Commission requests swift decision on EU ETS suspension proposal as Obama passes prohibition bill
Fri 30 Nov 2012 – After announcing it would be “stopping the clock” for one year of enforcing the EU ETS on international flights to and from Europe so as to allow ICAO to move forward on developing a global agreement regulating international aviation emissions, the European Commission has published its proposal for a Decision by EU member states and the European Parliament. The Decision temporarily defers enforcement of the EU ETS in respect of incoming and outgoing flights to Europe for one year, pending the outcome of the ICAO 38th Assembly taking place in September/October next year. Flights between EEA states, including their dependent territories, plus flights between EEA countries and Switzerland and Croatia are still covered by the scheme and all aircraft operators, regardless of nationality, conducting such flights will still be required to comply with MRV and surrender the necessary allowances by next April. Meanwhile, President Obama signed into law this week the EU ETS Prohibition Act giving the US Secretary of Transportation the authority to prohibit US aircraft operators from taking part in the scheme.
The European Commission says the one-year suspension for international flights to and from Europe is intended to help progress towards developing a global market-based measure (MBM) and an international framework for its application. If “clear and sufficient” progress is made at the Assembly further legislative action will be proposed, it says. It is unclear exactly what this means in practice, but the Commission says on its website that an ICAO agreement has to include three key elements: it must deliver aviation emission reductions at least as big as the EU ETS is doing; it must be non-discriminatory for all airlines; and it must contain targets and measures for ICAO member countries.
Should the Assembly fail to make the necessary progress, the Commission says the EU ETS legislation would be applied in full again to all flights to and from non-European countries.
For now, the suspension of such flights remains a proposal and the Commission is looking for a swift agreement between the European Parliament and the EU Council, which represents the EU member states, and preferably no later than March. In the meantime no enforcement action will be taken against aircraft operators regarding international flights to and from Europe.
Many non-European airlines and smaller aircraft operators will now believe they are off the hook but aviation emissions verifier VerifAvia estimates up to 80% of them will still have intra-EU/EFTA flights to report, although at a much smaller scale. CEO Julien Dufour said many non-EU airlines operate occasional flights within the EU/EFTA region that include unscheduled technical stops or triangular flights involving an intra-EU sector. Most non-European business jet and cargo operators that serve Europe are likely to find themselves still covered by the EU ETS, he added.
Dufour said operators will still have the option to report intercontinental flights if they wish to. “It may be that in certain cases, it would be more beneficial for an airline to continue to do so,” he said. “For example, if the 2012 emissions on such flights are lower than the free allowances received in relation to the intercontinental flights operated in 2010, an airline will be better off not returning the free allowances, and continue to report the intercontinental flights.”
The condition for not reporting intercontinental flights, added Dufour, is the return of free allowances that might have been allocated to the airline in relation to the reported 2010 tonne-kilometre data on intercontinental flights.
The percentage of auctioning under the scheme remains at 15%, as laid down in the EU directive, and consequently a lower quantity of aviation allowances will be auctioned for 2012, reflecting the proportionately lower number of total allowances in circulation. Proposed aviation allowance auctions by EEX and ICE on behalf of the EU, Germany and the UK have been put on hold following the suspension announcement.
On passing the S. 1956 EU ETS prohibition bill, the White House noted that it would hold US civil aircraft operators harmless from the EU ETS but it also encouraged the US Secretary of Transportation and officials to conduct international negotiations to pursue a worldwide approach to address aircraft emissions
Environmental groups said that the legislation was “largely irrelevant” if ICAO was making progress and “sent the wrong message” if the US was serious about climate change.
Tim Johnson of AEF, who represents a coalition of environmental groups at ICAO and is part of an ICAO expert group looking at MBMs, said: “The EU’s ‘stop the clock’ action has set another clock ticking; without an acceptable global outcome next year, the full provisions of the EU ETS will come back into effect in 2014. The US has said it supports the goal of holding aviation emissions at 2005 levels from 2020 onward, which is a step in the right direction. We now want to see the US engage constructively during this limited window of opportunity rather than divert its energy to implementing the ETS Prohibition Act which is largely irrelevant and symbolic.”
Annie Petsonk, international counsel at Environmental Defense Fund, added: “Unlike the bill that passed here in the US, Europe’s stop-the-clock on its law aims to ‘create a positive atmosphere’ for the international talks. Now the spotlight is on ICAO, and on whether the US will step forward with the real leadership needed to drive agreement on an ICAO programme to cut aviation’s carbon pollution.”
However, the final passing of the bill is a major victory for US airline association Airlines for America (A4A), which has campaigned against the inclusion of its members into the EU ETS since the scheme was first mooted.
“With the President’s signature, the United States has sent an unequivocal signal to the EU and the world that while the illegal and unilaterally-imposed EU ETS is the wrong way to proceed, there is a steadfast commitment to the right way – a global sectoral approach at the international level,” said A4A President Nicholas Calio.
A4A noted the EU suspension was temporary and should be viewed only with cautious optimism, and US government action was therefore still required. A4A has pushed for an Article 84 legal challenge by the United States at ICAO but now says such a move may not be necessary as long as the EU eventually withdraws permanently the application of the EU ETS to international aviation.
Stopping short of calling for an agreement on a global MBM for international aviation, Calio added: “Working within the framework of ICAO, the United States will continue to lead the effort to secure a policy that will meet the twin goals of allowing for industry growth and continuing improvements in fuel efficiency and reduced emissions.”
The United States is understood to have appointed Todd Stern, the US Special Envoy for Climate Change, as its representative on a High-level Group set up by the ICAO Council to advise on key political and policy issues connected with the application of MBMs to international aviation emissions (see article).