Strasbourg vote sends mixed signals on ETS

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Temporary exemption of intercontinental flights from the controversial Emissions Trading System has received the backing of the European Parliament.

At a meeting in Strasbourg on 16 April, parliament voted by a large majority - 577 votes to 114, with 21 abstentions - to back a November 2012 decision by the European Commission to grant an exemption.

Peter Liese, a Danish member who drafted the bill, says the objective is to facilitate progress towards a global agreement on carbon trading within the International Civil Aviation Organisation.

The scheme's provision for requiring flights to or from non-EU destinations to surrender carbon credits from April 2013 has generated fierce objection, particularly from the USA, China and Russia. Those objections, which could have sparked legal action, were typically grounded in the scheme's unilateral imposition and encouraged the November move by climate-action commissioner Connie Hedegaard to "stop the clock" in hope of achieving some progress within ICAO, possibly including an agreement at its general assembly in autumn 2013. Hedegaard stressed at that time, however, that the move opened a "window of opportunity" of which all parties to ICAO needed to take advantage: "Let me be very clear: 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."

Echoing the Commission in Brussels, Liese says: "Aviation emissions have more or less doubled since 1990. They are increasing constantly.

"Objections from non-EU countries to being included in the ETS are not founded. We only stop the clock because we want to achieve a framework for a worldwide convention within the ICAO.

"We are not prepared to keep this derogation for more than one year."

The Association of European Airlines, whose members typically fly intra-Europe routes subject to ETS carbon-credit requirements, says it welcomes the Parliament's vote, adding: "We hope that this will put more pressure on ICAO and facilitate the progress to conclude a global solution."

The ETS, a carbon market created in 2005, set an overall emissions ceiling which is gradually being reduced over the long term. By 2020, emissions from industry sectors covered by the ETS will be 21% lower than in 2005.

Beneath this ceiling, companies receive or buy credits auctioned by member states. One credit corresponds to one tonne of CO2 emissions. Companies may also sell on unused credits. Limiting the supply of credits in intended to ensures that they have value, as the scheme is designed to reward companies that invest to limit emissions.

Separately, however, the parliament narrowly rejected a measure that would have temporarily restricted the flow of carbon credits into the ETS, a move which had the effect of pushing the European carbon market to a new lows around €2.60 ($3.40) per tonne.

That vote was carried by those who feared interfering with credit supply would hit confidence in the ETS, but supporters hoped "backloading" would hold prices up enough for the system to function properly - and spur industry to act on emissions.

Defeat of the measure was met with some dismay. Matthias Groote, an MEP from Denmark, said: "I deeply regret today's vote. It is the beginning of the repatriation of climate policy."

He added: "This kind of politics plays into the hands of climate sceptics. The rejection of the backloading proposal weakens the EU emissions trading system and puts our climate goals at risk."