Clash looms between EU institutions on how long to stop the clock on scope of the Aviation EU ETS
Wed 13 Sept 2017 – The European Parliament voted by a clear majority today to back proposals from the European Commission to extend the derogation that restricts the scope of the EU Emissions Trading System (EU ETS) to covering flights within the European Economic Area (EEA). Agreed to enable ICAO to reach an agreement on a global carbon scheme, the derogation – known as ‘Stop the Clock’ – ended in 2016 and the EU institutions must reach a consensus by early next year. However, the vote signals a split between the Parliament and the Commission about how much longer the clock should be stopped. The Parliament voted to end the derogation by the end of 2020 in order to keep pressure on ICAO to finalise details on its CORSIA carbon offsetting scheme. In contrast, the Commission has proposed an open-ended derogation subject to a future review, in the belief that setting a time limit would create difficulties with the ongoing ICAO negotiating process. The Parliament also voted to further toughen EU ETS rules in the post-2020 period.
In a plenary debate in the Parliament on Monday, the rapporteur on the Aviation EU ETS file, Julie Girling, said the time limit on the derogation aligned with ICAO’s own decision-making deadlines but also reflected concerns over CORSIA and whether it would deliver on its commitment to deliver carbon-neutral growth from 2020.
“At present, based on the current negotiations within ICAO, progress on the offsetting provisions has been painfully slow, with some parties, notably China, now objecting to ICAO’s role in setting the rules,” she told MEPs. “I believe it would be remiss to make a decision on the future of the EU ETS when the global market-based measure [CORSIA] is, for the time being, vague and imprecise in its framework.
“It is vital that Parliament pursues the time limit. Details on the scheme from ICAO are not well enough advanced to be able to say with any certainty that they will be exactly as we currently see them.”
Urging MEPs to back the proposals supported by her colleagues on the environment committee in July (see article), she added: “I do not believe Parliament should be complicit in undermining our own negotiating position and recommend we vote accordingly.”
Responding on behalf of the Commission in the debate, Climate Commissioner Miguel Arias Cañete warned against the threat of an automatic return to the full scope of the EU ETS, which would also cover all flights to and from third countries, after 2020.
“In our view, the extension of the intra-EEA scope combined with a review will allow the EU to deal with the situation in the coming years,” he told MEPs. “We need to facilitate international developments and get ready for CORSIA and we will have to discuss the future role of the EU ETS in a context when CORSIA becomes a reality.”
The threat of a return to full scope after 2020 would create difficulties with third countries, he warned, “which are now positively involved in the ICAO negotiations and are committed to CORSIA implementation.”
He said it would take time before a clear picture emerged of how CORSIA performs and delivers. “We also have to bear in mind, in the context of the future review, we can go back to the wider scope or to cover routes with third countries in the light of the international situation at that moment and once we know when and how CORSIA is being implemented.”
Cañete said the EU would keep an ambitious position at ICAO and was working hard to find robust criteria for emission units so that CORSIA delivered real and additional reductions in carbon emissions.
“We need to know the final rules of the scheme first and then see when and how it is implemented by third countries before carrying out our final assessment,” he concluded.
Responding to remarks from an MEP calling for aviation’s non-CO2 climate impacts to be taken into account through the EU ETS, Cañete said more research was needed as it was difficult to quantify and how to address them through market measures. “We remain committed to continue studying them and assess measures in the most effective manner.”
Concluding the debate, Girling said ICAO had known since 2008 that the EU wanted to take action on fast-growing emissions from the aviation sector.
“Do not underestimate ICAO’s ability to procrastinate,” she told the plenary. “Please do not throw away our leverage – we have to hold on to it. It would be an act of self-harm to do so. We must be firm.”
MEPs duly supported Girling’s proposals, voting 601 in favour with 69 against and 26 abstentions. Trilogue discussions involving the Parliament, the Commission and EU member states (through the Council) are due to start a few weeks’ time.
“The Commission will do its best to facilitate an agreement before the end of the year,” Cañete advised MEPs.
The Parliament also voted on a slew of amendments to proposals from the Commission on changes to the Aviation EU ETS in the next phase of the scheme that starts in 2021. MEPs supported a Commission proposal to introduce a declining cap for aviation emissions in line with other industrial sectors and also backed a proposal from the environment committee to increase the share of auctioning of allowances from the present 15% to 50%.
Controversially, MEPs also backed calls for auction revenues to be ring-fenced for spending in such areas as climate finance and developing more fuel-efficient aircraft technologies. This is likely to be rejected by member states.
Although the proposed measures are seen as inadequate in reining in the sector’s emissions, the vote was welcomed by environmental NGOs.
“So far, aviation has been given special treatment, and its pollution is increasing at an alarming rate,” commented Kelsey Perlman, Aviation Policy Officer at Carbon Market Watch. “Today, EU lawmakers took a welcome step towards levelling the playing field with other modes of transport and signalled that an ineffective international deal will not replace European climate action.”
Andrew Murphy, Aviation Manager at Transport & Environment (T&E), said: “Today’s ETS vote is a strong signal that aviation emissions need to decline and ultimately go down to zero. This is very important since the question now shifts from ‘if’ to ‘how’ aviation decarbonises. The ETS is one part of the puzzle, but it cannot be the sole instrument. Just like for other sectors of the economy, we’ll need other regulations to encourage efficient aircraft, cleaner fuels and measures to reverse the sector’s sky-high emissions growth.”
T&E also supported the Girling proposal for a time-limited extension to the ‘Stop the Clock’ derogation. “An indefinite exemption would have been a blank cheque to ICAO and a reckless move given how little we know about how the global measure will operate, and how reliant it might be on the questionable practice of offsetting,” said Murphy.
Although supporting the extension, European airlines reiterated their call for the EU ETS to cease to apply to the sector after CORSIA starts in 2021.
“The European Commission’s proposal to continue the application of the aviation ETS only to flights within the European Economic Area is the right step for a transition to a global offsetting scheme to address aviation carbon emissions,” said Thomas Reynaert, Managing Director of trade association Airlines for Europe (A4E). “Member States have voted in favour of a single global scheme to address climate change – the European Parliament can’t ignore this without risking Europe’s credibility.
"It is now crucial that the Council comes to a swift conclusion; there can be no double burden for European airlines which puts them in a competitive disadvantage. During the upcoming trilogue meetings there needs to be certainty for European operators enabling them to focus their efforts on the implementation of the global deal to effectively tackle climate change.”