Following ICAO limits on regional carbon schemes, European airlines disagree on next moves over the EU ETS
Thu 10 Oct 2013 – As EU legislators deliberate over last week’s climate change agreement at the ICAO Assembly, European airlines have differing views on how the EU should proceed with its emissions trading scheme (EU ETS) for aviation. The European Low Fares Airline Association (ELFAA), whose members include two of Europe’s biggest airlines, Ryanair and easyJet, contend none of the ‘red line’ conditions set by the European Commission or European Parliament had been met by the ICAO resolution. As such, says ELFAA, the EU should now honour its commitment to ‘snap back’ automatically to the full scope of the EU ETS. By contrast, the European Regions Airline Association (ERA), which represents intra-European regional carriers, believes the EU should suspend the entire scheme at least until 2016 to allow ICAO to formally adopt a global market-based measure (MBM). Meanwhile, the European Parliament’s rapporteur on the aviation EU ETS, Dr Peter Liese, said it was unlikely his fellow MEPs would support a reduced scheme restricted to covering only intra-EU flights.
Commenting on the Assembly resolution agreed last Friday (see article), ELFAA’s Secretary General John Hanlon said: “While some interests have hailed the outcome as a landmark resolution, in that ICAO States have agreed to continue to study proposals for a global market-based mechanism to tackle aviation emissions, in reality nothing of substance has been committed to, only three more years of discussions. ICAO has firmly rejected the EU’s publicly stated dual aims – first, to reach agreement on a realistic path to developing a global MBM and, second, to agree on a transitional framework agreement for comprehensively applying national and regional MBMs to international aviation.
“The ICAO meeting had been seen by the EU as an opportunity to make a significant contribution to the reduction of national, regional and global CO2 emissions. That opportunity has been missed.”
He noted the European Parliament’s support for the pre-Assembly EU compromise to apply the EU ETS to emissions from international flights in EU airspace only had been rejected by ICAO. The ‘red lines’ spelled out by EU Climate Commissioner Connie Hedegaard at the time of the ‘stop-the-clock’ derogation announcement last November had also not been met, he added.
A scheme applied to just intra-EU flights would be totally environmentally ineffective as it would only capture a fraction of EU aviation CO2 emissions, argues Hanlon, who also believes it would be discriminatory and therefore unlawful, given the opinion of the European Court of Justice in the case brought by US airlines against their inclusion in the EU ETS (see article). ELFAA, whose members account for over 43% of scheduled intra-European traffic, has already started legal proceedings on the issue, which have been stayed pending the EU’s next moves on the scheme.
“The EU must now restore the environmental effectiveness of the EU ETS, and EU credibility, by reverting to the legal ‘all flights’ scope,” said Hanlon.
The ERA, which has over 50 intra-EU regional airline members, takes a different stance.
“Our view is that ICAO has reached an agreement on a roadmap towards a global measure from 2020 that has been hailed by the European Commission and many others as a breakthrough and therefore there is now no place for regional schemes,” Simon McNamara, ERA’s Director General, told GreenAir.
“The EU should put on hold the EU ETS for all operations and get behind the efforts on agreeing the global MBM in 2016 for implementation in 2020. We believe there should now be a further derogation to cover all flights until 2016 and then determine what progress has been made.”
He added: “It makes no sense in having a scheme that just applies to intra-EU flights, which will only capture a very small amount of CO2 emissions – this is a global industry that requires a global scheme. The EU ETS is already very complex and expensive for our members to administer, which is not helpful at a time when European airlines are trying to recover from a recession.”
The ERA has so far not taken the legal challenge route but McNamara says if the Commission decides to extend the ‘stop-the-clock’ scope then “we would have to review our position very carefully and decide what steps to take as it would be discriminatory and potentially illegal. However, we expect to work constructively with the Commission over the next three months to ensure a fair outcome.”
The ERA’s wish for the entire EU ETS to be suspended in order to give ICAO time to develop a global MBM is unlikely though to find much support in the European Parliament.
Dr Peter Liese, the Parliament’s rapporteur on the inclusion of aviation into the EU ETS and the ‘stop-the-clock’ derogation, said the text of the final ICAO resolution had been weakened from the compromise draft agreed by the ICAO Council prior to the Assembly. Whether a global MBM would be in place by 2020 was “in the stars”, he added. However, the agreement reached at the Assembly was a first step that had only been achieved as result of strong EU pressure, which he said would be needed to be maintained.
Liese said the legal and political options on what to do with the EU ETS legislation needed to be analysed. “In our current law, it is not possible to suspend emissions trading for international aviation until 2020,” he explained. “In my estimation, the Parliament will not agree to cover until 2020 just intra-European flights.” He added that covering emissions that occurred in European airspace from all flights taking off and landing in Europe was “indispensable”.
He warned that if Parliament had not reached a co-decision on legislative text with the Council – which represents the EU Member States – by next April then the original EU ETS legislation covering all intercontinental flights serving European airports would come back into force.
The Association of European Airlines (AEA), which represents the main network carriers, has so far not expressed an opinion on the EU ETS itself. In a post-Assembly statement, the AEA applauded the ICAO agreement, which, it noted, had also been welcomed by the European Union.
“This is a triumph for real-world politics,” said Athar Husain-Khan, the AEA’s acting Secretary General. “Gradual progress is better than no progress at all and infinitely better than division and confrontation.”
The EU should reaffirm its leadership, “this time as a consensus-builder”, during the three years ICAO has given itself to build a mechanism for a global MBM, he said, adding: “Channelling the diversity within ICAO into a common purpose will be a challenging task but ultimately the rewards will be enormous. The first step has been taken, and it is an important one.”
The European Commission is expected to publish its recommendations shortly on what to do next with the EU ETS.
An AEA spokesperson has since told GreenAir: “We are not commenting on the EU ETS at the moment as we don’t really know yet what to expect from the EU. We are closely coordinating with our members to get their views aligned and represented during the consultations with the Commission. In principal, we do not oppose the so-called ‘airspace model’ as it is a proportionate: airlines would have to pay their ETS contribution according to the airspace they use in the EU.”