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Compromise required as European Parliament negotiates with EU Council over aviation ETS

Compromise required as European Parliament negotiates with EU Council over aviation ETS | Liese, European Parliament, ETS, European Union Council

The European Parliament
Mon 21 Apr 2008 – Dr Peter Liese, the German MEP steering the aviation EU Emissions Trading Scheme (ETS) directive through the European Parliament, says that “a lot of work needs to be done” on reaching a compromise agreement with the EU Council before a second reading comes before Parliament in July, but is cautiously optimistic.
 
There are still a number of proposals where the two co-legislating bodies still remain apart. For example, on the subject of NOx emissions Liese said Parliament had voted in favour of a multiplier, which should be in place until specific legislation on NOx is adopted. “At the moment, there is not even a draft of the Commission proposal on the specific legislation available,” he said. “That is why the multiplier should be established according to Parliament’s first reading.” In the common position adopted by the Council last week, the multiplier issue was left out all together.
 
The Council’s environment ministers have confirmed their support for the Commission’s proposal of a 100% cap, whereas Parliament had asked for 90% in the first period. However, it is the second period that mainly concerns Liese. “The Parliament insists on a downward review in line with the 20 or 30 per cent target by 2020, with 1990 as the base year. I think it necessary to specify the cap now for the post-2012 period. It should be in line with the level of ambition that is included in the general ETS after 2013. According to the Commission proposal in January, this would mean a reduction of 1.74% each year, since this is the reduction other participants in the ETS will be confronted with.
 
“On the other hand, there is a very justified political debate about the ambition of the Commission’s proposals. The ambition for emissions trading seems to be very high compared to the ambition of the proposal on effort sharing and it seems to be desirable to readjust the two proposals. That is why I propose only a reduction of 1.5% each year for the aviation sector.”
 
On the first reading, Parliament voted that aviation should start with 25% auctioning of allocated allowances, whereas the Council’s common position follows the Commission’s original proposal of 10%, the other 90% being a free allocation. Although Liese feels a compromise can be more easily reached, the second period is of concern. “The review clause for post-2012 is very soft,” he suggests.
 
He says it is very important to avoid a situation where airlines could buy permits from other sectors without improving efficiency and environmental performance of the sector itself. “That is why two Parliament amendments that included an efficiency clause and limits on the purchase of allowances from other sectors were adopted. The Council did not consider this point, but it seems to be very important for the credibility of the environmental policy of the European Union.”
 
The Council has added a new clause that would exclude from the scheme flights by carriers operating less than 243 flights in three consecutive four-month periods, effectively less than one flight in an out of an EU airport per day. This is mainly aimed at helping small airlines from developing countries. Liese supports the basic principle but would prefer to base it on CO2 emissions rather than flight numbers, otherwise there is no incentive for a carrier to operate more environmentally efficient aircraft. On the special reserve for new entrants or fast-growing aircraft operators newly introduced by the Council, Liese said this was broadly in line with Parliament’s thinking and so was acceptable.
 
However, says Liese, the most important difference between the Council and Parliament is the question of how revenues generated by auctioning should be dealt with. In last week’s announcement (see story), the Council’s common position states “that EU member states would determine the use to be made of revenues generated from the auctioning of allowances. These revenues would be used to tackle climate change in the EU and in third countries and to cover administrative costs.”
 
Liese says that Parliament supported the Commission proposal which gave a clear earmarking of the revenues but also added some “substantial” points, such as reducing taxes on environmental transport modes and investment in research for technology for clean aircraft. However, he says, “the Council ignored the amendment of Parliament and has explicitly stressed that no kind of earmarking will be accepted.”
 
He is aware though that this is a matter for finance ministers to consider and understands the political dimension that it raises. “On the other hand, Parliament’s position is more than justified for legal and political reasons.”
 
He believes that if the money generated by auctioning goes straight to national treasuries, without any earmarking or consideration to third countries, “it will be politically more difficult to get support from the third countries for our climate policy.”
 
It would also be difficult, he maintained, to justify the policy to the EU’s own citizens if they could not see the benefits in behaving more ‘green’ when choosing their mode of transport. “Tax cuts on environmental-friendly transport modes would be crucial in convincing citizens that we are not just collecting money but are supporting environmental activities. The same logic applies for investment in research and technology for clean aircraft. The impression that the scheme mainly collects money for finance ministers and does not address the real problem needs to be avoided.”
 
Liese shares the Council’s view that a global agreement on reducing greenhouse gas emissions from aviation is “the final goal”.
 
“It is obvious that on the way to a global agreement we need to include other major countries and regions step by step.” He said he was very encouraged by the progress of the Lieberman-Warner Climate Security Act in the US Senate and its support from the three presidential candidates. Accepting that no real progress can be made until the next administration takes office early next year, as well as the differences in approach to emissions capping between the two, he encourages the EU to engage in negotiations with the United States on the issue.
 
“Also, discussions with other third countries should be enforced to include more and more parties. This will increase the environmental effect and it will limit even more any kind of possible distortion of competition for European airlines, airports and regions.”
 
Liese says he is liaising with the Transport Committee and is also presenting a draft report to the Environmental Committee on May 5. The aim is to come up with a draft recommendation by the end of May to put before Parliament in July. He has already held “very constructive talks” with the Slovenian environment minister (Slovenia currently holds the EU Council Presidency) and is optimistic that an agreement will be reached before the second reading of the directive.


 

 

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