Negotiations on aviation's proposed entry into the EU Emissions Trading Scheme reach a critical phase
Thu 19 June 2008 – After two rounds of closed meetings between representatives of the European Parliament, the European Council and the European Commission, differences remain on some key issues concerning the inclusion of aviation into the EU Emissions Trading Scheme. A third crucial meeting has been set for next Thursday (June 26) at which a deal needs to be sealed before the directive is due to be submitted to a second reading in a full plenary session of the Parliament on July 8.
It appears the parties are moving towards a compromise position on the levels of free allocation of permits and capping, as well as the starting date, although no further details have been forthcoming.
The sides are also coming closer to agreeing an exemption from the scheme for smaller airlines or those non-EU airlines that have a relatively few number of flights to EU countries. The Council has introduced a derogation that would exempt those non-EU airlines with less than one flight a day to the EU on average but the Parliamentary Environment Committee (ENVI) wanted an exemption based on the level of CO2 emissions. A figure of 10,000 tonnes of CO2 emissions per year has been mooted, so that airlines emitting less than this would be exempted.
However, positions have become entrenched on the issue of the ‘multiplier’, as proposed by ENVI, whereby airlines and aircraft operators would have to buy two permits instead of one for every emitted tonne of CO2. The Council is strongly opposed to the idea and the Commission has recently commissioned a study to look further into the radiative forcing effects of burning jet fuel at high altitudes before recommending action. Even within ENVI, the multiplier is a controversial subject.
Another area of disagreement is on the question of what should be done with the revenues from the auctioning of allowances by Member States. Parliament had supported a Commission proposal that revenues should be used, for example, in developing environmental transport modes and investment in research on clean aircraft technology. The Council, though, has refused to accept the earmarking of revenues, saying it is up to the individual Member States to decide on what the money should be spent.
The question of whether trading should be open, in which airlines can buy permits from other sectors, or closed, as proposed by ENVI, is also still to be resolved.
The parties now have a week to come up with, as a source described, “creative solutions” to the outstanding issues. Along with the looming Parliamentary deadline of July 8 and the summer recess is the additional factor that the current Slovenian presidency of the EU finishes at the end of June. Slovenian officials have played an important mediating role in the negotiations.
If an agreement cannot be reached then a conciliation procedure is invoked, thus delaying progress well into the autumn. Should that fail then, in theory, the directive would have to be abandoned.