President Barack Obama signed a bill yesterday (27 November) shielding US airlines from paying for each tonne of carbon their planes emit flying into and out of Europe, despite a recent move by Europe to suspend its proposed measure for one year.
In an effort to tackle aviation's small but fast-growing contribution to climate change, the European Commission issued a legislative proposal in December 2006 to bring it into the EU's Emission Trading System (ETS).
It originally applied to industries and utilities but took effect for airlines on 1 January 2012. It involved imposing a cap on carbon dioxide emissions for all planes arriving or departing from EU airports, while allowing airlines to buy and sell 'pollution credits' on the bloc's carbon market, and so reward low carbon-emitting aviation.
Non-EU governments and airlines have battled the EU, threatening trade wars and retaliation for European airlines flying to other countries.
The bill was the first piece of legislation debated on the House floor after the US Congress returned from recess on 13 November, and had been cleared by the Senate in September in a rare unanimous vote.
It gives the American transportation secretary the power to shield US airlines from Europe's Emissions Trading System (ETS).
Lawyers have said the bill is an unusual piece legislation because it would prevent US companies from complying with the laws of another country.
"It never made a bit of sense for European governments to tax our citizens for flying over our own airspace - and with the passage of this law we've got the tools we need to prevent it from happening and protect American jobs," said Democratic Senator Claire McCaskill, a co-author of the bill.
The House passed the bill despite the announcement on Monday that the European Union would "stop the clock" on enforcing its law for one year.
McCaskill and co-sponsor Republican Senator John Thune said in a statement that their bill had pressured the EU into delaying the enforcement of their cap-and-trade scheme for aviation.
The EU had also been under pressure from China, one of the world's fastest growing markets for aircraft, which had threatened to cancel orders of European Airbus aircraft if the EU did not back down from applying its ETS on all airlines.
One EU official took to the social networking site Twitter to suggest that United States was not making good on suggestions for "greener" policies.
Obama made reference to climate change as one of a trio of issues facing the country in his victory speech after being re-elected on 6 November.
"So far the reelected President Obama climate policies look EXACTLY as in first term. Wonder when we'll see the announced change?" Connie Hedegaard, EU climate action commissioner, said in a tweet.
Jo Leinen, member of the Environment Committee in the European Parliament said:
"It is a bad signal for climate protection that President Obama signed the Anti ETS-bill as one of his first decisions after his re-election. Forbidding US companies to respect EU law is at the same time an arrogant attitude that will boomerang on consensus in other transatlantic negotiations."