European Commission to press ahead with airspace coverage of the EU ETS despite ICAO Assembly defeat
Wed 16 Oct 2013 – Despite the recent decision by a majority of ICAO States to impose restrictions on national and regional market-based measures (MBMs), the European Commission has put forward proposals that seek to apply the EU ETS to European regional airspace from 1 January 2014. In a late move at the recent Assembly, a number of large emerging nations such as Russia, India and China succeeded in including resolution wording that agreement should be obtained from third countries before applying interim MBMs to their airlines. However, European Climate Commissioner Connie Hedegaard said today that EU countries had the sovereign right to regulate their own airspace. Under the proposals, flights to and from low and lower-middle income countries, as defined by the World Bank, with a share of less than 1% of international aviation revenue ton kilometres (RTKs) would be exempted, and new exemption levels have been set for business jet operators.
Hedegaard told a press conference this morning that the ICAO Assembly agreement to develop a global MBM would not have happened without EU pressure but now a decision had been taken to agree the details by 2016 and to start it by 2020.
“That’s the very good news,” she said. “Of course it would have been even better had more countries supported the EU scheme and had let the aviation sector contribute to the efforts being undertaken here in Europe. Not just from 2020 but from now. The majority of countries didn’t have the same view.”
It was now important to secure an agreement in 2016 and in the meantime, she said, Europe had to insist on its own sovereign right to regulate in and over its airspace.
“This is why the Commission today proposes as an interim solution on the way to a global MBM by 2020 to regulate incoming and outgoing flights entering and exiting Europe’s regional airspace. I think all countries ... would of course recognise our right to regulate in our own sovereign airspace. For obvious reasons, this is an important principle. I fail to imagine that other states would not respect this.
“We would like to consult with other countries but what is important is that we decide the rules within European sovereign territory. I would like the rest of the world to acknowledge that Europe has tried to be very constructive in the ICAO talks. We did it with ‘stop-the-clock’, which has now served its purpose, and now we are adjusting our legislation in order to create the necessary good atmosphere around the negotiations up to 2016. I very much hope our partners will see this in the spirit it is being presented.”
Hedegaard added that because of deadlines, the Commission would hope for a swift adoption before next March by the European Parliament and the Council, which represents EU Member States.
The Parliament’s rapporteur on the inclusion of aviation into the EU ETS, Dr Peter Liese, had recently expressed fears that his fellow MEPs would not support the continuation of the ‘stop-the-clock’ derogation in which only intra-EU/EEA flights would be covered. He therefore welcomed the Commission’s proposals and said it was only fair to European airlines that all flights within European airspace were covered, a view shared by the Chairman of the Parliament’s Environment committee, Matthias Groote.
“The clock will start ticking again,” said Groote. “The EU is free to legislate within its own airspace and we are committed to including aviation emissions in the ETS.” He warned that a co-decision would have to be reached on a new legislative text by next April as the ‘stop-the-clock’ derogation came to an end, which would lead to aviation emissions from all flights taking off or landing in Europe to be accounted for.
Under the proposal, all emissions from flights between airports in the European Economic Area – the 28 EU Member States plus Norway and Iceland – would continue to be covered. From 2014 to 2020, flights to and from countries outside the EAA would, in the Commission’s words, benefit from a general exemption for those emissions that take place outside EEA airspace.
The definition of EEA airspace is the distance from 12 nautical miles from the furthest point on the outer coastline of an EEA territory to the EEA aerodrome of departure or arrival with the exception of intermediate distances over third countries or sea areas between EEA Member States’ territories that exceed 400 nautical miles. Emissions from flights between airports in outermost regions and third countries, and emissions from flights between airports in the EEA and EEA Member countries’ overseas countries and territories, which are not part of the EEA, would not be covered.
There are further exclusions covering emissions over third country areas within Europe, such as Switzerland, and emissions over sea areas between mainland Europe and EU dependencies and territories. So flights to and from Switzerland, for example, will now only be covered in proportion to their distance travelled within the European region.
The Commission has also made a number of important adjustments to compliance and monitoring, reporting and verification rules to take into account the move from the ‘stop-the-clock’ derogation and the start of the airspace regulations from 2014.
A key element of the ICAO Assembly climate change resolution’s paragraphs on national and regional interim MBMs was the inclusion of a de minimis threshold to exempt developing countries from such schemes, although a number of countries objected to this. “Despite our reservation on the de minimis rule we will respect this as long as we are talking about the time up to 2020,” said Hedegaard today.
Under the de minimis, flights to and from developing countries with a share of international aviation revenue-tonne kilometres (RTKs) of less than 1% of the total should be exempted, and the EU has therefore accepted this principle. As there is no clear definition of ‘developing’ in the resolution, the Commission has determined it as countries defined by the World Bank as ‘low-income’ or ‘low-middle income’.
Using this definition, it would appear that flights to and from countries such as India, China, the UAE and major south-east Asian hubs would be included in the EU ETS for the portion of the flight over EU airspace as they are above the 1% threshold. Flights to and from countries such Brazil, South Africa and Saudi Arabia would also be included because although these countries fall below the 1% threshold, they are classified as upper-middle or high income economies by the World Bank and are therefore outside the de minimis scope of the EU ETS under the new proposals [article updated 17 Oct].
The Commission has taken the opportunity of the new proposed regulations to exempt small non-commercial aircraft operators such as business jets, the so-called ‘small emitters’, which emit less than 1,000 tonnes of CO2 per year in order to simplify the administration burden. This is expected to reduce the number of aircraft operators regulated by EU Member States by around 2,200, representing 0.2% of emissions. As of 2013, other small aircraft operators – whether commercial or non-commercial – that emit less than 25,000 tonnes of total annual emissions can now use simplified procedures.
The percentage of aviation allowances to be auctioned remains at 15% as per the EU ETS directive but a lower quantity of allowances will be auctioned for the years 2013 to 2020 to reflect the lower number of total aviation allowances in circulation because of the reduced coverage.