlines for America;
  • The Honorable Julie Oettinger, Assistant Administrator for Policy, International Affairs and Environment, Federal Aviation Administration;
  • Felix Leinemann, Transport Counselor, Energy, Environment and Nuclear Matters, Delegation of the European Union to the United States; and
  • Edward M. Bolen, President and Chief Executive Officer, National Business Aviation Association.

The panel was moderated by Stephen D. Eule, Vice President for Climate and Technology, U.S. Chamber of Commerce’s Institute for 21st Century Energy, and was preceded by a keynote address from Ambassador Duane Woerth, representative to the Council of the International Civil Aviation Organization (“ICAO”). To better understand the conflict regarding the ETS, Ambassador Woerth explained that the United States and the European Union have had different focuses post-9/11. While the U.S. has been focused on security in the aviation industry, the EU has been more focused on climate and environmental issues, such as reducing emissions and noise pollution.

Although the panel members were at odds on most issues, they did find some common ground. All were of the opinion that most aviation industry leaders agree that emissions should be curbed to reduce their effects on climate. Opinions diverge, however, on the most appropriate vehicle to achieve this goal.  

Mr. Leinemann, the sole representative from the EU, delivered its point of view. From the EU’s perspective, the ETS is a “stepping-stone” to a global approach that already has garnered agreement from the EU’s 30 member states, all of which are willing to integrate their individual trading schemes. It is true that the EU prefers a global solution; however, because the EU views the ETS as a building block, it will not back down from its position that the ETS must move forward. 

Non-EU countries, however, do not see this controversy as one about aircraft greenhouse gas (“GHG”) emissions; rather, they see the dispute as one about national sovereignty and violation of international law. These countries view the ETS as an unilateral tax placed on them by the EU. 

In contrast to the EU’s views, the U.S. Federal Aviation Administration (“FAA”) views the ETS as an impediment to progress, and finds it difficult to reconcile the EU’s support of a global solution and its steadfast position not to repeal the ETS. In defense, Mr. Leinemann drew an analogy to the legislative inter-workings of the U.S. Congress and asked the Summit participants to imagine the difficulty in repealing legislation that enjoyed almost unanimous support in both the European Parliament and the Council of the European Union.

Non-EU countries have other concerns, as well. One concern involves the money that will be collected for the carbon emissions credits. According to Mr. Leinemann, the money will be used for emissions mitigation projects, particularly in developing countries. Ms. Young stated that the money paid to the EU could be used for such projects, but it is not mandatory. In fact, the United Kingdom has publicly stated that it would not “earmark” the funds. Another suggested likely scenario would be that non-EU airlines would have to buy carbon credits on the open market. EU businesses could use the money for energy-efficiency projects, all funded on the “backs” of non-EU airlines. 

When asked what it would take to satisfy the EU, Mr. Leinemann offered that the EU would like to see visible and irreversible progress from ICAO that includes all major emitting countries and sets GHG emission reduction targets that go further than the current ETS. However, non-EU countries take issue with the fact that the EU has not provided any guarantees that it would adopt such a global solution, even if one is worked out by ICAO members.

Mr. Bolen delivered the perspective of the non-commercial aviation industry. In the EU, small emitters are eligible for waivers of ETS requirements; however, there are no such waivers for corporate/business aircrafts. Neither is the non-commercial aviation industry eligible to receive the carbon credits that would be free to other ETS participants. According to Mr. Bolen, business aircrafts would be required to buy credits for each and every flight, thus placing a severe financial strain on the industry. Further, the administrative burden to comply is high. The non-commercial aviation industry does not have the same resources as the commercial industry to track emissions and achieve compliance.

As noted in earlier posts, ICAO is currently working on a global solution; however, no mandatory deadline has been established. One option for a quicker resolution is for the U.S. to file a challenge against the EU under Article 84 of the Chicago Convention for resolution of the dispute according to the ICAO Rules for the Settlement of Differences. According to Ms. Young and Ms. Oettinger, this challenge would effectively turn this into a judicial dispute requiring resolution by ICAO’s permanent Council. Such a situation is not without precedent. In 2000, the U.S. used a similar challenge to protest EU regulations to reduce noise pollution that effectively prevented U.S. aircrafts using “hush kits” to fly in Europe. The EU ultimately repealed this legislation two years later. A “roundtable” on pursuing this option was held on March 28, 2012 before the House aviation subcommittee. According to Ms. Oettinger, at this time, the FAA has not decided whether to bring such a challenge.

Even if ICAO crafts an acceptable global solution that is adopted at the next governing conference in September 2013, and, importantly, the EU finds the solution acceptable and repeals the ETS, the U.S. aviation industry still must bear the administrative burden and cost of tracking, collecting and submitting emissions data for the years 2012 and 2013. Thus, questions would remain regarding who will pay for these administrative costs; and does this make an Article 84 challenge the next logical step?

As this issue progresses, please check back to this blog for future posts.

House Passes European Union Emissions Trading Scheme Prohibition Act

By a consent vote last Thursday, October 20, 2011 and after less than an hour of debate, the United States House of Representatives approved H.R. 2594, the “European Union Emissions Trading Scheme Prohibition Act.” If this bill is passed by the Senate and signed by President Obama, it would force the Department of Transportation to bar U.S. airline operators from complying with the European Union’s Emissions Trading Scheme. As previously posted, the carbon trading scheme has drawn criticism from many countries that question its compliance with international laws and agreements.       

For more details, please see the articles at LAW360 or Bloomberg Business Week. The text of H.R 2594 can be found at the Library of Congress. As this issue progresses, please check back to this blog for future posts. 

Inclusion of Non-European Union Aviation Sector in Emissions Trading System Does Not Violate International Law

As noted in earlier posts, beginning January 1, 2012, the European Union ("EU") plans to include the aviation sector as the second largest industry in its carbon Emissions Trading System ("ETS"). The plan requires all airlines, including airlines operated out of non-EU countries, to use emissions allowances for flights to or from European airports. The international community has spoken out against this measure, with more than 20 countries, including the United States, China, India, Japan, and Russia, signing a declaration vowing to challenge the EU's plan. The Air Transport Association of America, American Airlines, Continental Airlines, and United Airlines took further steps, filing an action in the High Court of Justice of England and Wales arguing that inclusion in the ETS would place them under U.K. authority. Air Transport Ass'n of America v. Secretary of State for Energy and Climate Change, EU Court of Justice, No. C-366/10. The High Court referred the case to the EU Court of Justice for an interpretation of EU law.

On Thursday, October 6, 2011, Advocate General Juliane Kokott wrote an advisory opinion on behalf of the EU Court of Justice finding that the EU's inclusion of the entire airline sector does not infringe on the sovereignty of other states or international agreements, including the U.S.-EU Open Skies Agreement, the Kyoto Protocol, or the Chicago Convention on International Aviation.  Although the opinion is non-binding, the advocate general's opinion normally predicts the final judgment of the case, which is expected in early 2012. For more details, please see the BNA Daily Reporter article or LAW360 article. As this issue progresses, please check back to this blog for future posts. 

EPA Publishes Nitrogen Oxide Emissions Standards for Aircraft Engines in the Federal Register

As a follow-up to our July 14, 2011 post entitled “EPA Proposes Rule to Set Standards for Nitrogen Oxide Emissions From Aircraft Engines,” on July 27, 2011 the Environmental Protection Agency (“EPA”) published the proposed rule setting nitrogen oxide emissions standards for aircraft engines in the Federal Register (76 Fed. Reg. 45,012). The United Nations’ International Civil Aviation Organization (“ICAO”) has previously endorsed the emissions standards and engine manufacturers have begun conforming to the published standards. The EPA believes that the emissions standards will reduce nitrogen oxide emissions at takeoff and landing by 100,000 tons between 2014 and 2030.

The rule’s release date was July 6, 2011 (130 DEN A-7, 7/7/11) and the EPA will accept comments on the proposed rule through September 26, 2011 at Regulations.gov (Docket Number: EPA-HQ-OAR-2010-0687). A public hearing will be held on August 11, 2011 at the Sheraton Chicago O’Hare Airport Hotel in Rosemont, Illinois at 9:30 a.m. As this issue progresses, please check back to this blog for future posts.

 

Special thanks to Sullivan & Worcester's Ari Hoffman, environmental intern, for assisting in the preparation of this post.

Aircraft Greenhouse Gas Emissions and EPA's Endangerment Finding

Special thanks to Sullivan & Worcester's Ari Hoffman, environmental intern, for assisting in the preparation of this post.

As a follow-up to our October 20, 2010 post entitled “Aviation Associations Denied Intervention into Environmental Lawsuit,” on July 5, 2011 the United States District Court for the District of Columbia refused to dismiss a lawsuit seeking to compel the Environmental Protection Agency (“EPA”) to make an endangerment finding for greenhouse gas (“GHG”) emissions from aircraft. (Ctr. for Biological Diversity v. EPA, No. 10-00985 (D.D.C. July 5, 2011). In its ruling, the court stated that the endangerment finding is a “compulsory” and “mandatory” step under Section 231 of the Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq. As you may recall from the earlier post, an endangerment finding is a determination by EPA on whether or not aircraft emissions “significantly contribute to air pollution which may reasonably be anticipated to endanger public health or welfare.”

The Center for Biological Diversity, Center for Food Safety, Friends of the Earth, International Center for Technology Assessment, and Oceana sued EPA in 2010 claiming the agency had failed to respond to their petitions for making an endangerment finding for GHG emissions from aircraft, marine vessels and other non-road engines within the 90-day timeline required by the CAA. 

The court did not order EPA to make the endangerment finding for aircraft GHG emissions because the ruling was in response to a motion to dismiss from EPA and came at a preliminary stage of the litigation. The court did, however, grant in part EPA's motion to dismiss. Judge Henry H. Kennedy Jr. dismissed the portions of the lawsuit involving the endangerment findings for marine vessels and other non-road engines, citing EPA discretion. Despite this ruling, the environmental groups may still continue with their claims that EPA did not adequately respond to their petitions seeking regulation of GHG emissions. As this case progresses, please check back to this blog for future posts.

EPA Proposes Rule to Set Standards for Nitrogen Oxide Emissions From Aircraft Engines

Special thanks to Sullivan & Worcester's Ari Hoffman, environmental intern, for assisting in the preparation of this post.

On July 6, the Environmental Protection Agency (“EPA”) released a proposed rule to set nitrogen oxide (NOx) emissions standards for aircraft engines in line with those already endorsed by the United Nations’ International Civil Aviation Organization (“ICAO”). The Air Transport Association (“ATA”) asserted that it would ensure the rule was in harmony with international standards. The proposed rule would apply to engines with thrusts greater than 26.7 kilonewtons, usually found in commercial passenger and freight aircraft, and would reduce ground-level nitrogen oxide emissions in the United States by 100,000 tons between 2014 and 2030.

The proposed rule would set two stringent emissions tiers for nitrogen oxide, called “Tier 6” and “Tier 8.” Aircraft engine models certified before the effective date of the proposed rule can continue production through December 31, 2012. Engine models certified between the effective date and December 31, 2013 will have to adhere to the Tier 6 emissions standard. The Tier 8 standard will be mandatory for engine models certified on or after January 1, 2014. An equivalent Tier 6 standard became effective internationally in December 2007 and an equivalent Tier 8 standard was recommended to the ICAO in February 2010. The proposed rule would take effect only if the ICAO adopts equivalent standards. If the ICAO adopts different standards, however, EPA will reevaluate accordingly. 

More information on the proposed rule is available on EPA’s website. The proposed rule will be open to public comment for 60 days from the date of publication in the Federal Register. Corporate aircraft owners should take this opportunity to voice concerns and questions in the event that EPA decides to take similar regulatory action on smaller aircraft engines. As this issue progresses, please check back to this blog for future posts.

European Commission Confirms that Aviation Sector will Become Second Largest Industry in Carbon Trading System

Special thanks to Sullivan & Worcester's Van Hilderbrand and Ari Hoffman, environmental intern, for preparing this post.

As a follow-up to our October 20, 2010 post entitled “Climate Change: International Regulation of GHG Emissions From Aircraft,” on June 6, 2011 the European Commission (“EC”) confirmed its earlier March 2011 announcement that the aviation sector will become the second-largest industry in Europe’s carbon Emissions Trading System (“ETS”), behind only power generation. The aviation sector is set to join the market on January 1, 2012, giving airlines an initial 213 million metric ton carbon dioxide (“CO2”) limit in 2012 and a 208.5 million metric ton limit in 2013. European Union (“EU”) climate commissioner, Connie Hedegaard, states the reason for the aviation sector’s inclusion is that “emissions from aviation are growing faster than from any other sector, and all forecasts indicate they will continue to do so under business as usual conditions.” 

The EU’s carbon cap-and-trade system is the world’s largest, allowing businesses that exceed their CO2 allowance levels to buy spare permits from companies that do not reach the limit, or else pay a fine. The fine for exceeding the CO2 allowance level for the aviation sector will be 100 euros for every ton of CO2 emitted above the limit. The EU is presenting the ETS as a “pollution ceiling” not a tax, stating that “airlines have the choice to reduce emissions or buy allowances.” Either way, the cost will be passed on to passengers. Lufthansa airlines has estimated that joining the carbon market will cost 350 million euros annually. The EC has estimated a rise in airline fares within Europe between 1.80 euros and 9 euros. In addition, the airline industry has estimated that the inclusion in the ETS will increase the cost of a roundtrip flight from New York to Brussels by 15 euros.

 

Last month, Steve Ridgway, Chairman of the Association of European Airline and chief executive of Virgin Atlantic along with Tom Enders, chief executive of commercial aircraft manufacturer Airbus warned that including the aviation industry in the emissions trading system would create a trade conflict with the world’s major economic and political players. International Airlines Group (“IAG”) chief executive Willie Walsh has voiced fears that Chinese, American and Russian governments will retaliate if forced to participate in the ETS starting next year. The ETS is already being challenged by the American Air Transport Association (“ATA”) in the European courts and Mr. Walsh fears more conflicts are to come. In response to the latest EC move, the head of the China Air Transport Association (“CATA”), Wei Zhenzhong, said: “I believe we have to take legal action.”

Despite the possible competitive disadvantage created for European airlines and harsh criticism from non-European airlines, the EU’s governing bodies “do not intend to back down” and insist that their plan to include the aviation industry in the ETS is entirely consistent with International Law. As this issue progresses, please check back to this blog for future posts.