Senate Panel Backs Airline Exemption From EU Carbon Rule

A U.S. Senate panel approved legislation that would exempt Delta Air Lines Inc., American Airlines’ parent AMR Corp. and other carriers from European Union greenhouse-gas limits the companies say would cost them more than $3.1 billion by 2020.

The vote by the Senate Commerce Committee on the measure to give the U.S. Transportation secretary discretion to prohibit compliance could set up a showdown with the EU over the fees it plans to charge airlines for the pollution they produce.

The 27-nation EU decided in 2008 to include flights to and from European airports as part of its carbon program after aircraft emissions in the region doubled in two decades. Transportation Secretary Ray LaHood and Secretary of State Hillary Clinton sent a letter to the EU in December saying the program is “the wrong way” to cut the release of gases scientists tie to climate change.

The Senate legislation isn’t as rigid as the House version, which would prohibit airlines from participating in the EU program.

The airlines have complained the restrictions give Europe’s regulators jurisdiction over global aviation. The plan would let Europe collect fees for an entire flight, even if the time in European airspace is limited, according to Airlines for America, a group that represents the carriers.

The EU’s proposal has drawn opposition from nations including China and Russia, which say Europe should let the United Nations’ International Civil Aviation Organization determine greenhouse-gas limits.

While first payments aren’t due until April 2013, each airline is required to start reporting the liability in its financial reports this year, according to Airlines for America, which also represents Southwest Airlines Co., US Airways Group Inc., FedEx Corp. and United Parcel Service Inc.

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