February 20, 2014 / 12:02 PM / 6 years ago

Aircraft face fines as deadline looms for EU pollution penalties

* EU negotiators haggle over aviation law enforcement, text

* EU must finalise new law by end of April

* U.S. airlines urge EU to waive penalties

By Barbara Lewis and Valerie Volcovici

BRUSSELS/WASHINGTON, Feb 20 (Reuters) - U.S. airlines have stepped up the pressure on EU countries not to impose fines for alleged breaches of emissions rules in the latest twist to an international row over aircraft pollution.

The warning coincided with a deadline on Thursday for European Union nations to start enforcing rules covering 2012 emissions that could lead to fines of millions of euros against aircraft operators.

U.S. airline association A4A said it was calling on the European Commission, the EU executive, and its member states for clarity that there would be no penalties.

“We and various aviation stakeholders continue to push for a clear statement of relief from the application of the pending deadlines,” it said. The next deadline for operators is the end of March, when they should report data for 2013 emissions.

Such a statement, A4A added, would avoid any need to invoke blocking law agreed by the United States, which it can use to shelter U.S. operators from compliance with the EU rules.

Details of airlines that have not complied for 2012 emissions are sketchy and many of the companies are small private jets on lists of Commission data seen by Reuters.

The European Commission says most airlines, covering 98 percent of emissions, have complied and it relies on member states to punish those that have not. It can take EU nations to court if they fail to enforce EU law.

Thomson Reuters Point Carbon analyst Emil Dimantchev calculated total fines owing could be as much as 39 million euros ($54 million) on the basis of an allowance price of 7.5 euros per tonne on the EU Emissions Trading System (ETS).

By far the biggest fine would fall to Italian airline Blue Panorama, which filed for bankruptcy protection in 2012, adding to the problems for EU nations in trying to enforce their law.

A spokesman for Blue Panorama said the company disputed the “unfair and unreasonable” penalty because the bankruptcy procedure had prevented it from fully complying.

Under EU rules, the penalty is 100 euros per tonne of emissions for which an operator failed to submit carbon allowances, plus they have to buy permits to make up for the shortfall.

Britain says it has agreed to go ahead with enforcement of the law from Feb. 20, but it wants consistency across the European Union.

A spokeswoman for Britain’s Department of Energy and Climate Change said it was continuing to follow “as harmonised an approach as possible to enforcement for 2012 emissions”.

Following a closed-door meeting of member states on the issue, an EU diplomat said on condition of anonymity that there was “a broad consensus among member states and the Commission that EU law needs to be implemented”.


Europe’s major trading partners, including the United States and China, said the EU law that took effect at the start of 2012 was a breach of sovereignty and they threatened retaliation. China blocked orders for Airbus jets in protest at the EU law.

In response to the opposition, the European Union suspended its law for intercontinental flights landing or taking off at EU airports, but the legislation has remained in force for flights within the European Union.

Some European carriers say they are at a disadvantage if long-haul flights do not pay and they support enforcement.

How long the suspension for intercontinental flights will continue is the subject of haggling among member states and EU institutions, which need to agree a new law by the end of April or the original legislation will reapply.

A first round of talks on Tuesday focused on how generous a deadline to set for U.N. negotiations to deliver a global deal on aviation emissions and whether revenues in the EU should be earmarked for environment purposes. Talks resume in March.

The European Union said it suspended its law to give negotiators at the U.N. body the International Civil Aviation Organization (ICAO) the chance to come up with an alternative that the world would accept.

ICAO will review progress in 2016 and some in Europe say they should suspend the European Union’s law only until then.

Britain, for instance, has said the deadline should be 2020, which is when ICAO says a global plan to curb aviation emissions should be in place.

Point Carbon’s Dimantchev said there were political sensitivities, but enforcement was “an important test” for the role of aviation in the EU ETS.

Environmental campaigners say EU states will set a dangerous precedent unless they enforce the law as it stands.

“Power plants owned by foreigners have been complying with the EU ETS for years now. Foreign carriers flying in Europe’s airspace must also comply,” Aoife O’Leary, sustainable aviation officer at non-governmental organisation Transport & Environment, said.

$1 = 0.7272 euros Additional reporting by Ben Garside in London, Tim Hepher in Paris and Daniel Fineren in Dubai; Editing by Dale Hudson

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