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