European Parliament’s environment committee passes tougher aviation ETS proposals from 2013
Avril Doyle, MEP, rapporteur on EU ETS review (photo: European Parliament)
Mon 13 Oct 2008 – The European Parliament’s environment committee (ENVI) last week approved a package of measures to stiffen the EU Emissions Trading Scheme (ETS) from 2013 as part of a general review of climate policy by the European Commission. The aviation industry has fared marginally worse than other sectors with MEPs proposing the allocation of free emission allowances be cut from 85% in 2012 to 80% in 2013 – the others would be entitled to 85% in 2013 – with a total phase-out for all industries by 2020.
The 85% free allocation of allowances when aviation joins the ETS in 2012 was agreed by MEPs just three months ago when the directive was passed by the Parliament and Council. In another adopted amendment by ENVI, the 95% cap on emissions based on the average emissions between 2004 and 2006 will be reduced by a linear factor each year from January 2013.
Both measures had been flagged for review when the original directive on aviation was agreed in the summer but the vote has brought an angry response from European airline and airport representatives.
“We are dismayed that the ENVI committee has again taken the opportunity to inflict more damaging and extreme measures on the aviation industry, especially at a time of great economic uncertainty for the sector, airline bankruptcies and weakening demand,” said Sylviane Lust, Director General of the International Air Carrier Association (IACA), which represents 40 airlines serving the leisure industry.
“By increasing what is already a punitive auctioning amount of 15% in 2012 to 100% in 2020 adds insult to injury to an industry that is facing severe difficulties. Aviation continues to come off worse in this questionable process. The fact that these changes are not supported by an impact assessment nor justified on the basis of experience highlights the arbitrary nature of the whole process.
“We urge the Council to see reason and stick to what was agreed to in the summer.”
The Secretary General of the Association of European Airlines (AEA), Ulrich Schulte-Strathaus, said: “We have the impression that some MEPs are so dogmatic that they have lost touch with reality. The world is facing the biggest fiscal crisis ever and is heading into a deep recession, both of which will alter the face of entire economies. And yet these politicians maintain a fixation that airlines will all grow and grow, and that therefore the levels of auctioning of permits should be raised even above that for other industries, and the cap for free allowances reduced – and all that without the slightest impact assessment.”
The European Regions Airline Association (ERA) estimates that imposing 100% auctioning of permits by 2020 will add a further €6 million ($8.2m) to a typical regional carrier’s costs. Mike Ambrose, Director General, criticized the ENVI vote for imposing additional burdens on an industry already crippled with soaring costs and reduced consumer confidence.
“The fact that more than 1,100 amendments to the ‘mother’ [EU ETS] directive were proposed without any form of impact assessment when so much is at risk – company survival, jobs, international access for Europe’s regions – is not just grossly unacceptable, it is thoroughly irresponsible.
“States, regulators and politicians need to recognize that we are not far off from a situation in which investment in air transport development will cease because the cost of uncontrolled additional regulations will have changed the balance from ‘prudent investment’ to ‘lottery’. Our challenge now is to make governments accept that aviation is an essential tool for helping to rebuild European economies.”
At their AGM last week, ERA members passed a resolution calling on the European Commission, MEPs and the European Council of Ministers to ensure that changes to the EU ETS do not further amend the scheme for air transport already agreed by the European Parliament.
Representing Europe’s airports, ACI Europe said it had supported the initial European Commission proposals on the ETS but said the July agreement had failed to meet the test of environmental viability and economic effectiveness, and the latest vote “only makes things worse”.
“Having already committed to reducing their carbon emissions with the ultimate goal of becoming carbon neutral, Europe’s airports are mindful of the need for aviation to actively address its impact on climate change. However, these latest amendments to the ETS no longer treat aviation as ‘just another industry’ – they actually seek to bully it.”
The amendments had been proposed by Dr Peter Liese, the rapporteur who steered the inclusion of aviation into the ETS. Two other amendments from Green MEPs were defeated. The first proposed that aviation was treated the same as the power industry and receive no free allowances, justified on the grounds that the costs of allowances could be passed on to the consumer and airlines could also make windfall profits. The other proposed a two-times multiplier be applied to take account of non-CO2 aviation greenhouse gas emissions like NOx.
MEPs called on the Commission to submit “as soon as possible legislative proposals to incorporate the shipping sector into the scheme by 2013” and to specify by 2013 the date for the inclusion of freight transport by road.
MEPs also want auction revenues to be used for climate change protection measures, with half the money earmarked for developing countries. However, Parliament’s rapporteur on the ETS post-2013 review, Avril Doyle, feared a “battle royale” with the Council over the issue.
The review of the ETS is part of plans to reduce the EU’s emissions of CO2 and related greenhouse gases by 20% by 2020, compared with 1990, with a commitment of a 30% cut if an international agreement can be reached with other developed nations.
“The committee’s vote is another critical step in the process of equipping the European Union with the concrete measures needed to reach its ambitious targets for reducing greenhouse gas emissions and increasing renewable energy,” said EU Environment Commissioner, Stavros Dimas, welcoming the vote. “It takes us closer to our goal of reaching a final agreement between Parliament and Council in December so that the EU can take this to the UN climate conference in Poznan, Poland.
“It is important that the committee, while approving a range of amendments, has voted to keep the broad architecture of our proposals unchanged.”