EU States back proposals on extending Aviation EU ETS 'stop-the-clock' and provisions for CORSIA review
Thu 22 Jun 2017 – EU Member States have agreed a common negotiating position ahead of talks with the European Parliament (EP) on existing regulations concerning the Aviation EU ETS and its post-2020 future when the global CORSIA market-based scheme starts. The Council, which represents the States, says it broadly supports European Commission proposals, including to extend the derogation – known as ‘stop-the-clock’ – for extra-EEA (European Economic Area) flights until the end of the current phase of the EU ETS in 2020. This is also supported by most EP members but as the derogation ceased to exist at the end of 2016, swift action will need to be taken to adopt a revision by the end of this year to avoid a legal gap. The two institutions must also agree on future steps to be taken in the light of decisions still to be reached at ICAO on the global scheme. A report has already been submitted by EP rapporteur Julie Girling, along with proposed amendments by members of the EP environment committee (ENVI), with a vote scheduled for July 11 and a EP plenary vote in the autumn.
Published in February, the Commission proposal recommends continuing with the ‘stop-the-clock’ scope that was applied to the 2013-2016 period under which flights to and from outermost regions and third countries were derogated, while flights between EEA airports remain fully covered. The amount of free allocation of allowances received by aircraft operators from 2017 would remain the same, so proportional to intra-EEA activity. The dates for reporting and surrendering allowances from emissions in 2017 are 1 April and 1 May 2018 respectively.
The Commission also proposes to apply the linear reduction factor (LRF), under which the number of allowances decline at an annual rate in an effort to achieve the EU’s 2030 emissions reduction target, to the aviation sector from 2021. This is an important part of a reform package for Phase 4 (2021-2030) of the scheme that is currently under discussion.
The Commission proposal sets out provisions for a review of the EU ETS Directive (2003/87/EC) in view of the implementation of CORSIA and once all the relevant decisions have been taken by ICAO on issues such as monitoring, reporting and verification (MRV) and offsets to be approved under the scheme. Subject to the review, the Council says it supports the LRF application, as do rapporteur Girling and most other EP members.
To prepare for CORSIA implementation, the Commission proposes two new articles (28b and 28c) in the EU ETS Directive. The first requires it to report to the EP and Council on international developments over CORSIA, including actions taken by third countries to implement the scheme. The Commission says it will need to consider ways to implement the relevant ICAO instruments in Union law through a revision of the Directive, which may be accompanied with legislative proposals as appropriate. The second article concerns provisions for the appropriate MRV of emissions applicable under CORSIA.
The Commission is also proposing an amendment to Annex I of the Directive to extend from 2020 to 2030 the exemption for non-commercial aircraft operators emitting less than 1,000 tonnes of CO2 per year. This has proved an effective measure in lessening the administrative burden on small operators and has reduced the number of operators regulated by Member States by around 2,200, while representing only 0.2% of emissions, it says.
In her report to the ENVI committee, Girling – who has succeeded Peter Liese in the rapporteur’s role and is now also the rapporteur on the EU ETS Phase 4 reform file – said she “broadly concurs” with the Commission proposal, adding that it would be prudent to await further ICAO progress before fully assessing the EU ETS for the post-2020 period. However, she wants specific milestone dates specified in the new legislation for reporting by the Commission on ICAO progress and an expiry date included on the latest derogation extension.
“As the implementation report will establish the requirements for future EU ETS legislation, your rapporteur believes it is important to stipulate the key technical elements, processes, and environmental impacts to be evaluated,” she says. “The report should examine CORSIA’s overall ambition in relation to the EU’s commitments under the Paris Agreement. In particular, to assess its effectiveness, the report should also inspect the level of third country participation, penalties for non-compliance, processes for public input, standards for MRV, rules on the use of biofuels, and should evaluate offsetting provisions against objective criteria. Through addressing these points, the implementation report will enable the Commission and the co-legislators to ensure the environmental standards of the EU ETS are maintained.”
She expressed concern about a lack of transparency at ICAO and the non-disclosure protocol of ICAO’s environmental technical committee, CAEP. “Your rapporteur is concerned that such limited transparency in the process could undermine the quality of information required to inform the EU’s post-2020 discussions as well as institutional trust. It will therefore be essential for CAEP to allow the Commission to provide regular substantive updates to the European Parliament and Council.”
Other amendments she wants to see included call for the aviation sector to receive, in line with other sectors, 10% fewer allowances than its 2014-2016 average, to increase the number of auctioned allowances from 15% to 50% and for revenues generated by these allowances to be earmarked for climate finance and research, development and commercialisation of new climate technologies.
Amendments proposed by other ENVI members include making EU Emission Allowances (EUAs) and EU Aviation Allowances (EUAAs) interchangeable so that EUAAs can be used in the stationary sector as well; additional to the intra-EEA scope from 2017 to 2020, the scope should be extended to cover 50% of emissions to and from extra-EEA airports; flights to and from OECD countries not joining CORSIA from the beginning to be subject to the EU ETS; provision to address the non-CO2 climate impact of aviation; and more clarification on the Commission’s tasks in the scope of its reporting on CORSIA implementation progress. Another proposal calls for introduction of recital text that from the second phase of CORSIA starting in 2024, the aim should be for a single global scheme with ICAO’s measure taking precedence over the attainment of the EU’s targets.
Elsewhere, the Swiss Federal Office for the Environment (FOEN) has issued an ordinance entering force on 1 July 2017 that requires aircraft operators from 2018 to acquire and report tonne-kilometre data for domestic flights and flights from Switzerland to EEA Member States. This is as a result of an agreement – yet to be signed and ratified – to link the EU and Swiss emissions trading schemes, and Switzerland plans to integrate aviation emissions into its own scheme after the two systems have become formally linked, a longstanding process that has taken many years of negotiations to resolve.
FOEN says the TK data will be used to determine the maximum quantity of available emission allowances for the aviation sector in the Swiss ETS and the number of allowances to be allocated free of charge to operators. It estimates around 120 operators are affected, of which a 100 foreign and a dozen Swiss operators are already included in the EU ETS, so the procedure will be new only for a small number of Swiss operators.