EC trading scheme ambitions likely to inflame relations

Leaked details of a proposal to in­­­­clude flights operating into and out of Europe within an enhanced emissions trading scheme have put the European Union on a collision course with the USA.

The European Commission will on 20 December make a proposal to cap CO2 emissions for all airlines flying into and out of EU airports, requiring them to surrender allowances to cover their "greenhouse" gas emissions. If the legislation to include aviation in the existing emissions trading scheme passes the necessary procedural steps during next two to three years, it would mean all airlines will be treated equally, irrespective of where they are based.

This is likely to inflame transatlantic relations with the USA, which argues the scheme should be restricted to domestic EU flights. US Federal Aviation Administration assistant administrator for aviation policy, planning and environment, Sharon Pinkerton said last year US airlines should be exempt from the scheme and the issue should be addressed through the International Civil Aviation Organisation.

The proposed overall cap, which could be imposed from 2011, has been based on average aviation emissions between 2004-6. It is unsure whether pollution permits allocated under the scheme will only be used and therefore traded by the aviation sector.

The draft legislation is understood to propose harmonising allocation methods, with pollution limits set by the EC centrally in contrast with the current system where they are allocated at national level subject to Brussels approval.

The results of a specially commissioned impact study has determined that the scheme could raise ticket prices by up to €40 ($52) for long-haul flights.

The leaked details have generated concerns. The International Air Transport Association says: "We should not discount the ICAO process as the extraterritorial aspects of what the EC is proposing worry us. The draft has to be examined as there are still a lot of things still to be decided such as charging methods. The devil will be in the detail."

Jos Dings, director of the European Federation for Transport and Environment, says: "I am quite confident that the EC understands that there should be no ambiguity over allocation criteria. The current scheme covers large emitters such as power stations and heavy industries and is not so effective for aviation. Allocation criteria is highly relevant because if it is too relaxed a tool, permits become too cheap and have no effect."

The formal legislative proposal to integrate aviation in the scheme will need to be adopted by the European Parliament and member states at the EU Council of Ministers.

Source: Flight International