VZCZCXRO4833
RR RUEHAG RUEHDF RUEHHM RUEHIK RUEHLN RUEHLZ RUEHMA RUEHPB RUEHPOD
RUEHROV
DE RUEHBS #0609/01 1131529
ZNR UUUUU ZZH
R 221529Z APR 08
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUCNMEU/EU INTEREST COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/WHITE HOUSE WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC

UNCLAS SECTION 01 OF 04 BRUSSELS 000609 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR EEB TRA (BYERLY, WALKLET-TIEGE) OES (NELSON), 
OES/PCI, EUR/ERA 
STATE PASS TO DOT (MSTREET, PGRETCH) 
STATE PASS TO FAA (CBURLESON, EMULLIKIN) 
STATE PASS TO CEQ (CONNAUGHTON, BANKS) 
 
E.O. 12958: N/A 
TAGS: SENV ELTN ECON EPET EUN
SUBJECT: Aviation Emissions: EU Willing to Negotiate, but 
Wants Everyone to Do it Their Way 
 
¶1. (SBU) Summary: EU interlocutors told FAA Assistant 
Administrator Daniel Elwell that the EU proposal to include 
aviation emissions in the EU Emissions Trading Scheme (ETS) 
would probably be enacted by end 2008.  The EU is committed 
to going forward with a unilateral proposal, and many EU 
entities define a third countryQs aviation emissions 
management system as QequivalentQ based on its structure 
(including aviation in an ETS) rather than its results. 
Most EU interlocutors welcomed negotiations but coupled 
this with a Qone size fits allQ mindset.  End Summary. 
 
¶2. (SBU) On March 5-6 Federal Aviation Administration 
Assistant Administrator for Aviation Policy, Planning and 
Environment Daniel Elwell, accompanied by Carl Burleson,FAA 
Environment Director, visited Brussels and met with 
Council, Commission, European Parliament (EP), Member State 
Permanent Representatives and industry representatives  In 
every meeting, Elwell made the following points: 
 
-- The US is results-oriented and has achieved them.  US 
aviation emissions declined 4 percent since 2000 without an 
ETS system or any mandatory measure, due to fleet renewal, 
more efficient aircraft use, ATM and other technological 
improvements, and high fuel prices.  (At the same time, EU- 
15 air carriers saw their emissions rise by 30 percent.) 
 
-- All countries should achieve aviation emissions 
reductions, but choose the measures that work best for 
their markets.  There is no Qone size fits allQ. 
 
-- The next US Administration/Congress will still oppose 
the unilateral application of the EU emissions proposal. 
This has bipartisan support. 
 
-- We are optimistic that the International Civil Aviation 
Organization (ICAO) Group on International Aviation and 
Climate Change, (GIACC Q formed at the Fall ICAO 2007 
Assembly) can create recommendations for ICAO Member States 
to tackle aviation emissions. 
 
-- ICAO has not moved slowly.  For a consensus body with 
large membership (190 contracting states), it has made much 
progress. 
 
-- Our upcoming Stage Two Air Services Agreement 
negotiations may provide a forum for dialogue. 
 
¶3. (SBU) In turn, the common themes we heard from many EU 
interlocutors were: 
 
-- The aviation emissions proposal timeline: The EP will 
not complete a second reading before the summer break; 
therefore the French Presidency will press to get final 
agreement by end 2008. 
 
-- The EU needs to maintain its leadership role in pushing 
for aggressive actions to combat climate change. The 
aviation emissions proposal is a key plank in EU overall 
strategy and EU internal climate change efforts. 
 
-- The EU is not averse to negotiating with international 
partners on how to manage aviation emissions.  But the EU 
wants to be satisfied that a third countryQs system has a 
target for reducing emissions, contains a punitive element 
for non-compliance and has a price signal which forces 
everyone to pay to promote compliance; for many 
interlocutors, this means having aviation in an ETS. 
 
Commission Positions 
-------------------- 
 
¶4. (SBU) Nancy Kontou, Head of Cabinet for Environmental 
Commissioner Dimas believed there were three avenues for 
progress on managing aviation emissions: the EU ETS 
proposal, ICAO and the UNFCCC.  She was hopeful GIACC could 
find a Qmeaningful and bindingQ agreement.  Kontou was 
confident that aviation and maritime emissions would be 
discussed in the UNFCCC context and a timely adoption of an 
 
BRUSSELS 00000609  002 OF 004 
 
 
ICAO-GIACC plan would be a Qpowerful contributionQ to the 
UNFCCC process. 
 
¶5. (SBU) Kontou stressed the EU was not against 
collaboration and an ICAO agreement, but had seen a lack of 
willingness among its bilateral partners to negotiate. 
Kontou said any international agreements would need to have 
a meaningful reduction of emissions and measures which 
guarantee application, in order to be accepted by the 
Member States.  Aspirational targets would not work Q there 
was a great deal of skepticism in Europe.  Kontou indicated 
that the EU would be the arbiter of Qequivalent measuresQ, 
but this could be dropped if an international authority 
emerged.  Developing countries could choose measures in 
line with the Qcommon but differentiatedQ approach of the 
UNFCCC.  For example, China would not face an absolute cut 
in its aviation emissions levels, but rather a reduction in 
their growth rate. 
 
¶6. (SBU) Burleson asked if aviation emissions reductions 
without an ETS (as the US has done) would be considered 
QmeaningfulQ. Kontou said yes, but qualified this by saying 
aviation should be part of a comprehensive approach on 
emissions.  Deputy Head of Cabinet Peter Schellekens added 
that aviation should contribute to promoting emissions 
reductions in other parts of the economy, via participation 
in an ETS.  Burleson rebutted that performance, not 
structure should be the criteria Q if a country can achieve 
meaningful aviation emissions reductions without aviation 
being in an ETS, then that should be acceptable to the EU. 
Kontou countered in turn that the system would need an 
incentive to achieve any target and the ETS was a powerful 
incentive.  Kontou also added that any target must have a 
punitive element for non-compliance, and any international 
solution would need to address this. 
 
¶7. (SBU) Benoit Le Bret Head of Cabinet for Transport 
Commissioner Barrot and Francis Morgan, Cabinet Member, 
indicated that placing aviation in the EU ETS is better 
than any tax tools the Member States would be tempted to 
use.  Le Bret stressed that the EU believes that there must 
be a price signal to industry to aid in pressuring 
manufactures to achieve reductions.  When Elwell asked if 
high fuel prices were a strong signal, Le Bret agreed, but 
noted that if a third countryQs system was something the EU 
could recognize as QequivalentQ, then it was acceptable. 
When asked how the EU planned to handle potential Chinese 
opposition to the emissions proposal, Le Bret indicated he 
hoped the US and the EU could agree on a set of common 
rules to manage aviation emissions and then QimposeQ this 
vision on other third countries. 
 
¶8. (SBU) Daniel Calleja, Air Transport Director, 
Directorate General for Transport (DG TREN) hoped GIACC 
would reach concrete conclusions, in particular that major 
countries would commit to work on specific measures to 
combat aviation emissions.   Calleja also felt there were 
openings for discussion in the context of US-EU Stage Two 
Air Services Agreement negotiations.  He noted that 
amending the EUQs 130 horizontal air agreements to account 
for bilaterally handling emissions between the EU and its 
air partners would not be too difficult.  The key would be 
making sure that DG TREN was legally empowered to head any 
aviation emissions negotiations.  Calleja said there was a 
Qbig riskQ that EU Member States would implement taxes or 
charges unless an EU aviation emissions regime was in 
place.  When asked if DG TREN would be able to enforce 
this, Calleja replied it was possible if the Council and 
Parliament agree. 
 
¶9. (SBU) When the discussion turned to achieving results 
versus structure, Calleja agreed with the US focus on 
results as a way to measure QequivalenceQ, but noted that 
DG Environment would require aviation in an ETS.  Regarding 
NOx aviation emissions, Calleja indicated that DG TREN had 
removed NOx language from the aviation emissions proposal 
in exchange for producing proposed legislation addressing 
NOx emissions by the end of the year.  He warned that 
 
BRUSSELS 00000609  003 OF 004 
 
 
without EU or international action on NOx emissions, there 
was a risk that local EU authorities would take action. 
 
European Parliament (EP) Positions 
---------------------------------- 
 
¶10. (SBU) MEP Peter Liese, rapporteur for the aviation 
emissions proposal, indicated he had limited room to change 
the emissions proposal Q only as needed to secure a 
compromise between the EP and Council drafts.  However the 
EP could change the ETS legislation if there was a 
QpositiveQ international solution.  The EP is also ready to 
negotiate bilateral deals with third countries.  Liese 
expected any US ETS proposal to cover aviation, believed 
that the next US Administration would reach agreement on a 
common US-EU aviation emissions scheme, and that this would 
then lead to a global solution.  When Elwell raised the 
fact that other countries, such as China, opposed 
unilateral inclusion, Liese agreed that China would oppose 
application, but stressed, QtheUS is the leader of the 
opposition. 
 
¶11. (SU) In response to ElwellQs description of 
congressional opposition to the unilateral ETS proposal, 
Liese said the EU did not want to be unilateral, but ICAO 
was clearly not prepared to address global aviation 
emissions.  Europeans had the impression that the US was 
not pushing for an aviation emissions commitment, even at 
Bali.  In LieseQs mind the perfect post 2012 solution would 
be to include aviation in the next UNFCCC agreement.  He 
claimed that discussions on aviation emissions in this 
context Qwere still openQ. (Comment: The Bali meeting 
decided not/not to include aviation emissions in upcoming 
talks, leaving ICAO to continue its deliberations.  End 
Note) 
 
¶12. (SBU) MEP Georg Jarzembowski of the Transport and 
Tourism Committee stated the EU ETS legislation would pass, 
would unilaterally include third countries, and if anyone 
wanted to challenge it, they were welcome to do so.  The EU 
would judge if another stateQs aviation emissions efforts 
were QequivalentQ and if they were not, Qwell, thatQs 
tough.Q  Jarzembowski stated that the airlines had been 
split Q British Airways agreed with the proposal as the 
price of Heathrow expansion.  Air France had agreed to give 
the upcoming French Presidency a win on the environment, 
but, confronted with the true costs, was now reversing its 
position.  Lufthansa, faced with the above, had no recourse 
but to give in. (Comment: We believe LufthansaQs strategy 
is more about letting the United States sink the 
ETS/aviation measure than Qgiving inQ.  End comment) 
Jarzembowski personally defined QequivalentQ as having a 
plan to reduce emissions, never mind the structure. 
Jarzembowski hoped we could work something out in the 
context of the US EU Stage Two Air Services Agreement 
negotiations.  (Note: Jarzembowski is known for his 
frankness. His comments should be taken as respecting us 
enough to tell us the hard truths.  End Note) 
 
¶13. (SBU) Former MEP Jacqueline Foster confirmed that Liese 
does not have any wiggle room in the EP on the emissions 
proposal due to pressure from the Greens and Qpseudo- 
GreensQ of other parties who have embraced combating 
climate change.  Foster noted that EU Commissioners are 
looking for a Qgreen winQ to take to the voters in 2009 
elections.  Part of the pressure to place aviation in the 
ETS is also due to lack of EU jurisdiction over managing 
airport congestion/airport expansion Q it is a Member 
State/local competence.  Thus, the only hope against strong 
national environmental pressures for measures such as 
taxes/charges is to have mitigating EU legislation. 
 
Industry Positions 
------------------ 
 
¶18. (SBU) During a lunch with industry representatives, 
Charlotte Andsager of SAS said that environment is a 
QreligionQ in Europe and trying to argue against it was an 
 
BRUSSELS 00000609  004 OF 004 
 
 
enormous uphill battle for airlines.  BoeingQs 
representative noted that the consultative process with 
industry on NOx emissions would begin in late April, early 
May, with the hope to have a communiqu ready by the end of 
the year.  One major problem Boeing foresaw was the linking 
of slot allocation at airports to NOx emissions.  Lack of 
progress on the European Single Sky due to Member State ATM 
labor concerns and local aviation taxes/charges for 
environmental issues were also discussed.   Burleson noted 
that the latter issue, as well as local noise restrictions, 
would probably form part of State Two Air Services 
Agreement negotiations. 
 
Member State Perm Rep Positions 
------------------------------- 
 
¶19. (SBU) Elwell and Burleson also met with a number of 
different Member State Deputy Permanent Representatives 
(DPMQs).  Many repeated assertions made by Commission and 
EP interlocutors, but also contributed some different 
ideas.  Slovene DPM Tovsak admitted the EU needed to get 
international buy-in to achieve its climate change goals 
and therefore needed to consult with other countries. 
Tovsak was pleasantly shocked at US results on lowering 
aviation emissions, but many on the EU side believed built- 
in incentives and market based measures were also required. 
Hungarian DPM Vargha indicated that while smaller and newer 
EU Member States support their national carriers and want 
to rapidly develop their air markets, they also supported 
the EU climate change goals.  The EU ETS was cheaper and 
more cost effective than other measures. 
 
¶20. (SBU) Finnish DPM Vaskunlahti said that as long as the 
aviation proposal remains open for debate, there is the 
possibility to insert language along the lines of Qwithout 
prejudice to international agreementsQ which would cover 
any negotiations underway or predicted.  German DPM Witt 
noted that EU ETS revision/expansion draft legislation 
would also impact the aviation emissions debate Q this is 
expected to be a painful process and Member States had 
already raised a number of complaints about ETS expansion 
in the March 3 MinisterQs discussion.  Witt also indicated 
that the larger issue is an EU consensus that other nations 
have to contribute to combating climate change, threshold 
countries such as China and India must also do their part, 
and the only way to gain acceptance of QpainfulQ internal 
EU climate change measures was to ensure that other 
countries were also contributing.   Witt stressed this 
would not be solved by lawyers, but rather by politicians. 
 
¶21. (SBU) Comment: With the first reading over, and other 
EU climate change legislation on the docket, the EU 
position on aviation emissions appears to have become 
fixed, as it looks to its overarching international climate 
change goals.  There is significant political momentum 
across the EU institutions to put in place this measure, as 
evidence of the EUQs commitment to combat climate change, 
with little regard for whether it will yield results. It is 
also clear that the EU is wedded to QequivalenceQ in 
negotiating managing aviation emissions with third 
countries, and see equivalence as a third country having an 
aviation emissions management system along EU lines, 
including aviation in an ETS.  End Comment. 
 
FAA has cleared this cable.