PORTUGAL PUSHING FOR MANDATE OF EU AVIATION

C O N F I D E N T I A L LISBON 002805

SIPDIS

SIPDIS

USEU PASS TO FAA KURT EDWARDS
PARIS PASS TO FAA LIRIO LIU
STATE PASS TO FAA FOR CBURLSON AEE-1 DKIMSKI AEU-10
STATE PASS TO NSC-LCATIPON
MONTREAL PASS TO USICAO FOR FAUX GABLE

E.O. 12958: DECL: 11/05/2017
TAGS: EAIR ECON SENV ETRD EUN PO
SUBJECT: PORTUGAL PUSHING FOR MANDATE OF EU AVIATION
EMISSIONS PROPOSAL BEFORE BALI

REF: LISBON 1745

Classified By: MTREIBER FOR REASONS 1.4 (B) AND (D)

Summary
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1. (C) Pol-Econ officers met with Ministry of Environment
officials to express USG concerns about the unilateral nature
of the EU's proposal to include Civil Aviation in its
Emissions Trading Scheme and related legal issues. Post
underscored the need to engage third countries and urged
Portugal to delay tabling a proposal. Officials confirmed
that Portugal, as EU President, was indeed pushing for a
first reading of the Emissions Trading Directive in December
despite its own concerns. However, the Portuguese did note
that they were considering alternatives in the likely event
that they did not receive a mandate. Options include the
Commission presenting a political agreement that would
inevitably delay the directive's approval by at least six
months.

Portugal Pushing the Inevitable
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2. (C) Ministry of Environment Officials told post on
November 2 that Portugal is indeed pushing for a first
reading of the EU's Emissions Trading Directive in December,
prior to the UN Framework Convention on Climate Change in
Bali. Despite its own concerns as a country on Europe's
periphery, Portugal, as EU President, must assume a
leadership role in moving forward the directive which has
gained "unstoppable EU-wide political momentum." Even if
Portugal tried delaying tactics, officials were certain that
the directive would be in effect by 2012, if not by 2010.
Such unilateral actions were needed because the International
Civil Aviation Organization (ICAO) and the International
Maritime Organziation had failed to act, they said.

More Support than Expected, But Not Quite Enough
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3. (C) During the EU COREPER meeting the week of October 29,
Portugal sought but was unable to attain member-state
agreement on key mandate issues - including the percentage of
auctioning and the timing of the directive's entry into
force. Despite Portugal's inability to gain sufficient
backing for a first reading, officials indicated that they
received more member state support than expected (much more
than half). Portugal still hopes to gain enough support for a
first reading in December but is looking at alternatives
including tabling a political agreement. Taking this path
will require a second reading and delay approval by at least
six months.

Acknowledging Problems of the Directive
--------------

4. (C) The Portuguese acknowledged US concerns that the ET
Directive could prove counterproductive at Bali, but
indicated that the EU has been holding bilateral meetings
with New Zealand, Australia and the US in Brussels in hopes
of mitigating the directive's unilateral nature. In
addition, although the EU believes that there is no legal
incompatibility between September ICAO conclusions and the
directive, Portugual conceded that a legal clash between the
EU and third countries was inevitable.
Hoffman