Fri 18 Oct 2013 – The European Commission’s EU ETS proposals released this week on including from 2014 aviation emissions over European airspace from intercontinental flights to and from European airports have taken many by surprise. At the 38th Assembly earlier this month, ICAO Member States succeeded in reining back the inclusion of third countries into national and regional market-based carbon schemes such as the EU ETS by imposing a requirement for prior agreement. Regardless, the Commission has asserted the EU’s right to regulate its own sovereign airspace but airline industry bodies have reacted with concern that this may undermine hard-won gains at ICAO towards agreeing a global scheme. Others though believe the airspace proposal does not go far enough as it severely reduces the environmental effectiveness of the scheme’s original aims.
The International Air Transport Association (IATA), which represents around 240 global airlines, expressed “concern and surprise” over the Commission’s proposals published on Wednesday (see article).
“The 38th Assembly concluded with an historic agreement to develop a global market-based measure (MBM) which will be a key enabler of aviation’s commitment to carbon-neutral growth from 2020 (CNG2020). So we are concerned that the Commission is now recommending a course of action that has the potential to undermine the goodwill that has brought us to this point,” said IATA Director General Tony Tyler. “As the Commission’s proposal moves to the co-decision process with the European Parliament and Council we trust that there will be wide stakeholder engagement, including with the international community.
“We have all worked hard to reach a consensus on the way forward through ICAO for a global MBM. It is of critical importance to ensure that everybody – including Europe – stays focused on the big picture of CNG2020.”
Representatives from airline industry bodies outside Europe also expressed deep reservations about the Commission’s intentions.
“We view this development with concern,” commented Andrew Herdman, Director General of the Association of Asia Pacific Airlines (AAPA). “The inclusion of international airlines without the consent of their respective governments is likely to meet with strong opposition, particularly from major developing countries. This runs counter to the substance and spirit reached at the Assembly.
“We cannot afford to jeopardise the good progress that has been made in reaching a consensus on the development of a global MBM by 2020. That’s where our collective efforts should be focused.”
Speaking in Brussels last week before the Commission announcement, Abdul Wahab Teffaha, Secretary General of the Arab Air Carriers Organization (AACO), warned of trade wars if the EU decided to recapture the carbon emissions of non-European airlines.
The Commission will be watching closely for the reaction of the United States government to its proposals. The airspace approach had originally been submitted to ICAO by the US as a suitable way forward for the EU to proceed with its carbon scheme after the Assembly, and sided with European representatives against the inclusion of the ‘mutual agreement’ clause put forward by developing States such as Russia, India and China. The EU will be hoping for continued US support over its airspace proposals for the EU ETS, although a law passed by Congress gives powers to prohibit US carriers from participating in the EU scheme.
Airlines for America (A4A), which represents major US airlines that stand be included in the revised scheme, unsurprisingly opposes the Commission’s plan.
“The proposal to continue the unilateral application of the EU ETS to intra-EU flights and extend it to portions of international flights to and from the EU without the agreement of the airlines’ country of registry flies in the face of the agreement reached at ICAO two weeks ago,” said A4A spokesperson Katie Connell. “As this proposal is only an initial draft, we urge the European Council and Parliament to use their deliberative process to revise it in line with the global agreement.”
European airlines, on the other hand, have differing views on what should now happen with the EU ETS but generally are not happy with the proposals as they stand.
The Association of European Airlines (AEA), which represents the main network carriers, said it did not oppose the airspace model but was surprised the Commission was proposing it in view of the adoption by ICAO of the mutual agreement principle on regional MBM schemes.
“AEA is concerned that the Commission is now recommending a course of action that has the potential to undermine the goodwill that has brought us to this point,” AEA spokesperson Viktoria Vajnai told GreenAir. “As the Commission’s proposal moves to the co-decision process with the European Parliament and Council, we trust there will be wide stakeholder engagement, including with the international community. We believe the consequences of adopting such a scheme could trigger once again non-compliance and possible retaliation by third countries.
“The proposed move from intra-EU to airspace barely increases the coverage – from 9% of world aviation CO2 to 13%, or at a EU level from 27% to 39% – yet unleashes the same political hurdles and could harm the industry’s ask for a global scheme through ICAO.”
The position of the European Regions Airline Association (ERA), which represents regional carriers, is that the EU ETS should now be suspended entirely until after the outcome of the next ICAO Assembly in 2016 in expectation of reaching an agreement on a global MBM to be implemented from 2020.
On the other hand, the European Low Fares Airline Association (ELFAA) criticised the Commission’s proposals as not going far enough since the ICAO Assembly “had failed to deliver a roadmap for a global MBM, with a clear timescale for implementation and with practical measures in the meantime between regional and local schemes.”
It said in a statement: “ELFAA is surprised and disappointed to see the Commission rushing to propose a further dramatic weakening of its own system instead of delivering on its unequivocal ultimatum to ICAO to revert to the full, legally-proven scope of the EU ETS. The proposal is long on further exemptions but short on environmental protection, and short too on any measures to correct the discriminatory and distortive effect on intra-EU/EEA operators of the current ill-conceived derogation.
“Moreover, if there is to be a dramatically-reduced scope for the EU ETS, the proposal also brushes aside the neglect to date to recalibrate accordingly the benchmark for allocation of allowances, which disadvantages intra-EU/EEA operators. Far from addressing this perversity in the current temporary derogation, the proposed amendment makes clear that it will make no effort to correct it before 2018 at the earliest.”
ELFAA’s Secretary General, John Hanlon, called on the EU to restore its credibility and environmental credentials and urged the Council and Parliament “not to support this unthought-through proposal, the losers from which are the environment, European aviation and European consumers.”
Brussels-based NGO Transport & Environment (T&E) said the Commission’s proposal to restrict regulation to emissions in its airspace acknowledged the concerns of ICAO Member States but failed to include a fallback provision should the ICAO process fail to agree global implementation details in 2016. Airspace coverage, it said, left the vast bulk of EU aviation emissions, which come from long-haul flights, unregulated and, on a global scale, 78% of aviation emissions would remain uncovered because of flights over international waters.
As uncertainties remained about an ICAO agreement in 2016, T&E urged the EU to extend ETS coverage from 2017 and regulate intercontinental flights on a 50/50 basis in which the first 50% of any departing flight and the last 50% of any arriving flight should be covered.
T&E’s Aviation Manager, Bill Hemmings, described the Commission’s proposal announcement as a “grey day” for the climate. “It is disgraceful that foreign and industry pressure has obliged Europe to shrink its own aviation emissions law to the bare minimum,” he said. “While aviation emissions are skyrocketing, Europe’s aviation climate measure has had its wings clipped.”
Showing some lone support for the Commission’s position, Tim Johnson of the Aviation Environment Federation said the Chicago Convention, which underpins ICAO, provided a legal basis to take action within regional airspace that goes further than the provisions of the Assembly climate change resolution.
“The Commission proposal is right to use this approach to salvage as much of the original ambition as possible, while recognising important elements of the resolution, such as the de minimis provision, and the support shown for an airspace approach prior to the Assembly by many States, including the United States,” he said.
“But from an environmental perspective it does result in a vastly reduced emissions coverage, so this should be a temporary measure to be reviewed after the next Assembly in 2016 when EU States will need to re-examine the full range of options available to tackle GHG emissions from the sector.”
Industry will get its chance to exchange views on the proposals with the European Commission at a Brussels meeting next Tuesday (22nd).
European Commission’s EU ETS proposals
ICAO 38th Assembly Climate Change Resolution
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