US demand for ICAO bilaterals could sink trading scheme

Europe suspects the USA is preparing to scupper any hope of establishing an effective emissions trading scheme by asking the International Civil Aviation Organisation to sanction a bureaucratic minefield of new bilateral agreements.

The European Commission, as expected, launched its own plan in December to include aviation in the European Union's existing emissions trading scheme despite industry concern over who should lead the move: UN agency ICAO or the EC.

ICAO is working on presenting its guidance on emissions trading schemes and multilateral solutions to address greenhouse gas emissions ready for its next general assembly in September, while the EC defends the decision to develop its own market-based solution with the claim that it is in line with ICAO's general endorsement of emissions trading and was developed after extensive consultation.

An EC source says: "The USA is suggesting [to ICAO] that any state that wants to include airlines other than their own will have to reach an agreement with that other state. That means 189 ICAO signatories signing individual agreements with each other. They are calling this a mutual agreement basis - what we would term a discriminatory application procedure. Hardly a workable option."

If sanctioned by the European Parliament and Council of Ministers, the European alternative will impose extra charges on both foreign and domestic carriers flying between European airports from 2011 and on all flights arriving at or departing from EU airports a year later.

Europe estimates that by 2020 carbon dioxide savings of 46% or 183 million tonnes could be achieved annually with tickets for intra-EU flights potentially rising by up to €9 ($12) as a result.

US airline trade body the Air Transport Association of America (ATAA) has hit back at the European proposal. The ATAA has branded the move as a "misguided" action that "clearly violates international laws and bilateral air service agreements".

Source: Flight International