U.S. airlines say EU emissions plan could cost them billions

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The trade group that represents the nation’s airlines predicts that a new European Union emissions tax could cost U.S. carriers at least $3 billion through 2020.

The Air Transport Assn. has called the European cap-and-trade emissions plan illegal and predicts it will hurt the industry if implemented on U.S.-based airlines next year.

The European Commission launched the cap-and-trade plan in 2005 and has targeted utilities and manufacturers. Starting next year, carbon dioxide emissions from airlines will be capped at 97% of their average 2004-06 levels and 95% in 2013.

Airlines that don’t use all their emissions allowances can sell the excess to other carriers that exceed the limits. The fine for violating the plan is 100 euros, or about $142, for every ton of carbon dioxide that airlines emit above the limit.

The trade group estimates the fines could add up to $3.1 billion for all U.S. carriers between 2012 and 2020.

The airline industry generates about 2% of all U.S. greenhouse gas emissions, according to the Air Transport Assn.

-- Hugo Martin