UK says it will not earmark aviation revenues from EU ETS auctioning for environmental measures
Thu 14 Aug 2008 – At a recent closed meeting, officials from the UK Department of Environment, Food and Rural Affairs (Defra) and the UK Department of Transport told aviation representatives that the UK will not agree to ring-fencing revenues raised from airlines through the auctioning of EU Emissions Trading Scheme (ETS) allowances for environmental purposes such as clean aircraft research. This flies in the face of an important provision in last month’s agreement between the European Parliament and the EU Council.
A Defra spokesman confirmed to GreenAir that the UK does not hypothecate any revenues from the EU ETS for specific purposes and saw no legal requirement to do so.
According to a European Parliament statement issued after the compromise agreement reached between its environment committee and the Council, revenues should be used to fund climate change mitigation; research on clean aircraft; anti-deforestation measures in the developing world; and low-emission transport. The directive to bring aviation into the EU ETS from 2012 was passed by MEPs in a unanimous vote at the subsequent plenary session.
The earmarking was a hard-won concession by the Parliament’s rapporteur on the legislation, Peter Liese, who believed that if the revenues vanished into national coffers it would be politically more difficult to get support from those non-EU countries whose airlines will have to join the scheme if they operate to and from airports within the EU.
“Money should be used to tackle climate change and not disappear somewhere in the general budget,” he added. “It is not a tax but an environmental instrument. This is why we are very engaged in this field.”
The Council had initially rejected the ring-fencing proposal but agreed to it in order to reach the late compromise. The President of the Environment Council and Slovenian Environment Minister, Janez Podobnik, whose country held the EU Presidency at the time, said the agreement had the “overwhelming support” of EU Member States.
The revenues from the auctioning of the 15% of total emissions allowances, he said, “are to be used to tackle climate change in the EU and third countries, including measures to reduce greenhouse gas emissions and to fund research and development for mitigation and adaptation in the aeronautical and low-emissions transport field. While the precise amount to be used for these measures has not yet been set, revenues must be used to fight climate change, and the Member States are required to report to the Commission on the use of these revenues.”
The UK’s position will strengthen the view among many airlines, as well as governments outside the EU – particularly the United States, that the ETS is merely an expensive tax that has little to do with tackling climate change and is illegal under the Chicago Convention.