PORTUGUESE TELL A/S STEINBERG THAT EU WILL NOT ACT

C O N F I D E N T I A L SECTION 01 OF 02 LISBON 001745

SIPDIS

SIPDIS

FOR EUR/WE - KEVIN OPSTRUP, FOR USEU - KATHLEEN MORENSKI,
FOR FAA BRUSSELS - KURT EDWARDS

E.O. 12958: DECL: 07/01/2017
TAGS: EAIR ETRD SENV ECON PO EUN
SUBJECT: PORTUGUESE TELL A/S STEINBERG THAT EU WILL NOT ACT
UNILATERALLY ON AVIATION EMISSIONS

REF: STATE 83246

Classified By: Deputy P/E Counselor Cari Enav, for reasons 1.4 (b) and
(d)

Summary:
--------------

1. (C) On June 26, Transportation A/S for Aviation and
International Affairs Andrew Steinberg met with Portuguese
officials in Lisbon to underscore strong USG opposition to
the EU's proposal to include international aviation in its
emission trading scheme (ETS) without mutual consent. He
urged all interlocutors to work with the U.S. to reach a
framework for discussion at the September International Civil
Aviation Organization (ICAO) Assembly in Montreal. All
responded that there was intense pressure within the EU to
include aviation, domestic and international, in its ETS.
However, Portuguese interlocutors across the board commented
that the EU would not announce any unilateral actions at ICAO
and would work with the international community to reach a
negotiated solution. Luis Almeida, Portugal's Civil Aviation
Chairman with whom we met, will be representing the EU at
ICAO. He invited the Embassy and the FAA to attend the July
18 ETS workshop in Lisbon and welcomed USG suggestions.


Meetings:
--------------

2. (U) On June 26, A/S Steinberg and FAA Sr. Representative
(Brussels) Kurt Edwards met separately with
Luis Antonio Fonseca de Almeida, National Civil Aviation
Institute (INAC) Chairman; Sofia Chibeles de Azevedo, Advisor
to the State Secretary for Public Works and Communications
(responsible for Transport); Fausto Brito e Abreu, Advisor to
the State Secretary for Environment and Vitor Escaria,
Economic Advisor to the Prime Minister. On June 25, Kurt
Edwards also met with Maria Joao Botelho, MFA Deputy D/G for
European Affairs.

EU Agrees to Include Aviation in ETS, but Internal
Difficulties Remain
-------------- --------------

3. (C) All Portuguese interlocutors responded to USG
concerns by placing aviation emissions in context, noting the
strong growth in air transport in Europe and the concomitant
growth in emissions. Aviation emissions had become a
politically pressing issue, all underscored, one on which
Europe wanted to take global leadership. Furthermore, while
all 27 member-states had agreed to include aviation emissions
in the ETS, Botelho and Almeida noted that the issue remained
a difficult internal EU matter, especially for those on
Europe's periphery and/or with outlying islands such as
Portugal. Azevedo added that the internal lack of consensus
on implementation would make it difficult to reach agreement
with trading partners, particularly on the matter of mutual
consent.

No Unilateral Action at ICAO
--------------

4. (C) When presented with the U.S. aviation emissions
context, the U.S. approach to emissions, and U.S. concerns
about the EU's proposal, all officials responded that the EU
would not announce any unilateral actions at ICAO. All
agreed on the importance of reaching consensus, with Public
Work's Azevedo acknowledging that failure to agree at ICAO
would be a loss for all involved.


5. (C) To further underscore Portugal's commitment to work
with the international community on this issue, INAC Chairman
Almeida, who will serve as the EU's ICAO Representative,
invited the USG to attend a government-hosted Emissions and
Aviation Workshop on July 18 in Lisbon. He expressed his
preference for a global approach to addressing aviation and
his desire for a fully transparent ETS legislative process.
He acknowledged that Portugal had not yet fully studied the
legal aspects of the ETS proposal and emphasized that the EU
would not take any unilateral actions before the ICAO
Assembly.


6. (C) Environment,s Brito e Abreu, a commercial pilot
himself, also expressed a clear willingness to find consensus
with trading partners and to continue a dialogue with the
United States. He commented that it was necessary to "stir
the pot" to get the international community to address this
important issue. He also added that while long-term

LISBON 00001745 002 OF 002


initiatives were good (e.g., alternative fuels research and
technological advances on aircraft and engines),it would be
difficult for the EU to wait too long to reach a productive
conclusion.

Interest in Alternative Fuel Initiative
--------------

7. (U) Both Almeida and Brito e Abreu expressed interest in
the U.S. Civil Aviation Alternative Fuel Initiative (CAAFI).
Steinberg promised to forward information via the Embassy.

Comment
--------------

8. (C) Everyone with whom Steinberg spoke underscored that
the EU would not take unilateral action at ICAO and that it
would seek to reach a consensual framework under which to
advance negotiations. They acknowledged that if forced to a
vote at ICAO, the EU's motion to include international
aviation without mutual consent would easily be defeated.
Such a move would be a "lose-lose" for all involved. EU
parliamentarians might feel compelled to move ahead on their
own, thus resulting in the U.S. and many other nations filing
lawsuits against the action. Despite their strong
inclination to work closely with us to reach agreement, all
interlocutors underscored the intense political pressure
Portugal feels, particularly from the EU Parliament, to move
forward on this issue. For the meantime, barring any
unforeseen circumstances, post believes that Almeida will be
true to his word and not announce any unilateral decisions.


A/S Steinberg did not clear this cable before leaving post.
Hoffman