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EU Council agrees amendments to directive on aviation's inclusion into the EU Emissions Trading Scheme

EU Council agrees amendments to directive on aviation's inclusion into the EU Emissions Trading Scheme | European Council, ETS, Emissions Trading Scheme

Council of the European Union
Fri 18 Apr 2008 – The EU Council, the main decision-making body of the European Union, today agreed a common position on aviation’s inclusion into the EU Emissions Trading Scheme (ETS) and adopted a number of amendments to the original European Commission proposals. These will now be forwarded to its co-legislator, the European Parliament, who is due to have a second reading on the directive before the summer.
 
A start date of 1 January 2012 for the inclusion of all flights arriving at or departing from an EU airport into the scheme was adopted. “The common position considers this date as appropriate in view of the procedural steps involved in the adoption of the legislation and the need to provide for a number of implementing measures,” says the Council. The Commission had originally proposed a staggered start for EU and non-EU carriers starting in 2011.
 
On the subject of allowances, the Council has agreed on the following common position:
·         Cap – The original EC proposal of a 100% cap of historical emissions should be maintained, whilst pointing to a possible future reduction as a part of a review to be carried out by 2015.
·         Benchmark – To be slightly adjusted by introducing modifications to the payload, which it increased to 110kg per passenger and their checked baggage, and to the distance (with 95km added to the greater circle distance) used to calculate the tonne kilometre of each aircraft operator.
·         Levels of auctioning – Opts for a fixed percentage of 10%, which could be increased as part of the general review of the ETS directive. “This coupling is considered as a more cautious approach aiming both at ensuring that aviation would not be treated significantly differently from other sectors falling within the ETS, and at providing for better adaptation to the overall functioning of the scheme,” says the Council.
·         Use of revenues – Revenues generated from the auctioning of allowances would be used to tackle climate change in the EU and in third countries and to cover administrative costs.
·         Special reserve – To be created for new entrants or for fast-growing aircraft operators who can demonstrate an annual growth rate of 18% in the years following the base year used for the allocation of allowances. A set percentage (3%) of allowances would be set aside to be distributed to eligible aircraft operators on the basis of a benchmark system similar to the system used for the initial allocation. To avoid any possible market distortions, the distribution of allowances under the special reserve is a one-off, alongside a provision that the resulting annual allocation per tonne-kilometre to eligible operators shall not be greater than that to operators under the main allocation.
 
An important new exemption clause has been introduced, entailing the exclusion of flights performed by a commercial operator who, for three consecutive four-month periods, operates fewer than 243 flights per period. Thus, operators with very low traffic levels, including operators from developing countries, “would not be faced with disproportionate administrative costs”.
 
Also exempted from the scheme would be flights related to search and rescue, fire-fighting, humanitarian flights, emergency medical service flights and flights performed for the purpose of checking aircraft or equipment.
 
A number of new provisions are added to the original proposal, namely including monitoring and reporting plans, as well as the possibility to impose an operating ban at Community level on an aircraft operator that fails to comply with the requirements of the directive.
 
The Council has modified the proposal as regards the conversion of allowances and their subsequent use towards international commitments, opting for a ‘semi-open’ scheme and deleting the provision that would have enabled aircraft operators to convert their allowances into allowances that can be used by other operators.
 
A new text is added in order to ensure that credits from the Kyoto Clean Development Mechanism are only transferred to Member States’ retirement accounts for the first commitment period under the Kyoto Protocol if they correspond to emissions included in the national totals of Member States’ national inventories for that period.
 
The common position now emphasises the importance of seeking a global solution to the issue of aviation emissions reduction, “as well as the need for seeking the optimal interaction between the Community scheme and equivalent schemes from third countries”.
 
Finally, a number of points have been added to the current review clause of the ETS directive aimed at improving the reviewing of the directive in relation to aviation activities and for addressing any problems that might arise from their inclusion in the general ETS.
 
The Council’s common position falls short of meeting earlier demands of the European Parliament that followed the first reading, particularly over capping and allowances. An interesting three months of negotiations between the two lie ahead.
 
 
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