Rumours were flying around over the weekend that the government is planning a u-turn on its decision to rule out building a third runway at Heathrow. But the FT yesterday quoted one of George Osborne's aides as saying "there is no softening" of the government's position. So what's going on?

The rumours seemed to kick off (not for the first time) on Saturday after Tim Yeo, Tory chairman of the energy and climate change select committee, said he had "completely changed his mind" and now believed a third runway at Heathrow was the only way to tackle the UK's capacity issues. 

Speculation was already growing: some had interpreted David Cameron's recent comments on the need to expand capacity in the southeast of England as a sign that the government's stance was weakening, even though he quite clearly excluded Heathrow from the list of options.

John Stewart, a transport and environmental campaigner, argues in the Guardian today that the rumours are simply spin on the part of the aviation industry - as if, by using the power of suggestion, lobbyists could somehow pave the way for a u-turn. 

Perhaps he's right. Nevertheless, shouldn't the government listen to the third runway yay-sayers - some of whom are, apparently, senior Tories - and keep all options on the table?

Lufthansa's CEO is the latest industry leader to call on the European Union to suspend the inclusion of aviation in its controversial Emissions Trading System (EU ETS) - despite the EU's insistence that this is not a legal possibility.

Talking to the media as Lufthansa released its annual report for 2011, Christoph Franz said any system for regulating aviation carbon emissions "must be introduced worldwide" rather than at a national or regional level. Otherwise it would distort competition for European carriers and put them at risk of retaliatory action from nations opposed to the scheme, he said.

Franz was one of nine chief executives, including the CEO of Airbus, to write joint letters to European leaders earlier this week asking them to step in and stop the escalating trade conflict, after Airbus warned that the unilateral European position was already threatening deliveries of its long-haul aircraft to China.

Franz said this kind of punitive action against European businesses was "exactly what we had feared". He added that, in the face of paying EU ETS charges, German carriers should no longer be required to pay air passenger taxes.

If it came down to a choice between the two, the public would be fairly evenly split between supporting a third runway at Heathrow or a new airport in the Thames Estuary, according to a poll by the Institution of Mechanical Engineers. 

A quarter of the 1,000 people asked said they would favour the expansion of Heathrow as a way to tackle the UK's airport capacity crunch, while 21% said they would back the new estuary hub. 

When asked if they believed the government was right to block Heathrow's third runway, 35% thought it was the right decision and 32% the wrong one.

Meanwhile the ES reports that Ken Livingstone (pictured) has made the Thames Estuary airport a central focus of his campaign for re-election as Mayor of London. 

Livingstone reportedly said current mayor Boris Johnson would cause the "total collapse of the west London economy" if he succeeded with the plans.

More detail has emerged about next week's meeting in Moscow of nations opposed to the European Union's Emissions Trading System (EU ETS). Twenty-six countries are expected to take part in the meeting to discuss joint action against the EU's emissions trading scheme, which they say creates competitive distortion and breaks international law. Until now, all we knew was that were going to discuss taking "retaliatory measures" against the ETS. But a draft agenda has been leaked, which outlines some of the measures under consideration. According to the NY Times, those include:

Interesting blog post from one of the US Department of Defense's energy advisors, Kate Brandt, this weekend on how the EU ETS could kick start the American advanced biofuels industry. 

The industry has made some significant process, Brandt points out, but there are still no commercial scale advanced biofuel plants in the US. (Advanced biofuels, or "drop in" fuels, can be used in existing engines, but are cleaner burning than traditional jet fuels - oh and they can be made from things like municipal waste, hence the lovely photo of a dump in Mumbai.)

Now, she argues, airlines have an incentive to purchase biofuels to avoid paying a tax every time they fly to and from Europe. "In the short-term, airlines may see passing on the cost of the ETS to the customer as the easy solution but this would be a very unpopular long term solution."

On a related note, this paper prepared for the 27th roundtable on sustainable development, held at the Organisation for Economic Co-operation and Development's (OECD) headquarters last week, has a good breakdown of the arguments for and against biofuels, including advanced biofuels.