The CAA has launched its consultation on the implementation of its new statutory duty to provide information. The various consultation papers can be found on the CAA’s website. The CAA says that under the Civil Aviation Act 2012, it has “new duties and powers to provide information to users of air transport to assist them in comparing services and facilities, and to the general public about the environmental impact of aviation.” However, it seems that the CAA is adopting a minimalist and inadequate approach to the provision of environmental information – which is disappointing. It had been hoped that the CAA might have agreed to take its new duty to provide environmental information more seriously. However, the CAA is asking if it should develop a standardised methodology for calculating CO2 emissions – more accurate than those offered by airlines – and presenting it to consumers so they can assess flight emissions. The consultation closes on 31 August and the CAA will publish its final Statement of Policy in Winter 2013.
CAA Consultation – Better Information about UK aviation: the CAA’s new publication duties
Under the Civil Aviation Act 2012, the CAA has new duties and powers to provide information to users of air transport to assist them in comparing services and facilities, and to the general public about the environmental impact of aviation. The CAA is consulting on its proposed Statement of Policy for the use of its information powers.
Below are some of the mentions of the environment in the
The Civil Aviation Act 2012 provides that:
On the environment, the CAA must publish, or arrange for others
to publish, such information as it feels is appropriate relating to the
environmental effects of civil aviation in the UK. Again, the CAA may
publish guidance with a view to mitigating adverse environmental
- – - – -
It is the second principle that has most bearing on the CAA’s new
duty to provide information about aviation services and facilities to
consumers, and information about the environmental impact of aviation
both to consumers and the public at large.
- – - – -
….. to put more, and more accessible and comprehensible, information in the public domain about the effects of aviation on the environment;
indirectly (through informing people and potentially creating pressure
on industry) and directly (through guidance and advice) to improve
performance in services and reduce adverse environmental effects.
- – - – -
…… to improve environmental performance through more efficient use of airspace and make an efficient contribution to reducing the aviation industry’s environmental impacts;
- – - – -
CAA and the environment
The CAA considers information as a vital part of its work to enhance
incentives and metrics in its effort to improve the environmental
sustainability of the aviation sector. We anticipate that the provision of
information on the environment will help to encourage consumers to
factor the environment into their choices and incentivise the sector to
improve its environmental performance.
In 2010 the CAA published CAA and the Environment5. This document
predated the Civil Aviation Act 2012, but captured the CAA’s work in
preparation for the CAA’s new information powers receiving Royal
Assent. Much of the work set out has been completed as part of the
process of developing this Statement of Policy, and on environmental
information, the CAA and the Environment programme will continue to
oversee this work as it is taken forward.
- – - – -
The Accent research also found that consumers place lower level
of importance on environmental information than information about
services and facilities available to them when choosing a flight. Only
13% of consumers stated that having access to information about the
environmental impact of the flight they were booking (including carbon)
is “very important” and 25% of consumers viewed this information as
Regarding environmental information, on the basis of the literature
reviewed, MVA concluded that broad community tolerance of
civil aviation requires confidence that all options for managing the
environmental impacts of aviation – e.g. aircraft noise, pollution and
other concerns – have been examined and an equitable outcome
adopted. UK airports are encouraged to provide their communities
with ready access to information concerning airport operations, flight
paths and noise management strategies. With recent advances in flight
tracking, and the growth of the internet, it is relatively simple to provide
ready access to aircraft noise information by showing the location of
flight paths and the numbers and times of aircraft movements, as well as sound levels for single events.
- – - – -
Most people wanted information so that they could make more
informed judgements on environmental issues both locally and
nationally. They also wanted information so that they could judge
whether aircraft activity had increased, or not; and to provide a
benchmark in case there was a push for expansion at a nearby airport.
A third reason for wanting environmental information was so that they
could judge for themselves the impact of moving near to an airport in
- – - -
The UK’s Civil Aircraft Noise Contour Model is employed by the CAA’s
Environmental Research and Consultancy Department (ERCD) to
produce noise contour maps for some UK airports. Noise contours for
Heathrow, Gatwick and Stansted, produced by ERCD under contract,
are available from the Department for Transport website27.
- – - – -
Almost every major airport publishes some type of annual
environmental impact statement, either as a standalone document,
or as part of a wider annual report. For example, both Heathrow29
and Bristol30 airports make information about their environmental
impact available to consumers, but, as they contain slightly
different information, set out in different formats, and make use of
different metrics in some instances, the information provided is not
easily comparable. Other airports publish little data on their actual
environmental impact, but do make available information about their
environmental policies (e.g. London Luton Airport31)
3.67 On the airline side, a lack of standardised reporting also makes direct
comparison of environmental impact difficult or impossible. Reporting
tends to be in different areas, with some airlines publishing specific
environmental reports each year while others cover environmental
performance as part of annual reports or Corporate Social Responsibility statements.
———– and much more……
There is one question on environment:
Q.3 Do you agree with the findings of the evidence base that the CAA has
provided in support of its view that the general public would benefit from
the provision of more information about the environmental impact of aviation
(including that from other regulators and government agencies, summarised in
On carbon emissions it asks:
Do you agree that Option 3 is the most appropriate way to aid the
standardisation of CO2 information for air travellers? Please provide your
[Option 3 is “The CAA to develop a standardised methodology for calculating CO2 emissions and presenting it to consumers” with all the detail about it on Page 99 of Consultation on the CAA;s new publication duties
see also Page 14 of the CAA consultation summary on carbon emissions calculator
Read more »
Carbon Market Watch reports that recent data by the European Commission reveals for the first time the choice of offsets used by airlines during the first compliance period in the EU ETS. This shows that in 2012 airlines favoured using offset credits from HFC-23 and N2O industrial gas destruction projects, credits meanwhile banned in the EU ETS since May 2013. They are just the cheapest available. Airlines used almost 11 million offsets, 5.6 million and 5.3 million coming from the Clean Development Mechanism and Joint Implementation respectively. The ten largest emitters amongst the aircraft operators in the EU, including Lufthansa, Ryanair and Easyjet, were responsible for almost half of all offsets used. Even though offsets with environmental and social benefits are readily available at cheap prices, the airlines chose the cheapest offsets which lack environmental integrity. NGOs are demanding strict quality restrictions for any future global offsetting mechanism under ICAO. Airlines should be choosing offsets with high environmental and social integrity.
New data shows airlines favour industrial gas projects to offset emissions
Bonn, 7 June 2013 (Carbon Market Watch) http://carbonmarketwatch.org/
Last week, the International Air Transport Association (IATA) called on the International Civil Aviation Organisation (ICAO) Assembly to agree on a global carbon offsetting scheme to take effect in 2020. link
Recent data by the European Commission reveals for the first time the choice of offsets used by airlines during the first compliance period in the European Emissions Trading Scheme (EU ETS).
The data shows that in 2012 airlines favoured using offset credits from HFC-23 and N2O industrial gas destruction projects, credits meanwhile banned in the EU ETS.
NGOs demand a limited access and strict quality restrictions for any future global offsetting mechanism under ICAO.
In May 2013, the European Commission released for the first time data on carbon offsets used by 1188 airline operators covered by the EU’s Emissions Trading Scheme (EU ETS) in 2012. From the 12.5 million offsets allowed to use for compliance, airlines used almost 11 million offsets, 5.6 million and 5.3 million coming from the Clean Development Mechanism (CDM) and Joint Implementation (JI) respectively.
The ten largest emitters amongst the aircraft operators in the EU, including Lufthansa, Ryanair and Easyjet, were responsible for 5.12 million offsets – almost half of all offsets used.
Although more than 6.000 CDM projects and more than 600 JI projects are currently approved under the UN’s mechanisms, the offsets originate from only 45 CDM and 16 JI projects.
One third of all CDM offset credits used by the largest ten operators, come from 9 offset projects that destroy the waste gas HFC-23. HFC-23 projects were the largest originators of CDM offset credits: 400.000 and 380.000 offset credits originating from Chinese HFC-23 projects were sold to Easyjet and British Airways respectively.
Easyjet, Lufthansa and Air France also bought 420.000 credits from three N2O adipic acid projects in China and South Korea.
Credits from HFC-23 and N20 (adipic acid) projects have been banned from the EU ETS because of their lack of environmental integrity effective May 2013, a decision which was well known to airlines as early as 2010.
“Even though offsets with environmental and social benefits are readily available at cheap prices, the new data shows that airlines chose offsets from industrial gas projects even though they were to be banned for their lack of environmental integrity simply because they were the cheapest” said Eva Filzmoser, Director of Carbon Market Watch.
“This shows that we cannot trust airlines to have regard for environmental integrity when choosing offsets. It is therefore essential that limited access and stringent quality restrictions for offsets will be required in any future ICAO scheme to filter out substandard offset credits that harm the climate”.
The biggest emitters amongst airline operators in 2012 were Lufthansa and Ryanair. Lufthansa bought 650.000 offset credits from a project that claims to have reduced fugitive associated petroleum gas between 2007 and 2011 at the Priobskoe oil field in Russia, one of the largest oil fields in the world. This project which is registered under the Joint Implementation’s so called “track 1”, which is heavily and widely criticized for its lack of international oversight, sold the largest chunk of credits from one single project.
Other projects that sold credits to Lufthansa include a JI project that destroys HFC-23 and a CDM project that destroys N2O from adipic acid production in China, both project types now banned from the EU ETS.“It is hypocritical that Lufthansa encourages their clients to offset their emissions with sustainable projects while behind the backdoor it is using the cheapest offsets that clearly lack environmental integrity” commented Sabine Minninger, Senior Policy Advisor on climate and energy for Bread for the World.
“To live up to their claims to be sustainable, airlines must invest in credits with high environmental and social integrity themselves”.“Experience so far from airline behaviour in the EU ETS clearly demonstrates that offsets cannot be the complete solution in any market-based measure to reduce aviation emissions” said Bill Hemmings aviation manager at Transport and Environment. “IATA needs to seriously rethink its position”.
More Information: More Information:
Commission data CERs and ERUs surrendered under EU ETS (16 May 2013)
Policy Brief “Turbulences Ahead: Market Based Measures to Reduce Aviation Emissions” (06.13)
Policy Brief “International Aviation: Addressing emissions while respecting equity issues” (05.13)
Contact: Eva Filzmoser – Director, Carbon Market Watch
Read more »
IATA, the trade body comprising 240 airlines worldwide, has finally acknowledged the need for a global market–based measure (MBM) to reduce aviation’s contribution to climate change. IATA called on their airline members to encourage their governments to agree at this year’s ICAO Assembly on a global carbon offsetting measure to take effect in 2020. However, IATA only endorses such a global scheme ‘as opposed to a patchwork of unilateral national and/or regional policy measures’. Environmental groups working on aviation emissions said though the IATA statement is welcome, rather than their usual position that better air traffic control, better planes and biofuels alone can solve the problem. However, it kicks the ball in the long grass, until after 2020, and sets out a string of unworkable conditions. It rules out the EU ETS as a stepping stone, as well as the raising of revenues, and impacts on traffic volume, which are inherent to any market-based measure. It also relies solely on out-of-sector offsets rather than real emissions reductions within the aviation sector itself. It merely compensates these emissions through investment in reduction projects in other sectors.
Airlines’ call for global emissions deal not convincing
3.6.2013 (T&E and AEF. Transport & Environment and Aviation Environment Federation)
The International Air Transport Association (IATA), a trade body comprising 240 airlines worldwide, today finally acknowledged the need for a global market–based measure to reduce aviation’s contribution to climate change. Link IATA called on their airline members to encourage their governments to agree at this year’s International Civil Aviation Organisation (ICAO) Assembly on a global carbon offsetting measure to take effect in 2020.
However, the aviation trade body only endorses such a global scheme ‘as opposed to a patchwork of unilateral national and/or regional policy measures’, presumably continuing industry’s opposition to the only international market-based measure actually in place, the sector’s inclusion in Europe’s Emissions Trading Scheme (ETS).
Bill Hemmings, aviation manager at Transport & Environment, commented: “Today’s IATA resolution represents a welcome departure from their historical position that better air traffic control, better planes and biofuels alone can solve the problem. However, it kicks the ball in the long grass, until after 2020, and sets out a string of unworkable conditions. It rules out the EU ETS as a stepping stone, as well as the raising of revenues, and impacts on traffic volume, which are inherent to any market-based measure. Finally it relies solely on out-of-sector offsets rather than real emissions reductions within aviation.”
Tim Johnson, Director at Aviation Environment Federation, said: “ICAO members should see it as an encouragement to come up with an effective scheme at the Assembly, not as a blueprint for such a scheme.”
US environmental groups echo aviation industry’s call for ICAO to adopt global emissions cap this year
Environmental Defense Fund and Natural Resources Defense Council today echoed the new call by the International Air Transport Association (IATA), a trade body comprising 240 airlines worldwide, for governments to agree this September on a single global cap on emissions of international flights to take effect in 2020.
NGOs today echoed IATA’s call for an agreement this year on a global cap on aviation emissions. Photo credit: Flickr user Mike Miley
The NGOs issued their call in response to a resolution, adopted today at IATA’s annual general meeting in Cape Town, that urges its member airlines to “strongly encourage governments” to adopt such a single global measure at this year’s International Civil Aviation Organisation (ICAO) Assembly.
The resolution gives governments a set of principles on how governments could 1) establish procedures for a single market-based measure, and 2) integrate a single market-based measure as part of an overall package of measures to achieve the industry’s goal of having “carbon-neutral growth by 2020.”
In a statement today, Annie Petsonk, EDF’s International Counsel, said:
IATA has opened the door, now it is time for governments to walk through it this September. This is the signal that governments have been seeking.
Not all the elements offered in IATA’s resolution will fully address aviation’s contribution to climate change, the NGOs cautioned. Our colleagues at Transport & Environment and Aviation Environment Federation have issued their own comments on the resolution, as has NRDC’s Jake Schmidt.
In advance of IATA’s general meeting in Cape Town, 11 global NGOs sent a letter to IATA Director General Tony Tyler calling on IATA to act on market-based measures. The environment, development, community and science groups said in the letter:
To be credible, such measures must include targets compatible with climate science, strong provisions to ensure the environmental credibility of the traded units, limited access to offsets and strict provisions to ensure compliance.
Aviation is already the world’s seventh largest polluter, and if emissions from the industry are left unregulated, they’re expected to double by 2030.
Carbon Market Watch
Scrutinising carbon markets & advocating fair, effective climate protection
Press Statement: Airlines favour wrong choice to reduce emissions
3 June 2013, Brussels – Today, the International Air Transport Association (IATA) acknowledged the need for market-based measures to reduce the aviation sector’s contribution to climate change. This should be considered as part of a broader package of measures, including improvements in technology, operations and infrastructure. 
However, the airlines highlighted their preferences over a global carbon offsetting scheme compared to alternative schemes, such as cap-and-trade schemes.
Carbon Market Watch Director Eva Filzmoser commented “Today’s IATA Resolution is a welcome step towards regulating airlines’ contribution to climate change. However, a global carbon offsetting scheme is the wrong choice, because it does not lead to emissions reductions in the aviation sector itself. It merely compensates these emissions through investment in reduction projects elsewhere. Only a cap-and-trade scheme with a stringent cap and a limit on the use of offsets will create sufficient incentives for essential emission reductions in the aviation sector itself.”
The Resolution adopted today calls on the world’s governments to agree at this year’s International Civil Aviation Organisation (ICAO) Assembly to a global carbon offsetting scheme to take effect in 2020.
Notes to Editors:
 IATA announcement: http://ht.ly/lEbhp
Green groups demand aviation leaders agree carbon-cutting measures
A coalition of 11 NGOs write to IATA chief warning ‘there is no room for delay’ in advancing a global agreement ahead of key summit
By Will Nichols
3 Jun 2013
Aviation industry leaders meeting this week have been urged to endorse measures to cut emissions from airlines and take a step towards agreeing a binding global deal to tackle the industry’s carbon footprint.
A coalition of 11 environmental groups, including WWF, the Environment Defense Fund, the Natural Resources Defense Council (NRDC), and Union of Concerned Scientists, have written to Tony Tyler, director general and chief executive of trade body the International Air Transport Association (IATA), warning “there can be no room for further delay”.
The industry’s efforts to reduce emissions through technical and operational measures are laudable, but insufficient, the groups say in the letter, which was also signed by the Sierra Club, Transport & Environment, the Aviation Environment Federation, and Carbon Market Watch.
The groups are calling on IATA members meeting this week in South Africa to support proposals for a market-based mechanism for reducing emissions, such as plans to introduce a global cap-and-trade system.
They say the development of some form of carbon pricing mechanism for airlines would not only tackle the three per cent of global climate pollution aviation is thought to contribute, but would also tackle concerns over fragmented, regional emissions policies springing up, which carriers fear will push up compliance costs and ticket prices.
The letter says that by endorsing a market-based measure, IATA can send a strong signal to the International Civil Aviation Organisation (ICAO), the UN-body that is due to meet later this year to resume talks on a global emissions deal.
“International efforts to address aviation’s contribution to climate change are at a cross-road,” the letter reads. “Airlines can help countries secure agreement this year to implement a global market-based measure to significantly cut aviation’s greenhouse gas pollution or they can choose to let others act domestically to control aviation’s pollution.
“We urge IATA to use its annual meeting in Cape Town, South Africa to send a resounding signal that it wants an agreement this year to implement a global market-based measure that significantly addresses aviation’s pollution.”
Signs are emerging that IATA is close to doing just that. Last week, Jos Delbeke, director general for climate at the European Commission, told news agency Bloomberg he expected to see progress at the meeting.
“I’m going to be in Cape Town next week where IATA will make a number of important decisions on carbon reductions,” Delbeke said. “We don’t know the detail of it, but the industry may be more forthcoming compared to what we anticipated two years ago.”
The pressure is building on ICAO to approve one of the four proposals for managing emissions that it is currently considering: offsetting, offsetting with a revenue generating mechanism, a cap-and-trade scheme, and a fuel levy with offsetting.
After an ICAO meeting towards the end of last year, the EU suspended its regulations charging foreign airlines for carbon emitted during flights in and out of its airports in a move designed to head off the risk of a trade war with other jurisdictions and help expedite a global agreement at this year’s conference that can then be implemented at its next summit in three years’ time.
In theory, the charges will snap back into place if progress is not made at ICAO’s conference this year, but Brussels will inevitably face calls to postpone the re-introduction of emissions charging indefinitely given the frenzied lobbying and threats of retaliatory action seen prior to the regulation’s introduction last year.
The US and China in particular expressed anger at the EU’s standalone policy, with Congress approving a bill expressly forbidding its airlines from participating in the EU’s emissions trading scheme. Beijing, meanwhile, allegedly froze a multi-billion euro Airbus order in protest, only completing the deal once the rules were suspended.
As such both IATA and ICAO are aware that significant progress towards some sort of international agreement will have to be made in the coming months or else the risk of a full-blown trade war is likely to rematerialise.
Historic Agreement on Carbon-Neutral Growth
Download video (MP4)
Cape Town – The International Air Transport Association (IATA) 69th Annual General Meeting (AGM) overwhelmingly endorsed a resolution on “Implementation of the Aviation Carbon-Neutral Growth (CNG2020) Strategy“ (pdf).
The resolution provides governments with a set of principles on how governments could:
- Establish procedures for a single market-based measure (MBM)
- Integrate a single MBM as part of an overall package of measures to achieve CNG2020
“Airlines are committed to working with governments to build a solid platform for the future sustainable development of aviation. Today, they have come together to recommend to governments the adoption of a single MBM for aviation and provide suggestions on how it might be applied to individual carriers. Now the ball is in the court of governments. We will be strongly supporting their leadership as they seek a global agreement through the International Civil Aviation Organization (ICAO) at its Assembly later this year,” said Tony Tyler, IATA’s Director General and CEO.
Environment will be at the top of the agenda for the 38th ICAO Assembly in September. The aviation industry urgently needs governments to agree, through ICAO, a global approach to managing aviation’s carbon emissions, including a single global MBM. IATA member airlines agreed that a single mandatory carbon offsetting scheme would be the simplest and most effective option for an MBM.
“For governments, finding agreement on MBMs will not be easy. It was difficult enough for the airlines, given the potential financial implications. Bridging the very different circumstances of fast growing airlines in emerging markets and those in more mature markets required a flexible approach and mutual understanding. But sustainability is aviation’s license to grow. With that understanding and a firm focus on the future, airlines found an historic agreement. This industry agreement should help to relieve the political gridlock on this important issue and give governments momentum and a set of tools as they continue their difficult deliberations,” said Tyler.
Aviation is the first industry to suggest a global approach to the application of a single MBM to manage its climate change impact. This keeps aviation in the forefront of industries on managing carbon emissions. It was also the first to agree global targets. These are: improving fuel efficiency by 1.5% annually to 2020, capping net emissions with CNG2020, and cutting emissions in half by 2050 compared to 2005. And it was also the first to agree on a global strategy to achieve them.
An MBM is one of the four pillars of the aviation industry’s united strategy on climate change. Improvements in technology, operations and infrastructure will deliver the long-term solution for aviation’s sustainability. “Today’s agreement focuses on a single global MBM as part of a basket of measures. A single MBM will be critical in the short-term as a gap-filler until technology, operations and infrastructure solutions mature. So we cannot take our eye off the ball on developing sustainable low-carbon alternative fuels, achieving the Single European Sky or the host of other programs that will improve aviation’s environmental performance,” said Tyler.
An MBM should be designed to deliver real emissions reductions, not revenue generation for governments. The principles agreed apply to emissions growth post-2020. “Airlines are delivering results against their climate change commitments. For example, we are on track to achieve our 1.5% average annual fuel efficiency target. We need governments to be serious partners as well. Developing an MBM must not become an excuse for revenue generation by cash-strapped governments, or for avoiding incentivizing investments in new technologies and sustainable low-carbon alternative fuels,” said Tyler.
A summary of the principles of the resolution includes the following:
- Setting the industry and individual carrier baselines using the average annual total emissions over the period 2018–2020;
- Agreeing to provisions/adjustments for- Recognizing early movers, benchmarked for 2005–2020 with a sunset by 2025
- Accommodating new market entrants for their initial years of operation
- Fast growing carriers
- Adopting an equitable balance for determining individual carrier responsibilities that includes consideration of:- An ‘emissions share’ element (reflecting the carrier’s share of total industry emissions) and
- A post-2020 ‘growth’ element (reflecting the carrier’s growth above baseline emissions)
- Reporting and verification of carbon emissions that is:- Based on a global standard to be developed by ICAO
- Simple and scalable based on the size and complexity of the operator
- Instituting a periodic CNG2020 performance review cycle that revises individual elements and parameters as appropriate.#
Notes for Editors:
Read more »
Officials from 17 countries are working with ICAO to shape an agreement acceptable to its 191 member countries to reduce aviation’s carbon footprint through market based measures (MBMs). ICAO needs to agree on progress by its September Assembly meeting. Progress has been glacially slow over the past decade, and there appears to be no real progress now. A high-level group (HGCC) of senior officials and negotiators was set up last November to accelerate discussions and find compromises between states on MBMs, but its process has now ended. It appears that very little progress had been made and there were significant diverging views. GreenAir reports that Russia’s representative firmly rejected MBMs and even called for a reassessment of ICAO’s 2% annual fuel efficiency goal. Some ICAO representatives remained mildly optimistic that some form of an agreement could be reached by ICAO Assembly by September, with further progress towards a global scheme being achieved by 2016. It appears a number of differences between ICAO member states in key areas have not been resolved by the HGCC and time is running out for full consensus by the September Assembly – realistically it seems unlikely..
Divergent views among ICAO member states leaves substantive MBM agreement by 2013 hanging in the balance
24.5.2013 (GreenAir online)
A very comprehensive and thorough article – some extracts below – full article at http://www.greenaironline.com/news.php?viewStory=1694
Two conferences in Montreal last week provided an opportunity for ICAO Council members to publicly explain their respective country’s position on current attempts to form an agreement on the application of market-based measures (MBMs) to limit the growth of international aviation carbon emissions.
With the high-level group process now formally ended, Australia’s representative on the Council and Chair of the Council’s Air Transport Committee, Kerryn Macaulay, told delegates at the industry’s Air Transport Action Group (ATAG) Workshop that very little progress had been made and there were significant diverging views.
At the subsequent ICAO Aviation and Climate Change Symposium, Russia’s representative firmly rejected MBMs and even called for a reassessment of ICAO’s 2% annual fuel efficiency goal.
Other speakers, however, stated their optimism that some form of an agreement could be reached by the ICAO Assembly this coming autumn with further progress towards a global scheme being achieved by 2016.
Following a Council meeting last November, a decision was taken to establish the climate change high-level group (HGCC) of senior officials and negotiators to accelerate discussions and find compromises between states on MBMs.
This was seen by the EU as a positive enough development to allow it to temporarily suspend the application of its emissions scheme to intercontinental flights to and from Europe.
However, it appears a number of differences between ICAO member states in key areas have not been resolved by the HGCC and time is running out for full consensus by the time of the Assembly.
(Macaulay) …told delegates at the ATAG Workshop there were three main areas where opinions on the application of MBMs differed:
- Geographic scope – a number of governments have sensitivities over the sovereignty issue;
- Who the participants should be; and
- Addressing the ‘special circumstances and respective capabilities’ of developing states principle.
Macaulay said a report from the HGCC and an amended version of the draft resolution would be discussed at the next meeting of the Air Transport Committee slated for June 4. She said the meeting would attempt to find more common ground, reduce the number of square brackets and make recommendations to the Council for its meeting at the end of June, but described her Committee role on the issue as “chief herder of cats”.
She was not optimistic that many of the differing views would be narrowed down by the conclusion of the Council meeting but, she said, “we will work on the resolution right up to the start of the Assembly if need be.”
Cautioned Macaulay: “It is possible the resolution may go to the Assembly with not all the elements settled.”
As no further meetings have been scheduled, the future of the HGCC was uncertain, she said, and depended on guidance from the ICAO Council President and the views of the Council itself.
A global MBM was but one of a host of measures, said Elina Bardram, Head of the Aviation and Maritime Unit, International Carbon Markets, at the European Commission. “We would like nothing more than for MBMs to become obsolete but this won’t happen without breakthrough technologies – that is just the reality,” she told delegates. “Also, these technologies may not be economically viable for the industry. MBMs do offer a flexible and effective mechanism for industry to contribute without compromising growth. That’s the beauty of an MBM and that’s why the EU introduced its emissions trading scheme.”
The full, very comprehensive, article from GreenAir online is at http://www.greenaironline.com/news.php?viewStory=1694
Aviation officials see global emissions deal possible by 2020
By Robert Evans
GENEVA (Reuters) – Senior officials from business and commercial aviation voiced cautious optimism that a long-sought worldwide framework to reduce aviation’s carbon emissions could be in place by 2020.
And a key negotiator for the European Union’s Executive Commission, which has been the focus of anger from many other countries over its emissions trading scheme (ETS), said she hoped a road map towards a pact would be agreed by this autumn.
The comments came on Tuesday at a discussion on prospects for a global deal eliminating the threat of regional or national rules, which aviation leaders say would be disastrous, at an annual European show for the international aviation business sector, EBACE.
“Eventually I think we’ll get there,” said Kurt Edwards of the International Business Aviation Council, IBAC, which groups plane and equipment makers and service providers for the multibillion dollar sector.
Guy Visele of the European Business Aviation Association, EBAA, agreed but argued that meanwhile his industry – which [says - as it always does - that it only]
creates a tiny fraction of the emissions which contribute to global warming – should be treated less harshly by the EU. [Every sector only produces a "tiny fraction" of the world's CO2. The issue is that collectively they all add up to a huge total. See World Resources Institute chart . On that basis, aviation comes out as around 1.7%, and the cement industry is only 5% and all of road transport is only 10.5%. A more realistic estimate of the impact of global aviation is 4.9%. see link page 1
Business aviation – in which a major role is played by big manufacturers like Boeing Europe’s Airbus, Canada’s Bombardier and Brazil’s Embraer - has been seen by many politicians as a playground for the super-rich.
But its advocates say the industry, in the doldrums since the financial crisis of 2008/9 after a decade-long boom, plays a major role in world trade and that over 80% of its operations involve moving business people rather than elite individuals.
The EU, committed to combat the climate change blamed on carbon emissions, created an international storm when it said it would impose its rules from January this year on all flights to and from its territory.
China and India, among others, ordered their carriers not to comply and the United States said it would consider retaliatory action.
EU MEASURES SUSPENDED
The EU suspended implementation of the scheme, which would have compelled commercial and business aviation carriers from anywhere in the world to purchase offset credits for the carbon they emit over a set baseline for any flight arriving or departing European airspace.
At Tuesday’s EBACE discussion, Elina Bardram of the European Commission’s climate action division said Brussels remained committed to dialogue as the best way to achieve global agreement by 2020 through the United Nations’ International Civil Aviation Organization. [ie. said nothing].
It has already suspended enforcement of its own interim scheme pending the outcome of negotiations at ICAO’s triennial assembly from September 24 to October 4, but has not yet made clear what it will do if those end in deadlock.
“The path remains challenging but we can remain confident that a road map will be agreed at ICAO if political rhetoric can be dropped,” she said.
Officials from 17 countries are working with Montreal-based ICAO to shape an agreement acceptable to its 191 member countries to reduce aviation’s carbon footprint through market measures.
Paul Steele, environmental specialist for the commercial airlines’ International Air Transport Association, IATA, and head of the Geneva-based Air Transport Action Group, ATAG, said considerable progress had been made in the ICAO talks but quick agreement was unlikely.
“We’re not going to get there this year. With 191 countries in ICAO, you’re not going to get agreement easily,” he told the EBACE session. But to reach the 2020 deadline, agreement was vital at ICAO’s next assembly in 2016, he said.
(Reported by Robert Evans; Editing by Phil Berlowitz)
More news about the EU Emissions Trading System at EU ETS News Stories
The clock has stopped on aviation’s inclusion in the ETS: but where is ICAO now?
May 2, 2013 Following the European Parliament’s vote approving the Commission’s proposal to “Stop the Clock”, Conservative MEP Peter Liese, aviation EU ETS and “Stop the Clock” Rapporteur, hosted a public briefing for MEPs in Brussels on 24th April to review progress of the ICAO High Level Group on Climate Change (HGCC) formation. The conference was attended by Jos Delbeke (Director–General DG Clima), Prof David Lee (Manchester University), IATA’s Paul Steele and Green MEP Satu Hassi. T&E have written a report on the meeting. Unless things changed, and ICAO made rapid progress leading to a constructive agreement on both the need for a global market-based mechanism (MBM) to address international aviation emissions and for a Framework to govern national/regional schemes such as the EU ETS , then the original aviation Directive would “snap back” automatically next January. The Directive wouldn’t be amended “because of pressure from China, the US or Airbus”. Jos Delbeke insisted that if the whole problem couldn’t be solved now it couldn’t be solved later and, consequently, the credibility of ICAO’s global goals was squarely on the table. Click here to view full story…
ICAO looks like wasting EU’s gesture
April 28, 2013 (Transport & Environment)
The EU has finalised the text of its ‘stop the clock’ concession on the inclusion of emissions from intercontinental flights in the ETS, although the chances of the gesture being wasted by members of the ICAO look greater with each day that goes by.
Intercontinental flights involving all EU airports were subject to emissions trading from 1 January last year, but because of complaints from the USA, China as well as major European carriers and Airbus, the EU made the gesture of suspending the requirement to include all emissions from intercontinental flights for a year, in the hope of achieving a global aviation emissions agreement at the triennial ICAO general assembly in September. But so little progress has been made that the likelihood of an agreement being reached by September is decreasing, and in that case the EU says it will re-start the clock and subject all flights to emissions trading. A ruling by the European Court of Justice in 2011 confirmed that applying emissions trading to intercontinental flights is perfectly legal. ICAO’s lack of action is consistent with its record since it was given responsibility for tackling international aviation’s environmental impact in the 1997 Kyoto Protocol. link
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In October 2012 “Make” architects put forward outline proposals for a 4 runway Stansted. Now Stuart Blower from “Make” says: “One of the great advantages of our Stansted proposal is no aircraft need to fly over London” so reducing the aircraft noise, over London. “Make” are also saying that there is a low population density around Stansted, compared to that around Heathrow, so far fewer people would be affected. They do at least condescend to acknowledge that a huge Stansted would create more noise for residents living near the airport. At present the average journey time by rail beween Stansted and Liverpool Street is about 47 minutes, and the airport is lobbying to get this journey time cut. ”Make” is proposing that the new Crossrail line should be extended to Stansted, so it would only take 25 minutes from Canary Wharf to Stansted. However, the extra cost of this Crossrail link would be some £5 billion. The anticipated cost of the “Make” airport scheme would be £18 billion, so the total would be £23 billion. Along with all the other airport and runway proposals, this scheme will be submitted by “Make” to the Airports Commission by the mid July deadline. Any plans to expand Stansted, let alone to become a monster mega-airport, will be strenuously opposed locally.
From Make Architects website ©Make Architects
A computer generated impression of how 4 runways at Stansted could look
£23bn plan for Stansted hub airport to replace Heathrow
By Andrew Parker ( Financial Times)
Full FT article at http://www.ft.com/cms/s/0/3778d956-c229-11e2-ab66-00144feab7de.html#axzz2U7X7UPNS
Stansted should replace Heathrow as the UK’s hub by transforming the Essex airport into a four-runway operation with improved rail links at a cost of £23bn, according to proponents of the scheme.
Make, the London-based architect, is proposing to curb the jet noise suffered by residents living under Heathrow’s flightpaths by recommending that Stansted become the UK’s hub by 2028 – capable of dealing with 120m passengers every year.
….Make is planning to submit its Stansted scheme to the commission chaired by Sir Howard Davies
….Manchester Airports Group, …..is expected to evaluate the case for turning the Essex airport into a large hub in the coming months.
Full FT article at http://www.ft.com/cms/s/0/3778d956-c229-11e2-ab66-00144feab7de.html#axzz2U7X7UPNS
Mega-Stansted ‘would cut flights over London’
Plans: London-based architects Make have drawn up proposals to turn the Essex airport into a mega-hub twice the size of Heathrow by 2028
by Jonathan Prynn, Consumer Business Editor (Evening Standard)
Backers of ambitious plans to turn Stansted into a four-runway hub airport today claimed the scheme would reduce the number of flights over London.
London-based architects Make have drawn up proposals to turn the Essex airport into a mega-hub twice the size of Heathrow by 2028.
Stuart Blower, one of the Make architects behind the £23 billion project, said: “One of the great advantages of our Stansted proposal is no aircraft need to fly over London.”
This is mainly because the four runways proposed for Stansted run from the northeast to the southwest.
The architects also point out that the countryside around Stansted has a population density of 100 to 249 people per sq km compared with 2,500 to 4,999 around Heathrow.
Make intend to submit their plans to the independent commission chaired by Sir Howard Davies looking at how to increase aviation capacity in the South-East. However, they are certain to be opposed by local groups.
The Stop Stansted Expansion group has said in its submission that there is no need for more runways in the South East. Its economics adviser, Brian Ross, said: “If there was demand for another 100 flights a day to China, there would be ample capacity to accommodate that straightaway. In fact, the overall demand for business flights is declining: overseas business trips by UK residents have fallen by a fifth since 2000.”
The Airports Commission will produce an interim report this year and its final recommendations by mid-2015.
4-runway mega-hub at Stansted airport proposed by “Make” architects
22 October 2012
Plans for a new four-runway London mega-hub at Stansted capable of handling 150 million passengers a year have been unveiled. The plan is by architect Ken Shuttleworth, the architect behind the Gherkin in the City. The plans from his practice, “Make” Architects, would see Heathrow either entirely redeveloped or drastically reduced in size. They would involve building three new 4km-long runways at Stansted and creating a new Crossrail link from Stansted to Stratford, reducing train journey times to 25 minutes. The Norman Foster-designed 1991 main terminal building could also be transformed into a train station under the plans but full architectural details have yet to be revealed. Timescales and construction cost have also yet to be confirmed. Boris is in favour of this new Stansted hub, if he cannot get his Thames estuary airport.
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China is the world’s largest emitter of CO2 (about 25%) and the US (about 17%) is the second largest. Until now neither China nor the US has made any commitment to a cut of their absolute CO2 emissions. However, now China’s National Development and Reform Commission (NDRC), the agency responsible for planning the country’s social and economic development, has proposed a putting a ceiling on CO2 emissions by 2016. Lord Stern considered this as very exciting news, which “should encourage all countries, and particularly the other large emitters such as the United States, to take stronger action on climate change. And it improves the prospects for a strong international treaty being agreed at the United Nations climate change summit in 2015.” Also Ed Davey believes that China’s changing attitude improves prospects for a global deal in 2015. The US has still not agreed any comparable cap. China has agreed to cut its carbon intensity – the amount of CO2 produced per dollar of economic output – by about 40% by 2020, compared to 2005 levels – but that still means a large rise in their emissions.
China agrees to impose carbon targets by 2016
Beijing’s thaw over greenhouse gases seen as major step in battling climate change
The battle against global warming has received a transformational boost after China, the world’s biggest producer of carbon dioxide, proposed to set a cap on its greenhouse gas emissions for the first time.
Under the proposal China, which is responsible for a quarter of the world’s carbon emissions, would put a ceiling on greenhouse gas emissions from 2016, in a bid to curb what most scientists agree is the main cause of climate change.
It marks a dramatic change in China’s approach to climate change that experts say will make countries around the world more likely to agree to stringent cuts to their carbon emissions in a co-ordinated effort to tackle global warming.
“This is very exciting news,” said Lord Stern, chair of the Grantham Research Institute on Climate Change at the London School of Economics.
“Such an important move should encourage all countries, and particularly the other large emitters such as the United States, to take stronger action on climate change. And it improves the prospects for a strong international treaty being agreed at the United Nations climate change summit in 2015,” added Lord Stern, who, in his 2006 report for the UK government on the financial implications of climate change, produced what many regard as the world’s single most influential political document on the subject.
Nearly 200 countries around the world have pledged to agree legally binding targets to reduce their emissions at the next significant climate change summit in Paris in 2015.
Without a robust global agreement experts say there is virtually no prospect of keep global warming to 2C – beyond which most experts agree the consequences become increasingly disastrous.
Doug Parr, Greenpeace’s chief scientist, said: “This is a big shift in China’s position and should unblock the standoff between the US and China in the global climate change negotiations. Without an agreement between these two major players it is hard to see how an agreement can be reached in 2015.”
The US is the world’s second biggest emitter of carbon dioxide, accounting for 17.6% of the global total, while the UK makes up 1.6%.
Climate and Energy Change Secretary Ed Davey told The Independent that China’s changing attitude to climate change has made him increasingly confident that a deal can be reached in 2015.
“At the end of last year the Chinese leadership changed and started talking about creating an ‘ecological civilisation’. This doesn’t mean they have signed up to every bit of the climate change talks, but it means they recognise that their economic model has to take account of pollution and the environment and that damage that it’s doing to people’s health,” Mr Davey said.
“I’m really much more confident than many people about our ability to get an ambitious climate change deal done in 2015. Obama in his second term clearly wants to act on this and there has been a fantastic and dramatic change in America’s position. Taken together with China’s change, the tectonic plates of global climate change negotiations are really shifting,” Mr Davey added.
Mr Davey said he wants the UK to take a leading part in the global climate change discussions as part of the European negotiating block. However, he said he was concerned that the rise of the climate sceptic Ukip party could drag members of the Tory right in that direction and damage Britain’s credibility in debate on global warming.
Elliot Diringer, of the Centre for Climate and Energy Solutions think tank in Virginia in the US, said China’s move towards a cap was “encouraging news and definitely a move in the right direction” but said its true impact would depend on the level of the ceiling.
The proposal to introduce the cap has been made by China’s National Development and Reform Commission (NDRC), agency responsible for planning the country’s social and economic development.
Although the proposal needs to be accepted by China’s cabinet, the State Council, for it to be adopted but experts said the agency is extremely influential and is working with a government that appears to be increasingly committed to the environment. The agency also said it now expects China’s greenhouse emissions to peak in 2025, five years earlier than its previous estimate.
China has agreed to cut its so-called carbon intensity – the amount of CO2 produced per dollar of economic output – by about 40% by 2020, compared to 2005 levels.
However, this still allows for a considerable increase in emissions, albeit it at a slower pace. The cap proposed by NDRC would represent the first time China has committed to cut its absolute emissions – something that the US has failed to do.
Lord Stern said the move was a further sign that the EU “is losing its global leadership position on climate policy through its vacillation”.
China is the world’s biggest carbon emitter
and burns almost as much coal as the rest of the world’s countries combined
The push to reduce carbon emissions coincides with the newly installed leadership’s effort to tackle the country’s dire air pollution problem, which has emerged as a source of widespread anger and frustration in recent months. “Having a mid-term strategy, and trying to prepare years ahead, is actually in line with China’s interests and its political and social priorities,” she said.
On Monday, the Chinese newspaper 21st Century Business Herald reported that the NDRC has discussed implementing a national system to control the intensity and volume of carbon emissions by 2020. The agency expects China to reach its carbon emissions peak by 2025, five years earlier than many recent estimates, according to unnamed sources quoted in the article.
At a recent climate change meeting, the agency “announced that it’s currently researching and calculating a timetable for the greenhouse gas emissions peak, and will vigorously strive to implement a total emissions control scheme during the ’13th five-year plan’ period (from 2016-2020),” the paper quoted a NDRC official, also unnamed, as saying.
“The NDRC is looking for a national cap, but nobody knows exactly when that is going to happen,” said Wu Changhua, greater China director of the Climate Group. “There’s still a lot of work to be done.”
The EU’s carbon trading scheme, the world’s largest, has suffered repeated setbacks in recent months. In April, MEPs voted against a proposed reform aimed to raise the price of carbon, which has been diluted by an overabundance of permits.
But by contrast, on aviation:
Is China dictating Europe’s climate policy?
May 20, 2013 (Transport & Environment)
…. extracts …..
The EU’s decision to ‘stop the clock’ on including emissions from intercontinental flights in its Emissions Trading Scheme appears to have been influenced by Chinese threats to cancel orders for new planes from Airbus. A letter from the president of the French aircraft maker to China’s leading aviation official – seen by Reuters – says Airbus played an influential role in persuading the EU to give the world’s governments another year to reach agreement on how to tackle carbon emissions from air transport. T&E says European governments have effectively given China ‘a veto over European policy’.
T&E aviation manager Bill Hemmings said: ‘It is an extremely serious matter that Airbus has lobbied the EU to ‘Stop the Clock’ on behalf of China in such a brazen fashion. Airbus already enjoys massive financial support from the EU precisely because it is European, yet now appears to have put its own commercial interests before its legal obligations to uphold cornerstone EU environmental law aimed at protecting European citizens. There are also questions to be asked of the British, French and German governments, all of whom have significant claims in Airbus’ parent company EADS, who look to have caved in to China’s threats through Airbus’ lobbying. Where are we if our own governments hand the Chinese a veto over European foreign policy?’
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Both Heathrow and Gatwick airports have submitted their responses to the Aviation Commission’s discussion paper on Aviation and Climate Change. Both base their aspirations of high growth rates over coming decades on evidence from the industry body “Sustainable Aviation”. Not surprisingly, both airports’ submissions are attempts to justify the unjustifiable: to claim that emitting huge amounts more carbon dioxide can be achieved with no net emissions, by various probable and improbable means. They hope improvements in efficiency by airlines and air traffic control, as well as improved aircraft design, will cut their emissions. They place unrealistic hopes in “sustainable” biofuels, with Gatwick’s submission saying “…by 2050, sustainable fuels could offer between 15 and 24% reduction in CO2 emissions attributable to UK aviation.” Gatwick also wants considerable Government support (ie public expense) to develop biofuels for the industry. And both depend to an enormous extent on international agreements through ICAO, and systems for carbon trading that do not currently exist.
Heathrow: UK aviation can grow and meet climate change targets
15 May, 2013 (Heathrow)
- The Heathrow response to the Airport Commission’s discussion paper on Aviation & Climate Change is at Heathrow response
Growing the UK’s airport hub capacity is consistent with meeting UK climate change targets, according to Heathrow’s response to the ‘Aviation and Climate Change’ discussion paper published by the Airports Commission.
The response, submitted today, cites projections by Sustainable Aviation1, [see below for their Roadmap graphic] the UK aviation cross-industry association, that new aircraft and engine technology, operational efficiencies and sustainable biofuels will allow the UK to more than double air traffic by 2050 without a substantial increase in gross emissions [very optimistic on biofuels which, in reality, are not likely to be available in large amounts] consistent with the UK’s long term legally set climate change targets. Together these developments have already improved fuel efficiency by over 70 per cent in the last 40 years2. [In reality, the older planes were more fuel efficient. Then the new jets took over, which were fuel inefficient; and the new improvements are only getting back now to where they were 40 years ago ....]
If international carbon trading is added to these factors, Sustainable Aviation forecasts that emissions over time would actually be reduced, achieving the global industry’s commitment to halve 2005 carbon emissions by 20502. [ ie. depending on carbon trading with other sectors to negate aviation carbon emissions. Not real cuts. by the industry - just hoping to buy permits from other sectors which actually make carbon cuts.]
Heathrow’s submission adds that constraining growth at a hub airport is an inefficient and ineffective way of reducing carbon emissions for three reasons:
- Without additional UK hub capacity, passengers will still travel, but in less carbon efficient ways, so carbon will not be cut. UK long-haul passengers will have to transfer through EU hubs, adding an additional landing and take-off to each journey – the most carbon-intensive part of a flight. International passengers travelling to the UK may need to detour via a European hub, adding extra miles to long-haul routes. The Airports Commission concludes that by 2030, the carbon emissions from increased transfer trips would exceed any carbon savings made by those that would choose not to travel3. In addition, the UK would lose the economic benefits of direct connections.
- All sectors need to play a role in reducing carbon emissions. Aviation delivers more than twice the economic value per tonne of carbon compared to other sectors [very unscientific figure - how could such a general claim be justified? how exactly were the figures derived? work done by Frontier Economics on 2009 data] so there is greater value-for-money in reducing carbon emissions in other non-transport areas4.
- The unique long-haul routes from the UK’s only hub airport, Heathrow, deliver over twice the economic value per carbon tonne from trade and tourism compared to those from other UK airports4.
The existing transport infrastructure around Heathrow also provides additional carbon emissions benefits compared to other UK hub options.
The submission shows that, even if development of Stansted or a new Thames Estuary airport included significant investment in new transport infrastructure, Heathrow would still have 4.5million more people within a 60minute public transport catchment area than either airport. This means passengers and staff would create a significantly smaller carbon footprint when travelling to and from Heathrow.
Matt Gorman, Heathrow’s Sustainability Director, says: ‘Our submission argues that it is possible to grow the UK’s hub airport, Heathrow, without exceeding the UK’s long term climate change targets. This is thanks to exciting advances made by the aviation industry across technology, operational procedures and sustainable fuels which have changed the impact of this industry for the better and will continue to do so in the future.’
Gatwick Airport’s response to the Commission’s Aviation & Climate Change discussion paper
….. Gatwick has also separately submitted its response to the Airports Commission on Aviation and Climate Change – an area of key importance and focus for the airport. While there is much work to be done by the whole industry to manage climate change issues, innovation is already taking place in areas such as aircraft technology, which is reducing C02 levels. Within its submission, Gatwick has reiterated its commitment to its sustainability programme ‘Decade of Change’ and highlighted the use of biofuels as a key focus for the Airports Commission to consider for the future.
London Gatwick’s full submission is at Aviation and Climate Change
Gatwick airport, like Heathrow, places huge faith in biofuels to solve their future carbon problems. The Gatwick submission says (page 8)
We also believe that the DfT forecast for penetration of biofuels is too low. We endorse and the support the figure outlined in the Sustainable Aviation CO2 road map. We fully expect that penetration will be greater than 2.5% by 2050 particularly if the Government provides more support in this area in line with the approach outlined in SA’s CO2 road map.
Accordingly, we believe that by 2050, sustainable fuels could offer between 15 and 24% reduction in CO2 emissions attributable to UK aviation. This assumption is based on a 25-40% penetration of sustainable fuels into the global aviation fuel market, coupled with a 60% life-cycle CO2 saving per litre of fossil kerosene displaced.
The sort of reasoning that Gatwick and Heathrow use to justify large aviation expansion in future can be seen from these graphics:
From the Gatwick submission:
Another comment that reveals the tone of the response is (page 11):
“Behavioural change is not an approach supported by Gatwick. We believe the long term solution to managing the industry’s carbon emissions lies in delivering alternative low CO2 fuels in conjunction with other technological advancements. This will allow aviation to grow and meet demands from passengers in a sustainable manner ensuring the economic prosperity of the UK. ”
“…….the most compelling opportunity for the UK to exert an influence over CO2 emissions from aviation is not by constraining demand for UK aviation, but rather through investment in advanced technologies which can be deployed globally, earning export revenues for the UK while contributing to a more environmentally efficient industry world-wide. This would then allow for sustainable growth in the UK aviation sector ensuring UK connectivity and protecting the valuable contribution the industry makes to the economy.”
“The industry has already demonstrated significant carbon savings. Analysis by IATA (IATA, 2010) has shown that global commercial airline fuel efficiency has improved by over 30% in the past two decades, saving over 400 million tonnes of CO2 per annum at current activity levels, relative to the fleet efficiency in 1990. In contrast, total annual emissions of CO2 attributable to UK aviation correspond to less than one tenth of this figure. In line with
IPCC (sic) we believe that aviation can grow by around 60% and still achieve the Governments (sic) carbon emissions reduction targets.”
“However in order to achieve this sustainable growth, there need to be continued technological advances and developments and there will need to be significantly more support from Government to develop alternative fuels and a workable solution to carbon trading. These measures combined with the operational savings achievable from airspace changes and efficiencies in ground operations, will deliver the headroom which enables the industry to grow, whilst achieving the governments (sic) emission targets.”
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In April a deal was agreed between Airbus and China that they would buy 18 long-haul A330s because of the ETS being temporarily stopped. Now Reuters reports on a letter from the Airbus Chief Executive, Fabrice Bregier to China’s top aviation official shortly after the EU back-pedaled on its ETS in November, (4 days after the ETS climb down) saying AIrbus had been “very active” in supporting China’s preference for a broader global system. The letter gives a glimpse into the intensity of the lobbying in the dispute, which helped persuade the EU to freeze the ETS. Behind the scenes, Airbus claimed partial credit for the EU climb-down and cheered what its chief executive described to Beijing as “joint efforts” to limit damage to Chinese airlines. Bregier said ”Through our joint efforts, we have managed to ensure that Chinese airlines are not unfairly impacted by the scheme as previously planned.” Airbus needs certainty on its future plane sales far in advance, in order to order parts. Reuters says more valuable deals for Airbus from the Chinese remain on hold as China awaits the outcome of international talks on aviation carbon emissions.
Airbus to China: We support you, please buy our jets
By Barbara Lewis ( Reuters )
May 12, 2013
(Brussels – Reuters) – China’s decision to ease a boycott of some $11 billion in Airbus jet orders followed a high-level appeal from the planemaker urging Beijing to recognize its support over a trade row with Europe, a letter seen by Reuters shows.
It gives a glimpse into the intensity of the lobbying in the dispute, which helped persuade the European Union to freeze a law on regulating international aviation emissions.
China partly lifted a blockade on 45 long-haul A330 jet orders during a visit by French President Francois Hollande last month.
Behind the scenes, Airbus claimed partial credit for the EU climb-down and cheered what its chief executive described to Beijing as “joint efforts” to limit damage to Chinese airlines.
Writing to China’s top aviation official shortly after the EU back-pedaled on its Emissions Trading Scheme last November, Fabrice Bregier said Airbus had been “very active” in supporting China’s preference for a broader global system.
“Through our joint efforts, we have managed to ensure that Chinese airlines are not unfairly impacted by the scheme as previously planned,” Chief Executive Fabrice Bregier said.
“I hope we at Airbus have been able to clearly demonstrate our strong support to Chinese aviation.”
Airbus, which also got backing from European leaders, says the blocked orders alone put 2,000 jobs at risk.
“Since I became president of Airbus in June (2012), I have made this issue one of the top priorities for the company,” Bregier wrote to Li Jiaxiang, the government official in charge of the Civil Aviation Administration of China (CAAC).
A spokesman for Airbus declined to comment on the letter but reiterated that the company, a subsidiary of EADS, welcomed the EU’s decision to pause the scheme for a year.
Bregier signed the two-page letter on November 16, four days after EU Climate Commissioner Connie Hedegaard agreed to “stop the clock” for a year on plans to make all airlines using EU airports pay for their emissions through a trading scheme.
The proposal unleashed a volley of international criticism and China – which viewed it as a breach of sovereignty – froze orders for aircraft worth up to $230 million each.
Bregier urged China to respond to the European Union’s decision by swiftly granting approvals for all 45 aircraft.
While Beijing approved 18 orders worth $4 billion, more valuable deals remain on hold as China awaits the outcome of international talks on the problem of managing borderless emissions without infringing sovereignty.
PRESSURE TO ORDER PARTS
Bregier’s letter sheds light on frantic efforts to unblock the orders as Airbus reached the deadline for ordering parts for the jets. According to his letter, the first aircraft was tentatively scheduled to be delivered in the summer of 2013.
Industry sources say a golden rule of the aerospace industry is that planes are never built without a firm order and deposit.
However, the schedule suggests Airbus may have been willing to show some flexibility, given China’s role as the world’s fastest-growing aviation market and a strategic trade partner.
Longest-lead-time components are ordered around a year in advance, meaning that if the planes are indeed to be delivered this summer, some parts would have been ordered last year.
The letter also gives the first available breakdown of the A330 orders, details of which have mostly been kept secret pending final approval from the Chinese government.
They include 10 aircraft for Air China, 10 for Hainan Airlines, 10 for China Southern and 15 for China Eastern. The letter said first deliveries were tentatively scheduled for mid-2013.
Airbus has not said which of these are included in the approvals for 18 aircraft announced on April 25.
It is not the first time high-profile plane orders have become swept up in trade tensions between China and Europe or the United States, home to Airbus’s arch-rival Boeing.
Supported by India and the United States, China objected to the EU airlines plan on the grounds that it based charges on the whole trip, including China’s jealously protected airspace.
The European Union says it was forced to act after more than a decade of inaction by the international community.
For internal EU flights the EU scheme remains in place and the European Union says it will re-impose the scheme for all flights using EU airports if global talks do not progress.
In practice, diplomats say that places the onus on the United Nations’ International Civil Aviation Organization to reach a breakthrough during its general assembly from September 24.
The absence of a deal would raise the prospect of further deadlock over Airbus orders.
Aviation executives are expected to tackle the issue on Monday in Montreal, home to ICAO, where they are attending an Airbus-sponsored environment workshop.
(Additional reporting by Tim Hepher; Editing by Louise Heavens)
China agrees $4.1bn Airbus plane deal to buy 18 wide-body jets + $3.8 bn deal for 42 narrow-body jets
April 27, 2013 Fear by European countries, Airbus and many airlines, that loss of sales of Airbus planes to China was a reason for “stopping the clock” for a year, on aviation’s inclusion in the ETS. Now a deal has been agreed that China will buy 18 A330s from Airbus. Now inclusion of aviation in the ETS has been emasculated, Airbus is keen to sell as many planes as it can to China and returning to what it calls ‘business as usual’. The order that has now been announced is part of an earlier order for 45 wide-body jets, which are worth about $4n at list prices, although China may get a hefty discount on them. There is also an order by the Chinese for 42 A320 narrow-body jets, worth about $3.8bn though this deal had not been affected by the ETS debacle. Airbus, which is a subsidiary of EADS, hopes China will be its largest customer during coming 2 decades, buying large numbers of planes. France, Germany and Britain continue to do all they can to build strong commercial ties with China, to boost exports and income. Click here to view full story…
EU states deny reports that their Airbus ministers seek suspension of EU ETS until ICAO agreement
GreenAir online 13.9.2012 http://www.greenaironline.com/news.php?viewStory=1589 which includes this: A spokesman at the UK’s Department for Business said it was incorrect that his minister was calling for a suspension of aviation from the EU ETS. “The UK is committed to reducing aviation emissions and to the role of the EU ETS in doing so,” he told GreenAir. “Like other European nations, the UK is keen to address issues that have been raised by a number of nations around the operation of the aviation element of the EU ETS. There was agreement by the European ministers at the Berlin Air Show that these issues need to be addressed through a global agreement to tackle aviation emissions. We recognise that a failure to resolve these issues could have a serious impact on the UK and European aerospace manufacturing and aviation sectors. We are pressing for faster progress in the International Civil Aviation Organization (ICAO) and other fora to secure a global solution which delivers on the EU’s objectives of continuing to reduce emissions from aviation.”
Airbus tries to get inclusion of aviation in ETS suspended. EU confirms no change.
September 13, 2012 There have been press stories suggesting that European officials backing Airbus are recommending the suspension of ETS in order to avert a trade war with major economic powers such as China and the USA. China and India do not allow their airlines to participate in the ETS because the charge is for the whole flight distance, not just the section over Europe. Beijing has blocked purchases of European aircraft (Airbus) by its carriers, so Airbus is unhappy about losing its fastest-growing market and is putting strong pressure on the EU as they may lose plane sales. Those backing Airbus want a “solution” before April 2013, but the matter is not due to be dealt with by ICAO till September 2013. Connie Hedegaard has confirmed that there are “no changes in EU and member states approach on the ETS and aviation” and this is just pressure from Airbus. The EU has repeatedly said it won’t give up its pollution curbs on airlines. Click here to view full story…
More news about the ETS at
EU ETS News Stories
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Following the European Parliament’s vote approving the Commission’s proposal to “Stop the Clock”, Conservative MEP Peter Liese, aviation EU ETS and “Stop the Clock” Rapporteur, hosted a public briefing for MEPs in Brussels on 24th April to review progress of the ICAO High Level Group on Climate Change (HGCC) formation. The conference was attended by Jos Delbeke (Director–General DG Clima), Prof David Lee (Manchester University), IATA’s Paul Steele and Green MEP Satu Hassi. T&E have written a report on the meeting. Unless things changed, and ICAO made rapid progress leading to a constructive agreement on both the need for a global market-based mechanism (MBM) to address international aviation emissions and for a Framework to govern national/regional schemes such as the EU ETS , then the original aviation Directive would “snap back” automatically next January. The Directive wouldn’t be amended “because of pressure from China, the US or Airbus”. Jos Delbeke insisted that if the whole problem couldn’t be solved now it couldn’t be solved later and, consequently, the credibility of ICAO’s global goals was squarely on the table.
The clock has stopped: Where is ICAO now?
May 2, 2013 (Transport & Environment)
Following the European Parliament’s vote approving the Commission’s proposal to “Stop the Clock”, Conservative MEP Peter Liese, aviation EU ETS and “Stop the Clock” Rapporteur, hosted a public briefing for MEPs in Brussels on Wednesday 24th April to review progress of the International Civil Aviation Organisation’s (ICAO) High Level Group on Climate Change (HGCC) formation, of which had prompted Europe’s stop the clock decision.
The conference was attended by Jos Delbeke, Director–General DG Clima, Prof David Lee of Manchester University, IATA’s Paul Steele and Green MEP Satu Hassi. The derogation became European law on 25 April.
Here’s our report of what was said there.
Both Liese and Satu Hassi showed disappointment at the little progress of the HGCC, as evidenced by continuing differences both on the need for a global market-based mechanism (MBM) to address international aviation emissions and for a Framework to govern national/regional schemes such as the EU ETS (see ICAO update box made available at the meeting and downloadable here).
Unless things changed and ICAO made rapid progress leading to a constructive agreement on both these issues at its forthcoming triennial Assembly, then the original aviation Directive would “snap back” automatically next January. The Directive wouldn’t be amended “because of pressure from China, the US or Airbus”.
Liese criticised IATA and industry’s stance. He said: “If industry really wants a global aviation deal they need to lobby for it, not against it”. He appealed directly to US Secretary of State John Kerry to follow through on Obama’s second inaugural commitment to take action on climate change noting that, after all, the Kerry-Liebermann, and indeed later Waxman-Markey bill, would have regulated the CO2 emissions of all international flights from the United States had it not been blocked in the U.S. Senate.
Jos Delbeke outlined Europe’s three requirements in the negotiations, namely:
- agreement on a Framework;
- agreement on a global MBM; and
- a strengthening of technical and operational measures.
He argued that the “departing flights from a State” approach, which was Europe’s position, was the only environmentally effective and/or administratively possible way of regulating international flights irrespective of the nationality of carrier.
Airspace (i.e. regulating CO2 emissions of arriving or departing flights only within a State’s sovereign airspace) was extremely difficult to implement and industry should be worried by it.
Delbeke added that as not all States were ready, Europe had made the roadmap proposal to the HGCC. Where, however, was industry on the roadmap? He called on industry to reveal their proposal for a solution, as Europe was open to considering all options. ICAO’s aspirational goals needed to be more mandatory, the requirement and content of State Action Plans strengthened as the quality was variable, and work accelerated on the CO2 standard for new aircraft.
In sum, Delbeke stated that Europe had shown its willingness by suspending co-decision legislation in record time but there was a limit to how far Europe will go. “We were in negotiation but without progress in ICAO the EU ETS will return in full”, Delbeke concluded.
Prof David Lee, leading climate scientist and an independent scientific adviser to ICAO, gave a thorough presentation on the possible pathways for aviation emissions growth to 2050. The various forecasts for reducing emissions (technology and operational measures, biofuels and regional MBMs) showed that there would still be a significant gap left between estimated aviation emissions and industry’s own 2020 carbon neutral growth goal, as well as ICAO’s 2% efficiency goal and the 2-degree target.
Indeed it was shown clearly that without the EU ETS, there was little if no possibility of aviation being carbon neutral from 2020 let alone in 2050.
Lee lamented the fact that ICAO does not afford more public access to all this important data. Lee added: “Why most final reports and supporting documentation of ICAO Working Groups are ‘secret’, when they are largely public and stakeholder funded and contain no proprietary or confidential data, mystifies me. I have ensured transparency of my group’s final products and the authors retaining intellectual property rights”.
Prof David Lee also outlined the options for geographic scope of any Framework measure. Using “airspace” approach would only cover up to 22% of worldwide emissions (and only if every country acted). In the example of the EU ETS airspace would cover only about a third of the original scheme. The departing flights or Flight Information Regions (FIRs) options could cover 100%. However, FIRs would incur significant administrative difficulties while a key issue remains: 77 countries have no FIR at all.
Paul Steele, recently promoted to Senior Vice President of Member and External Relations at industry body IATA, complained that governments around the world were already taking US$7bn annually from airlines as “environmental” measures. Thus, he argued, IATA was keen on ICAO agreeing a global deal on MBMs (although only as a gap filler in the medium term) while acknowledging the road was tough.
Mr Steele called for MBMs that fulfil three main criteria:
- reduce emissions,
- minimise competitive distortions and
- be administratively simple.
He was concerned about the ICAO work on an MBM Framework as the danger was that efforts would stop there.
At the same time, Steele had few comforting words for Europe about it: geographical scope “was perhaps the most difficult question”; the airspace, which the US is pushing, and over-flight approaches were both potential “nightmares” for market distortion and carbon leakage. Both were the “wrong building blocks” to a global approach while the suggestion of using FIRs was a “non-starter”. He didn’t talk further about the existing departing flights approach.
Steele also cautioned against expecting any “Eureka moment” at ICAO’s Assembly in October. While he warned against reverting to the situation prior to last November, he emphasised the fact that there would be “huge problems” if the EU ETS “snapped back”. Steele concluded by suggesting that offsetting was the right approach and that it could eventually morph into emissions trading if that was wanted.
Green MEP Satu Hassi expressed opposition to the airspace approach. For Hassi, it was total emissions that mattered and IATA should be lobbying governments to agree a global deal.
During questions, Green MEP Eva Lichtenberg, said members of her European Parliament’s Transport Committee all supported a global approach, adding that everyone knew who was blocking it.
Responding to a question, Peter Liese said that the concept of “mutual agreement” being required under a global agreement was “crazy” and later described the US position on airspace as “nonsense”. For Liese, the EU and the U.S. needed to cooperate on the basis of outbound flights. Paul Steele reckoned that reducing aviation demand was very difficult. Jos Delbeke concluded that the whole issue was a wake-up call for ICAO.
Delbeke insisted that if the whole problem couldn’t be solved now it couldn’t be solved later and, consequently, the credibility of ICAO’s global goals was squarely on the table.
Derogating from EU law was no small matter but a serious signal that was not open-ended.
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In the European Parliament, MEPs have voted narrowly to reject plans to bolster the price of carbon in the EU ETS by delaying or ‘backloading’ the sale of 900 million carbon allowances, prompting accusations that they have badly dented the bloc’s reputation as a global leader in the fight against climate change. The proposals were defeated in by 334-315, forcing the plan to return to the committee stage. It is now expected that the price of carbon allowances will hit record lows in the next few days as the market responds to confirmation that short to medium-term action is unlikely to be taken to address the chronic oversupply of carbon allowances in the market. Trading after the vote saw the price of EU allowances (EUAs) fall to a new record low of €2.63 a tonne. The EC proposals to remove the 900 million allowances, in order to boost the price, were defeated by a coalition of mainly centre-right MEPs (saying it would be interference with the market-based mechanism and could lead to higher energy bills in some markets) and also climate sceptic MEPs (some UK Conservatives), who have rejected any steps to try and tackle climate change.
Crisis looms for carbon market as EU Parliament rejects ‘backloading’ plan
Businesses and green groups left bitterly disappointed as MEPs reject crucial carbon market reforms
By James Murray (Business Green)
16 Apr 2013
MEPs have voted narrowly to reject plans to bolster the price of carbon in the EU’s emissions trading scheme (ETS) by delaying or ‘backloading’ the sale of 900 million carbon allowances, prompting accusations that they have badly dented the bloc’s reputation as a global leader in the fight against climate change.
The proposals were defeated in by 334-315, forcing the plan to return to the committee stage.
Analysts are now predicting the price of carbon will hit record lows in the next few days as the market responds to confirmation that short to medium-term action is unlikely to be taken to address the chronic oversupply of carbon allowances in the market. Trading in the immediate aftermath of the vote saw the price of EU allowances (EUAs) fall from more than €4.50 a tonne to a new record low of €2.63 a tonne.
The European Commission proposals were defeated by a coalition of mainly centre-right MEPs who opposed the plans on the grounds they would represent interference with the market-based mechanism and could lead to higher energy bills in some markets. Their numbers were also boosted by climate sceptic MEPs, who have rejected any steps to try and tackle climate change.
A number of British Conservative MEPs are understood to have defied Prime Minister David Cameron to vote against the proposals.
Businesses and green groups that had been campaigning in support of the plan were left deeply disappointed by the vote. NGOs have consistently warned that the rejection of the ‘backloading’ plan would not only lead to a further collapse in the price of carbon, but would also undermine confidence in the EU’s wider climate change programmes.
Analysts and campaigners had also warned that the failure to approve the backloading plan would make it extremely difficult for the European Commission to push through wider-ranging reforms designed to permanently address the oversupply of carbon allowances in the EU ETS.
In addition, energy and climate ministers of Germany, France, Italy, the UK, Sweden and Denmark warned that the rejection of the plan would significantly increase the likelihood of individual member states pursuing their own carbon taxes, such as the UK’s controversial carbon floor price.
Attention will now turn to the European Commission’s wider package of reforms designed to tackle over supply in the carbon market through the permanent retirement of excess carbon allowances, tighter limits on the number of carbon offsets that can be used in the market, or lower emissions caps on those firms covered by the scheme.
However, analysts said rapid progress on the package of reforms is unlikely to materialise, and warned that the market is now unlikely to see any fundamental changes until 2015 at the earliest.
But EU Climate Commissioner Connie Hedegaard insisted the vote had left the door open for earlier action to support the carbon market. “The commission of course regrets that the European Parliament has not approved the backloading proposal,” she said in a statement. “However, it is worth noting that when it was suggested in the second vote that the parliament finalised its rejection right away, this was not supported.
“The proposal will now go back to the parliament’s Environment Committee for further consideration. Europe needs a robust carbon market to meet our climate targets and spur innovation. The commission remains convinced that backloading would help restore confidence in the EU ETS in the short term until we decide on more structural measures.”
Writing on Twitter, Labour Shadow Climate Change Minister and green campaigner Baroness Bryony Worthington, suggested that the backloading plan could yet be revived in some form. “On ETS, 63 abstentions is high,” she wrote. “If work out why abstained + address issues could ENVI Committee come forward w diff proposal + win support?”
The result of today’s vote will lead to renewed calls from businesses, green groups and politicians for the EU to reach a decision on climate-related targets for the post-2020 period. Negotiations have been ongoing for months on the nature of any new targets, with member states understood to be divided on the scale of any emissions targets for 2030 and whether or not to repeat the package of targets for 2020 and impose new targets for energy efficiency and renewable energy.
Miles Austin, executive director of the Carbon Markets and Investors Association (CMIA), expressed frustration at the result of the vote.
“The consequences of MEPs voting against backloading will undoubtedly be rapidly reflected in the EUA price over the coming days; this solely lies at the feet of parliament,” he said in a statement. “Hopefully as a result they will finally demonstrate their ability to lead and accelerate the timetable for the now even more urgently needed structural reforms of the EU ETS.”
His comments were echoed by Guy Newey, head of environment and energy at the Policy Exchange think tank, who urged MEPs to now redouble efforts to deliver more comprehensive reforms to the ETS.
“Scuffling over short-term, temporary measures is a sideshow compared to the need for real reform of the ETS and Europe’s wider approach to climate,” he said. “That is where political attention must be focused.
“The challenge for reformers is to provide a long-term signal that Europe is serious about decarbonisation. That means delivering a clear ambition on carbon targets to 2030 and beyond, but also an end to measures that undermine the ETS’s price signal, in particular the counterproductive Renewable Energy Target that pushes up energy bills unnecessarily.”
16 April 2013 (BBC)
EU parliament rejects plan to boost carbon trading
By Matt McGrathEnvironment correspondent, BBC News
The European Parliament has rejected a plan to rescue the EU’s ailing carbon trading scheme. Members narrowly voted against a so-called “backloading” proposal that would have cut the huge surplus of allowances currently being traded.
Because of this excess, the price of carbon on the EU Emissions Trading Scheme (ETS) has plunged to less than 5 euros a tonne.
But opponents won the day by arguing the plan would push up energy costs.
The price of carbon has fluctuated considerably since the ETS was launched in 2005. The scheme limits the emissions from around 12,000 power plants and factories across the 27-member bloc.
“The central plank of Europe’s strategy for cutting carbon emissions is now rendered impotent”
Joss Garman Greenpeace UK
At one point the trading price was well above €30 per tonne But concerns over the growing number of allowances issued has caused a significant drop in recent years. In January this year it hovered around €3 per tonne.
In an effort to push up the price and make low carbon investments more attractive the European Commission proposed withholding around 900 million allowances from the market over the next two years. The hope was that this “backloading” proposal would promote scarcity and would drive up the price.
The move was backed by a number of European energy companies which placed a full page advertisement in the Financial Times urging a “yes” vote in the Parliament.
But industries that use a large amount of energy were angered by the proposal. They said that the low price of carbon accurately reflected the economic reality of a Europe struggling with a slump for the past four years.
They said that backloading would put many companies at a significant competitive disadvantage to businesses in the US which have benefitted from lower energy costs thanks to shale gas.
Despite political backing from the UK, France and Italy, MEPs voted against the proposal by 334 votes to 315 with more than 60 abstentions. It will now go back to the Parliament’s environment committee for further consideration.
Campaigners have highlighted the fact that the EU price of carbon has recently been around the same price as a burger
Poland’s minster for the environment, Marcin Korolec, welcomed the move in a tweet.
“The vote of reason,” he wrote.
“Hope we can focus now on discussions on 2030 vision. Things that matter.”
However there was anger about the actions of UK Conservative MEPs. Twenty two Tory members voted against the backloading idea.
Chris Davies is the Lib Dem spokesman on environment in the European Parliament. He said the actions of the Conservatives undermined the efforts of the coalition government to protect the environment.
“Conservative MEPs could have made a decisive difference and levelled the playing field for UK manufacturers building car parts, aerospace technologies and other energy intensive export businesses.
“Instead they have let their hatred of the EU get in the way of their own party policy and of economic growth.
The EU Commissioner for climate action, Connie Hedegaard said the she regretted that backloading had been rejected.
”Europe needs a robust carbon market to meet our climate targets and spur innovation,” she said in a statement.
“The Commission remains convinced that backloading would help restore confidence in the EU ETS in the short term until we decide on more structural measures. We will now reflect on the next steps to ensure that Europe has strong EU ETS.”
Some environmental groups were furious that the plan had been rejected. According to Joss Garman, political director of Greenpeace UK, it cast doubt on the future of the scheme.
“The central plank of Europe’s strategy for cutting carbon emissions is now rendered impotent as it won’t stop a single dirty coal plant from being built,” he said.
EU carbon price hits all-time low 21.1.2013
What next for the EU ETS?
posted by Bryony Worthington
on 16th Apr 2013
The future of the ETS in Europe the short term looks pretty bleak – the carbon price has already fallen by close to a half, from an already rock bottom level, as the market absorbs the news that the Parliament has voted against throttling back some of the supply into the already overloaded market.
The immediate implications of this are that forthcoming auctions may struggle to go ahead as technical reserve prices, intended to prevent sales significantly below the market price, could kick in as they already have before in Greece and Austria.
This could serve as sort of stop-start temporary ‘backloading’ but it unlikely to lift prices by very much.
Member States who have been banking on incomes from auctions to fund public services or supporting green policies will find they have a hole in their finances and this could prompt the introduction of more carbon taxes to compensate – as was recently introduced in the UK.
This will be bad for business as the once level carbon playing field across Europe starts to splinter distorting trade. The low prices are also bad news for Europe’s more efficient, well-run companies who will no longer be rewarded for doing the right thing.
In the short run it’s also bad for the two thirds or so of installations currently holding comfortable surpluses as there will be no-one interested in buying their spare allowances, removing a source of income at a time when all potential cash flow represents a potential lifeline.
In the medium term, there is the possibility that a different, more ambitious proposal will emerge from the Council, Commission or indeed the Parliament.
There were a number of abstentions in the vote today – if they can articulate what their concerns were and have them addressed, something new could emerge. Equally, some members of one of the most powerful blocks the EPP have claimed they do support fixing the ETS just not through backloading so they may support a different approach if one can be agreed on.
There is a slim chance something could be agreed ahead of the next parliamentary elections in May next year. If that fails then it will be two years or more before anything can be done at an EU level.
In the longer term the ETS will simply carry on regardless as there is nothing in the legislation that causes it to cease.
By around 2020 much of the industrial surpluses will have run out and future free allocations to industry will be fast disappearing. Offsetting provisions will also run out. So if the policy does not change then prices will inevitably rise again in about 10 years or so.
Sadly for the EU, to sit around doing very little for the rest of the decade means loss of investment and sends a very bad signal – especially in the run up to the 2015 UN negotiations when the world is meant to try and agree the next international treaty.
For this reason it seems likely the focus of the Commission will now shift to deciding climate targets for 2030 which if they are accompanied by changes in the ETS trajectory could serve to lift the carbon price from the doldrums a lot earlier than it would otherwise.
Looking outside of the ETS the failure to fix the ETS could derail political will in other countries – most notably Australia and Korea – however there could also be a plus side as countries currently copying the EU model may well think twice when considering their own plans and introduce safeguards against such drastic price crashes, following more closely the Californian model.
Overall the EU ETS is down but not out. We are losing time and investment opportunities while it remains on the floor but it will bounce back and we intend to ensure that this happens sooner rather than later.
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