Europe backs down on international emissions trading

This story is sourced from Flight International
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Europe last week stepped back from a showdown with the rest of the aviation world by "temporarily" suspending plans to unilaterally impose its Emissions Trading System (ETS) on all flights serving the European Union from April 2013.

Brussels, citing indications from the International Civil Aviation Organisation's general assembly on 9 November that "many countries" appeared "prepared to move" for a global solution, declared that movement from ICAO represented a "long-sought opportunity that we must use".

However, intra-European flights will still be subject to the scheme.

Stressing that the European Commission was now focussed on creating "a positive atmosphere around the negotiations" and was thus prepared to defer trading scheme obligations for intercontinental flights as a "gesture of good faith", commission vice-president for climate action Connie Hedegaard added that a global "market-based mechanism" for controlling aviation emissions could be within reach.

The plan had faced fierce opposition - and possibly legal action from China and the USA - from critics who believe that the only legal, and workable, scheme would stem from a global, ICAO-led agreement. In December 2011 China warned the European Union it would not participate in the EU emissions trading scheme, which Brussels had declared compulsory for all flights serving Europe. Then, in early February this year, it ordered its airlines not to comply.

Later that month, some 25 nations - including China and the USA - met in Moscow to discuss joint action to defy the EU scheme. Earlier this month US Congress passed a bill, now awaiting President Obama's signature into law, enabling the transportation secretary to order American carriers not to participate in the scheme.

From 1 January this year all EU carriers and foreign operators serving the EU were supposed to be keeping records of total emissions from flights with any part of their journey touching Europe. The first payments for emissions exceeding a carrier's allowance were originally supposed to be due in April 2013.

Reactions to the suspension have been predictable. The Association of European Airlines has welcomed the scheme's suspension, as have the European Regions Airline Association and European charter carriers' trade organisation the International Air Carriers Association. The European Business Aviation Association has declared itself "reasonably satisfied", but objects to the EU's domestic application of emissions trading on the grounds that it should also be subject to global, rather than unilateral, agreement.

The US trade association Airlines for America (A4A) has not made a statement since the suspension, apparently having written off the EU scheme as irrelevant since the Congressional bill was approved. But A4A has gone on record as saying that the EU proposals "violate international law and US sovereignty". China and other states have said the same, darkly hinting not only at disobedience, but also reprisals.

At last week's Zhuhai air show, Airbus China president Laurence Barron said he hoped to get back to "business as usual" following the EU's latest move. "We hope now the suspension will be lifted, but it's too early now to say how things are going to evolve. We take this as a very positive development," he said.

Meanwhile, the EU makes clear that its preferred solution has always been a global market-based mechanism, but it says it became exasperated at the pace of progress towards that goal. As Hedegaard explained: "The EU has always been very clear: nobody wants an international framework tackling CO2 emissions from aviation more than we do. Our EU legislation is not standing in the way of this. On the contrary, our regulatory scheme was adopted after having waited many years for ICAO to progress. Now it seems that because of some countries' dislike of our scheme many countries are prepared to move in ICAO, and even to move towards a market-based mechanism at global level."

Although many observers regard the EU's move as claiming victory from a clear defeat, Hedegaard insists that "very good news came from the ICAO Council last Friday".

"Among other things it was agreed that a high-level policy group will be set up shortly, [and that] options for a regulatory market based mechanism will have to be reduced from three to one," he says. "In short, finally we have a chance to get an international regulation on emissions from aviation. This is a long-sought-for opportunity that we must use. This is progress! But actually to get there, a lot of tough negotiations lie ahead of us."

But she also reminded all parties that Europe intends to see through a deal - on global terms or unilaterally. "Let me be very clear," she says. "If this exercise does not deliver - and I hope it does - then needless to say we are back to where we are today with the EU ETS. Automatically."

She moved on to reclaim victory for European pressure: "We are creating this window of opportunity, this great chance. I can only recommend to all parties to engage urgently in taking this issue forward. Now it is the time for paving the way for strong decisions to be taken by the next ICAO General Assembly. The European Union will engage fully and will work closely with the ICAO leadership. We are convinced others will do as well."