EU Opts to Wait and See on Aviation Emissions

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By Stephen Gardner

Intercontinental flights departing from or landing in the European Union would continue to be exempted from the bloc’s emissions-trading system, at least until the details of an international scheme to control greenhouse gases from aviation become clearer, according to a draft European Commission regulation published Feb. 3.

The regulation would amend the EU ETS Directive (2003/87/EC) so that intra-EU flights continue to be covered by the ETS, but intercontinental flights would not be reincorporated while the International Civil Aviation Organization works out the specifics of its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

ICAO agreed in October 2016 that any emissions from aviation above the 2019–2020 level will after 2020 be compensated for by credits from projects that reduce emissions in other sectors, making growth in flights between countries theoretically carbon-neutral.

Until 2027, participation in CORSIA is voluntary, but many of the main aviation countries, including the EU countries and the United States, will take part. Some large countries, including India and Russia, will not participate in the voluntary stage, however.

A commission official speaking on condition of anonymity at a briefing in Brussels said CORSIA had been “agreed in its broad outlines,” and the commission would again review whether to include intercontinental flights in the ETS once the details of CORSIA become clearer.

European Parliament Opposition?

The commission’s proposal to continue to exempt long-haul flights from the ETS is likely to be opposed by some European Parliament lawmakers.

Under a 2008 EU directive approved by the Parliament (Directive 2008/101/EC) all flights arriving at or leaving EU airports were to be included in the ETS starting in 2012, meaning their emissions would be subject to caps and they would have to obtain additional carbon credits for any emissions above those caps.

Many countries, including China, India and the U.S., however, pressured the EU to exempt intercontinental flights pending ICAO talks on an international emissions-limiting mechanism. Ultimately, the EU adopted measures, known as “stop-the-clock,” under which intercontinental flights were not included in the ETS, though intra-EU flights are included.

A number of EU lawmakers have criticized CORSIA as an offsetting scheme that will not prevent growth of aviation emissions, and have said the EU should be prepared to end the stop-the-clock exemption.

Bas Eickhout, a Dutch Green member of the European Parliament, said in a statement Feb. 3 that CORSIA is “weaker than the ETS and many big countries such as China, India and Russia are already threatening to not participate. The EU should get on with its original goal of putting a fair price on aviation emissions, and delivering against its climate ambitions.”

Peter Liese, a German member of the European Parliament’s largest political group, the center-right European People’s Party, said, “there are a lot of problems with this CORSIA,” including whether or not offsets generate real emissions reductions. “Some colleagues say this is just a fake,” Liese said.

Compromise Proposal

“Intelligent compromise” would be to “continue to exempt intercontinental flights until 2021, but then reinstate them if the ICAO rules are not clear,” Liese added

From 2021, “we should also include flights to countries which, like Russia, refuse to join the ICAO agreement,” Liese said.

“If third countries just do nothing, why shouldn’t we introduce our scheme, which has been proved legally right?” he added. The EU Court of Justice in 2011 ruled in a case brought by a number of U.S. airlines that intercontinental flights of non-EU operators could be brought into the ETS.

The commission official told Bloomberg BNA that countries not participating in the voluntary stage of CORSIA, such as India and Russia, “have not objected to the system as such,” and would be covered by CORSIA when it becomes mandatory in 2027.

The ICAO decision to establish CORSIA was “a very credible commitment” that the commission wanted to support, and the commission therefore did not believe that the stop-the-clock exemption should be ended, the official said.

2018 Deadline

The official added that the European Parliament and the Council of the EU, which represents the governments of member countries, should agree on the stop-the-clock extension “by the end of the year or at least early 2018.”

Unless the extension is formally approved by then, intercontinental flights would automatically be reincorporated in the ETS, and would in spring 2018 have to account for their emissions during 2017 and surrender sufficient carbon permits.

The commission proposal was “a good basis for deliberations in the Parliament, but we will examine it very closely and, in particular, continue to exert pressure for ambitious climate protection measures in intercontinental flights,” Liese said.

Simon McNamara, director general of industry group the European Regions Airline Association, said airlines faced being covered by both the ETS and CORSIA for intra-EU flights: “We would like to see a further commitment that ultimately the EU ETS will be replaced by CORSIA.”

Tightening Emissions Cap

Intra-EU aviation in subject to a emissions cap through 2020 that is about 5 percent below the sector’s 2004–2006 average annual emissions.

The commission’s regulation also would clarify that this cap would reduce by 2.2 percent per year from 2021, in line with the annual reduction required of power stations and heavy industry under the ETS.

Bill Hemmings, director of aviation at advocacy group Transport & Environment, said “reducing aviation’s emissions cap fixes a bizarre situation where we had a cap-and-trade system with no declining cap.”

Liese said the tightening of the cap for aviation from 2021 was welcome because the current system in which the cap does not decline is “unfair to other sectors, like the steel industry, where many people are worried about their jobs.”

To contact the reporter on this story: Stephen Gardner in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com

For More Information

The draft European Commission regulation on aviation in the ETS is available at http://src.bna.com/lW3.

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