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The Battle Over Emissions and the Rise of Aviation Biofuels

U.S. and EU square off in court this month over regulation of aviation greenhouse gas emissions.  A look at competing schemes, sovereignty, and the regulatory drivers behind aviation biofuels.

With ASTM certification for Bio-SPK aviation biofuels now cleared, a major obstacle to the use of biomass-derived jet fuel has been removed.  Although premature to expect a rapid scale-up of commercially-available fuel, airlines are looking to integrate fuel derived from feedstocks like Camelina, Jatropha, algae, and waste to lower operating costs, reduce emissions, and support industry growth.

Aviation’s contribution to global emissions is not alarming, but scientists argue that the effects are more pernicious since the bulk of those emissions occur at higher altitudes.  The United Nations Intergovernmental Panel on Climate Change measures the aviation industry’s contribution to greenhouse gas (GHG) emissions at just over 2% of all global GHG emissions.  That figure is expected to increase to at least 3% by 2050.

While mitigating carbon emissions is good for aviation’s public image, it is the financial implications of doing business in a carbon and oil constrained world that is driving the shift towards aviation biofuels, especially among commercial and military stakeholders.  Greenhouse gas regulations are incentivizing the switch to aviation biofuels.

These key drivers are examined briefly below:

EU’s Aviation Amendments

Despite international efforts to constrain carbon emissions through Kyoto and subsequent multilateral COPs, the EU is leading the way with regulating aviation emissions.  The EU tacked on “Aviation Amendments” to its GHG emissions trading system (ETS) in place since 2005, which is set to be binding on the the airline industry beginning in 2012.

Under the EU’s Amendments, carbon dioxide emissions from aviation will be capped at the average 2004/06 levels for all of the member-nations of the EU.  Aircraft operators that fly into and out of EU airports will be required to participate in the ETS, and surrender emissions allowances equivalent to the GHG emissions associated with their flights into and out of EU airports, regardless of whether the emissions occurred inside or outside of EU airspace.  Earlier in 2009, the UK had started letting its Environment Agency fine airlines that do not adhere to the EU’s emissions standards.

The International Air Transport Association (IATA) and the Air Transport Association of America (ATA) view the ETS as a violation of the Chicago Convention governing international air travel and have called for a global approach to aircraft emissions reduction.  ATA also argues that the scheme breaches U.S. sovereignty, and is in violation of a bilateral Air Transport Agreement reached between the United States and the EU in April 2007 as well as the Kyoto Protocol.  The Obama Administration may consider options to fight the applicability of the EU ETS laws on U.S. airlines, citing potential violations of international law.  According to Reuters, “China crticized the scheme earlier this month, adding to fears of a brewing trade war.”  A court battle between the U.S. and EU over the regulation of aviation emissions commenced earlier this month.

A study published by a group of 6 associations that represent airlines based in Europe found that carriers will have to spend over $60 billion between 2011 and 2022 in order to buy credits from fuel-efficient industries to meet their emissions quotas.  Unless legal challenges from industry groups like IATA and ATA can remove the applicability of costs on U.S. airlines landing in Europe, the Amendments will regulate EU firms and non-EU firms alike.

EPA Given Green Light to Regulate Aviation Emissions?

Unlike the EU, the U.S. has struggled to advance GHG emissions regulations to date.  Cap-and-trade draft bills are blowing around the halls of Congress like tumbleweeds and several suits have challenged the EPA’s efforts to regulate carbon.  But the EPA has two key tools at its disposal to mitigate GHG emissions, and both have a direct impact on the use of biofuels for aviation.

First, RFS2 measures the lifecycle carbon emissions of fuel pathways, setting up a system which favors biofuels that are less carbon-intensive.

Second, and recently ruled as applicable to the aviation sector, the Clean Air Act may grant the Agency the authority to regulate GHG emissions from aircraft.  The Clean Air Act grants the EPA broad authority to regulate emissions from sources that harm human health and welfare.  In 2009, the EPA established a new pollutant, “Well Mixed Greenhouse Gases” consisting of six Kyoto gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride).  The new category groups the gases into one regulatory unit and gives the Agency the green light to regulate sources of GHG emissions under the Clean Air Act.  While aviation emissions include well-mixed greenhouse gases, the EPA has not outlined its intent to regulate tailpipe emissions.

Meanwhile, last week, a U.S. District Court judge ruled that the EPA must consider aircraft emissions when drafting rules to adopt the NOx emission standards approved by the United Nations’ International Civil Aviation Organization (ICAO).  While subtle, the ruling could potentially open the door for the EPA to regulate aviation GHGs under the Clean Air Act.

Sarah Burt, an Earthjustice attorney, notes:

The court has made clear that the EPA has a mandatory obligation to conduct an endangerment finding for aviation emissions.  Although the court determined the EPA has greater discretion regarding marine and nonroad emissions, Judge Kennedy emphasized that this discretion is not unfettered. We will continue to work to compel the EPA to act as soon as possible on marine and nonroad sources of pollution as well as aircraft emissions.

It will be some time before the EPA can move on emission regulations given the pace of its rulemaking procedures.  Even so, the court’s decision in the EU this month will likely dictate the direction of aviation biofuels policy for the foreseeable future.

Image: Flickr/HarshPatel;Photographer

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