EU agrees to deal on watered-down version of ETS for emissions only in EU airspace – with more ICAO delay on any global measure

The EU has agreed to a deal to scale back its inclusion of aviation in the ETS as UN negotiators at ICAO agreed at talks in Montreal to only include emissions from flights over European airspace. This is a substantial scaling down of the initial plan to include all flights to and from Europe. The ICAO deal, which still needs to be signed off by a full meeting ending October 4th and by EU lawmakers, was immediately criticised by green groups. ICAO will delay implementing any more effective mechanism for another 7 years. The deal falls short of the worldwide pact the EU had hoped for in November 2012 when it exempted foreign flights for one year (“stopping the clock”) to give ICAO more time to develop a global deal. At present airlines need only surrender carbon permits for flights within the EU, so requiring permits for the miles in European airspace is a slight improvement. However, it means that for a long haul flight to or from the EU, most of the carbon is not included in the ETS.  Peter Liese, a senior member of the EU Parliament, said “It is far from an ideal solution… (but) I’m really concerned that if we just oppose what is on the table then we may see a total collapse of our effort.”


EU to Limit Aviation Carbon Cuts as ICAO Studies Global Plan

By Ewa Krukowska – Sep 4, 2013  (Bloomberg)

The European Union agreed to limit the scope of its carbon curbs on airlines as the United Nations aviation panel’s council pledged to work on a global plan to cut pollution from the industry beginning in 2020.

The International Civil Aviation Organization’s Council agreed today to have tools in place by 2016 needed to develop a global market-based measure to reduce greenhouse gases, according to Jos Delbeke, director general for climate at the European Commission. The outcome is weaker than what was sought by the 28-nation EU, whose move to include international flights in its carbon market as of last year sparked opposition by countries including the U.S. and Russia.

“There are some bits and pieces in the text that made everybody unhappy,” Delbeke told a conference in Brussels today. “So it may be not far away from an ideal compromise.”

The deal is subject to approval by the ICAO general assembly from Sept. 24 to Oct. 4 in Montreal. The Council, which includes 36 member states of the organization, agreed that the existing emissions trading system may cover airlines in regional airspace until a global system replaces it.

“That means that the EU ETS will be able to continue for intra-European flights,” Delbeke said. “We would also have this part of international flights that is covered by regional airspace.”

The EU agreed last year to suspend emissions trading obligations on flights into and out of Europe. Any extension of the rule or a change to the bloc’s carbon trading law would require approval by member states and the European Parliament.

“We will have a controversial debate in the Parliament,” said Peter Liese, a German member of the assembly. “We need to look carefully at what kind of legislation we can have.”



EU agrees to deal on aviation emissions


BRUSSELS,  Sep 5, 2013

(Reuters Point Carbon) – – The EU agreed to a deal late Wednesday to scale back its law regulating carbon from flights as U.N. negotiators pledged to craft a global pact on aviation emissions that would not take effect for seven years.

EU officials agreed at U.N. talks in Montreal to only include emissions from flights over European airspace in the bloc’s Emissions Trading Scheme (ETS), said the EU’s top climate official Jos Delbeke, a move that would scale down a law that covers all flights to and from Europe.

The deal, which still needs to be signed off by a full meeting of the U.N.’s aviation body ICAO ending October 4 and by EU lawmakers, drew fire from green groups and sparked a renewed threat of legal action by European airlines.

“There are bits and pieces of that text that make everybody unhappy. So it’s maybe not too far away from an ideal compromise,” said Delbeke at an event at the EU Parliament in Brussels.

The deal falls short of the worldwide pact the EU had hoped for in November 2012 when it exempted foreign flights for one year to give ICAO more time to strike a global deal and avert

The agreement will force airlines to surrender more permits for carbon dioxide (CO2) emissions than the current temporary practice of regulating domestic EU flights, boosting Carbon analysts said this week.

Bill Hemmings from the environmental group T&E said the move was an “unnecessary concession” that had little to do with efforts to tackle climate change and did not amount to a guarantee that ICAO would tackle aviation emissions globally.

“This is appeasement on a grand scale. How can it be that the future of EU policy in this sector can be decided behind closed doors by 40 faceless men and a few women in Montreal?” he told the Brussels event.

Peter Liese, a senior member of the EU Parliament, said the assembly needed to scrutinize the plan further but hinted that it may have to accept the measure as the best possible compromise.

“It is far from an ideal solution… (but) I’m really concerned that if we just oppose what is on the table then we may see a total collapse of our effort,” said Liese.

He said the Parliament might propose to merely to extend its suspension the global reach of the EU ETS rather than re-working its law permanently.

“Personally I would not be ready to give another blank check to ICAO and say if they don’t agree in 2016 we just look at it then,” he added, referring to when the U.N. body has pledged to finalize the global deal.


The EU Parliament and member states would have to agree to the new law by early next year to prevent an automatic resumption of existing legislation.

But this could re-start a legal case from the European Low Fares Airline Association (ELFAA) over fears it will distort competition, said John Hanlon, secretary-general of the group.

“We will be watching very closely… If (the deal) is not going to deliver what we have a right to expect, we will reactivate that suit,” said Hanlon.

ELFAA represents some of Europe’s biggest carriers including Easyjet and Ryanair and believes its members face discrimination under an EU-only scheme versus carriers with dominant business outside Europe.

(Reporting by Ben Garside)




See also

GreenAir online

ICAO Council meets to hammer out a compromise on implementing a global MBM to limit growth of aviation emissions

Peter Liese,
Tue 3 Sept 2013 –

As negotiations continue at ICAO on an agreement to implement a global market-based mechanism (MBM) to reduce the net growth of international aviation emissions, there are signs that progress is being made towards a compromise that has the backing of a number of important States, including the United States, those from the EU and possibly China. However, it is believed the wording of the resolution being prepared for the upcoming ICAO Assembly later this month stops short of agreement to adopt a global MBM but merely that a scheme be developed for a decision in 2016. The draft resolution, to be discussed at a special meeting of the ICAO Council tomorrow (Sept 4), is said to carry a US-led proposal that would allow the EU to re-include intercontinental flights into the EU ETS on an airspace limitation basis pending a global scheme. Trade body Airlines for America said it was opposed to such a move.

Last November, the EU ‘stopped the clock’ on the controversial inclusion of intercontinental flights to and from Europe into its emissions scheme (EU ETS) to allow ICAO to continue its work on a global MBM but warned the clock would be restarted in full if the outcome was not a “meaningful” agreement at the ICAO 38th Assembly that starts on September 24. All sides now accept that a global MBM will not be adopted at this year’s Assembly but the EU, as well as industry and NGOs, are looking for substantive progress and a roadmap towards a formal acceptance of one of three possible schemes by the following 39th Assembly in 2016.

Following divergent views amongst the 36 governing ICAO Council members, ICAO Council President Roberto Kobeh González has managed to broker a compromise text for the Assembly climate change resolution over the summer that will see three possible schemes narrowed down to one over the next three years – at this stage, a global offsetting rather than an emissions trading scheme is considered the more likely option – and set out mechanisms for its implementation from 2020. The Council will then be expected to report the results for a decision by the next Assembly, although there is no commitment at present that a scheme would be agreed in 2016.

This would appear to be a postponement of an anticipated decision and fall short of earlier demands by EU climate officials, but reports suggest EU States on the Council have broadly accepted the draft resolution. The EU had also been looking for a framework on the implementation of national or regional MBMs pending the introduction of a global scheme. It was prepared to accept an agreement that would allow it to restart the inclusion of intercontinental flights into the EU ETS on an outgoing flights basis, rather than total emissions on incoming and outgoing flights as previously regulated before ‘stop the clock’. However, it appears the EU may have to compromise still further and accept it can only regulate on emissions within EU airspace.

The airspace restriction though answers the objections of sovereignty infringement that had caused heavy political opposition from countries such as China, India, Russia and the United States. In the past, ICAO has ruled that regulating airspace emissions was impractical and a study by MMU CATE earlier this year found that only 22% of international aviation emissions would be covered under sovereign airspace constraints, even if every country was to adopt such a measure.

At a Brussels seminar in April (see article), Jos Delbeke, Director-General of the European Commission’s Climate Action directorate and the lead EU negotiator in the ICAO MBM discussions, said the airspace approach would be “damn difficult” to implement, but it appears EU States may be willing to accept the limitation. A Bloomberg report suggests the Commission may make proposals in the first half of October on how the EU should respond to the ICAO Assembly outcome with respect to the Aviation EU ETS.

Legislative agreement on the future direction of the EU carbon scheme would be required from the European Parliament, which may not be so accommodating with either the environmental limitation of the airspace approach or the uncertain commitment to agree a global MBM by the 2016 Assembly. The Parliament’s rapporteur on the Aviation EU ETS, Dr Peter Liese, is hosting an open seminar tomorrow evening (Sept 4) at the Parliament, with senior representatives from the European Commission, the aviation industry and environmental NGOs on the panel.

At the April seminar, Dr Liese, who steered the ‘stop the clock’ legislation through Parliament, said the one-year suspension of intercontinental flights from the EU ETS would not be continued unless “very clear expectations” were met at the Assembly. “It is not an option to wait another three years,” he told delegates. “I could not defend this in the Parliament.”

The aviation industry, meanwhile, believes sufficient progress towards a global MBM will be made at this coming Assembly.

“What we would like is for the Assembly to agree a roadmap for developing a global offsetting mechanism to be then agreed at the next Assembly in 2016, for implementation from 2020, along with a work programme covering how monitoring, reporting and verification should be done and agreement on the quality of offset credits. There should also be the means for ensuring the properly designed MBM is in a package with improvements in technology, operations and infrastructure, so they are complementary rather than conflicting,” Nancy Young, VP Environment at trade body Airlines for America (A4A), told journalists recently.

“I am more than cautiously optimistic the Assembly will make significant progress in this regard,” she added.

A coalition of aviation industry interests has just submitted a working paper for consideration by the Assembly setting out its proposals on addressing carbon emissions from international aviation.

However, the industry is likely to be unhappy with the prospect of an ICAO agreement covering the interim period before a global MBM comes into operation that may well see the rapid reintroduction of intercontinental flights into the EU ETS.

Although the EU had pressed for an agreement that would allow it to include emissions from flights departing from European airports, it appears to have settled for the far more environmentally limited airspace proposal. In return for which, opposing states appear to have dropped demands that national or regional MBMs could only be applied on a mutual consent basis. Should a State or group of States wish to go further than the airspace limitation then it or they would have to negotiate an agreement with other States first, says the draft resolution. Exemptions should also be made for States with low air traffic activity on affected routes.

The implication, therefore, is that States that have been staunchly opposed to their airlines’ participation in the EU ETS may no longer have a case for refusing to comply, assuming the EU modifies its directive accordingly. US major airlines had successfully lobbied for domestic legislation that they hoped might see them off the EU ETS hook but now, if the current draft resolution passes its way through the Assembly, they may find themselves once more in the clutches of the EU carbon scheme, this time as a result of a proposal put forward by their own government.

“A4A is part of the global aviation coalition calling for the ICAO Member States to commit to the development of a global emissions offsetting scheme that could be employed to fill the gap should aviation not reach its goal of carbon-neutral growth from 2020 through concerted industry and government investment in technology, operations and infrastructure. As such, we oppose the application of country-based or regional market-based measures to international aviation absent the consent of the country of an airline’s registry and otherwise consistent with the principles in the 2010 ICAO Assembly Resolution,” A4A’s Nancy Young told GreenAir.

Even if the climate change resolution, which covers many other ICAO environmental protection activities, is adopted at the upcoming Assembly, it is not binding on ICAO States. As happened with the climate resolution (A37-19) passed at the 2010 Assembly, States can put in ‘reservations’ on paragraphs within the resolution after the completion of the Assembly that they disagree and will not comply with. India, for one, remains implacably opposed to any application of market measures to its airlines. Brazil, China, Russia and other fast-developing nations have fought hard against the application of MBMs to international aviation, although China is reported to have softened its position.

“Resolutions are legal instruments indicative of policy decisions that the Organization’s supreme body, the Assembly, takes and they have no definitive binding nature in international law; they rather take effect as a form of moral suasion or back up to legal process,” writes Chris Lyle of Montreal-based Air Transport Economics, who has long experience of the ICAO process, in a GreenAir Commentary article published yesterday.

“The Assembly will surely agree on some skeleton for aviation emissions mitigation but how meaningful will it be? The devil will lie in the nuances of the text and in the reality of the follow-up.”