Eco-Aviation Channel

US airlines could face domestic carbon tax

By Perry Flint
Eco-Aviation Today, April 10, 2009, p.4

US airlines would be required to pay a carbon tax on their fuel purchases under the Clean Energy and Security Act of 2009, a bill introduced at the end of March by Reps. Henry Waxman (D-Calif.), who chairs the influential House Energy and Commerce Committee, and Edward Markey (D-Mass.), chairman of the energy and environment subcommittee.

The proposal is a 648-page "discussion draft" that responds to President Barack Obama's request to Congress for legislation that places a market-based cap on carbon pollution. It treats aviation in the same manner as last year's failed Lieberman-Warner Climate Security Act, according to Air Transport Assn. VP-Environmental Affairs Nancy Young.

"It would require fuel producers to make sure that any fuel they sell to us is already covered by greenhouse gas emissions allowances," she tells Eco-Aviation Today. The cost of these allowances would be included in the price of kerojet. Last year, ATA estimated that if Lieberman-Warner became law it would add $5 billion in expenses for airlines in 2012, rising to $10 billion by 2020. Young says the numbers are the same for the Waxman-Markey proposal.

The bill also directs the Environmental Protection Agency to "promulgate standards applicable to emissions of greenhouse gases from new aircraft and new engines used in aircraft by Dec. 31, 2012." Young notes that EPA already regulates aviation carbon monoxide, smoke and NOx emissions, so "that sort of regulatory approach is something that we are very familiar with." However, ATA is concerned that airlines will be hit with a double whammy: A carbon tax that takes money out of their pockets and new emissions standards that raise the price of aircraft and engines.

The third area of concern is that the bill establishes "a low carbon fuel standard for all transportation fuels." But it leaves it up to fuel producers to decide where to invest, "so if they decide it is easier to get carbon reductions in gasoline than in jet fuel they may favor doing the easier thing to meet their mandate," she says.

Although the bill presents challenges for airlines, she points out that it was issued "as a discussion draft and that's an important thing to frame what's going on. . .because you don't issue a discussion draft if you don't anticipate there will be changes and that there will be new ideas and other things." ATA wants "to work positively with Congress to help shape this bill."

In a related development, US EPA sent a so-called "endangerment finding" to the White House on March 20 stating that it has determined that CO2 poses a hazard to US citizens and seeking authority to regulate and limit CO2 emissions under the Clean Air Act. The finding was rejected by the Bush administration but may find a warmer reception in the Obama administration.

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