The U.S. Senate on Saturday passed a bill that would shield U.S. airlines from having to pay a carbon tax in European flight space, putting pressure on the European Union to back down from its Emissions Trading Scheme.
The ETS requires airlines to buy permits for emissions generated on flights to, from and within the European Union. If an airline uses more than its allowance, it has to buy carbon credits.
The European Union first applied the ETS to utilities and industry. This year's expansion of the cap-and-trade program to airlines triggered opposition from the U.S., China and Russia, among other countries.
The U.S. aviation industry, Department of Transportation and Secretary of State oppose the ETS.
"U.S. airlines should not be subjected to this illegal scheme that amounts to little more than a cash grab for the European Union, as none of the funds collected are required to be used for environmental purposes," said Nicholas Calio, president of U.S. trade group Airlines for America.
"We commend Sens. John Thune (R-S.D.) and Claire McCaskill (D-Mo.) for their leadership in passage of this crucial legislation that recognizes this scheme is a breach of U.S. sovereignty that actually limits our ability to build on our strong environmental record by investing in new and more fuel-efficient aircraft."
Calio noted that the House previously passed a similar bill. Follow Kate Rice on Twitter @krtravelweekly.