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EU looks to broaden EU ETS inclusion of international flights from 2014 as it lays out expectations for a global agreement

EU looks to broaden EU ETS inclusion of international flights from 2014 as it lays out expectations for a global agreement

Tue 11 Dec 2012 – Agreement on one of three market-based measures (MBMs) under consideration at ICAO together with a global framework that has the EU regulating outbound international flights in the EU ETS from 2014 are key aims EU officials will be pressing for in the lead up to next year’s ICAO Assembly. To diffuse tensions within the ongoing negotiating process in ICAO and in recognition of the progress being made, the European Commission last month proposed to temporarily ‘stop the clock’ on reporting and compliance obligations on flights to or from airports in third countries and European airports. The EU appears to accept that a global MBM may not be formally adopted until the following Assembly in 2016, with full implementation possibly not until 2020, so is expecting the Assembly to agree a framework that is in line with states applying MBMs of their own to international aviation until the global MBM comes into force. The first meeting of the High-level Group set up by the ICAO Council to look at complex policy and political elements of MBMs gets underway this week.

Announcing the ‘stop the clock’ proposal last month, EU Climate Action Commissioner Connie Hedegaard said the EU would automatically lift its suspension on including flights to and from Europe in the EU ETS if ICAO failed to reach a “meaningful” agreement at the Assembly next September/October. As negotiations begin within the High-level Group, the European Commission has laid out expectations of what such an agreement should contain.

Expert groups at ICAO have narrowed down potential MBMs that are technically feasible to three: a global carbon offsetting scheme, a global carbon offsetting scheme with a revenue generating mechanism and a global emissions trading scheme. Although the latter would fit well with the EU’s own emissions scheme, Damien Meadows, Advisor on international and European carbon markets at the Commission’s Climate Action directorate, told a conference last week that the EU was “fully supportive of the multilateral focus” on all three options.

“We are expecting an agreement on the principle of a global MBM and one of the three measures next year, accepting that it would take time for some of the legal elements to be fleshed out and then to be adopted at the 2016 Assembly,” he told delegates at the ‘Future of Air Transport’ event in London.

“It would be very welcome to have a global treaty in force by next October but it seems unlikely that will be the case so there needs to be a global framework for facilitating measures by states to reduce international aviation emissions. We are very clear a framework is required. A real issue is the scope of application. Clarity on this is needed sooner rather than later as airlines need to judge what they are monitoring and consider their costs and pricing policies.” He added the framework should have immediate application after the 2013 Assembly.

Meadows said the framework should be non-discriminatory and avoid market distortions, and consistent with the 15 MBM principles laid out in the A37-19 resolution adopted at the 2010 Assembly. Such a framework could be based on a route-based approach, he suggested, in which Europe was responsible for regulating emissions from outgoing international flights and other countries covering them on flights in the other direction, consistent with the principle of different circumstances and respective capabilities of ICAO member states. “Europe sees a lot of merit in this and it would be manageable for airlines,” he said.

Another suggested possibility, he said, is an airspace approach but ICAO had previously considered it to be impracticable and it had associated political and territorial difficulties.

The EU has an overall climate commitment to reduce its greenhouse gas emissions by 20% by 2020 compared to 1990 levels, which includes outgoing international flights from the EU between 2013 and 2020. As the ‘stop the clock’ proposal applies only to 2012 emissions and as the EU expects to resume the inclusion of such flights under the new ICAO framework it is anticipating, the 20% reduction goal remains unaffected.

The Commission’s legal proposal has now been presented to EU member states, said Meadows, and the European Parliament was “moving forward promptly” on an agreement. He added it had raised many questions for aircraft operators, both inside and outside Europe, and the Commission had posted a Q&A page on its website that it would continue to update.

All flights between EU member states are considered by ICAO to be ‘international’, he said, emphasising that “a key principle of the proposal is that non-discriminatory treatment is maintained for international flights within the European area.”

Meadows confirmed there was no change to the status of the EU ETS for intra-EEA traffic, as well as flights between EEA states and Switzerland, Croatia and the foreign territories and dependencies of EEA states. Airlines operating flights to or from airports in third countries and airports in Europe, previously covered by the EU ETS prior to the suspension, that did not wish to report their 2012 emissions would not be penalised by their administering EU member state as long as they returned their free allowance allocation. However, he said, “it is clear that the costs of acting had been enormously exaggerated by some” and airlines were welcome to continue to comply with the EU ETS as it may be “economically sensible”.

A number of non-European airlines, particularly the major US carriers, have been charging passengers through fuel surcharges for EU ETS compliance costs during the course of 2012 (see article). Meadows said there would be an issue for these airlines if they no longer wished to comply with the 2012 obligations as to whether they should refund the charges or invest the money in efficiency or environmental improvements.

Also speaking at the London conference, Paul Gretch, Director of the Office of International Aviation at the US Department of Transportation, said the dispute with the EU over the EU ETS had come “pretty close to a trade war”. He said the United States recognised that global solutions were necessary, but added: “We have to be realistic that countries at ICAO have different postures and to get to the Assembly next October and beyond, we will all have to move out of our comfort zones.”

He told GreenAir that it was highly unlikely the US Secretary of Transportation would use the powers accorded under the recently passed legislation to prohibit US aircraft operators from complying with the EU ETS before the Assembly.

European Commission – ‘Stop the clock’ Q&As (updated 11 Dec 2012)
ICAO 2010 Assembly Resolution A37-19 (pdf)
Future of Air Transport conference

Jos Delbeke, Director General of Climate Action for the European Commission and member of the ICAO MBM High-level Group, sets out EU expectations for an ICAO agreement on MBMs with environmental journalist Sonja Van Renssen for EU policy broadcaster viEUws

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