EU to continue with only intra-EU flights in the ETS, and all long haul excluded – at least for several years
The European Commission has published its proposal for aviation in the EU ETS, covering both the remainder of the 3rd trading period and the 4th trading period (that was left out of last year’s proposal). This says that flights to and from Europe will remain excluded from ETS, this time indefinitely. But flights within Europe remain in the ETS, and from 2021 onwards they’ll be subject to a declining cap (until now this cap was static). That is welcome, as it is the means by which emissions are reduced. However, this hugely diminished version of aviation inclusion in the ETS has meant, since 2013, excluding flights to and from Europe, which represent about 75% of the sector’s CO2. The Commission will review things in a few years to see how ICAO’s global market based measure [offsetting] is getting on. The review might even decide to apply ETS to all flights, or it could abolish aviation ETS entirely. Commenting on the EC proposal, Bill Hemmings from Transport & Environment (T&E) said: “The Commission has chosen to again suspend the only effective measure to regulate aviation emissions, all for a voluntary deal which is years from coming into operation and which may never actually reduce the climate impact of flying. By letting aviation off the hook again, other sectors will now have to do more on cutting their climate emissions even while air travel demand soars.”
The European Commission legislative proposal is at http://ec.europa.eu/transparency/regdoc/rep/1/2017/EN/COM-2017-54-F1-EN-MAIN-PART-1.PDF
The T&E response is copied below:
EU lays bare doubts over ‘global’ aviation CO2 scheme
February 3, 2017 (Transport & Environment – T&E)
Aviation is even further away from doing its fair share to achieve the Paris climate goals after the European Commission proposed today that CO2 from flights to and from Europe should continue to go unregulated in the EU emissions trading system (ETS), sustainable transport group Transport & Environment (T&E) has said.
The Commission’s decision cuts across the conclusions of its own impact assessment that even if the recent UN global aviation deal gets off the ground it will fall well short of the required ambition.
Bill Hemmings, aviation director at T&E, said: “The Commission has chosen to again suspend the only effective measure to regulate aviation emissions, all for a voluntary deal which is years from coming into operation and which may never actually reduce the climate impact of flying. By letting aviation off the hook again, other sectors will now have to do more on cutting their climate emissions even while air travel demand soars.”
Today’s proposal says the exemption of flights to and from Europe, which represent three-quarters of the sector’s emissions , can be reviewed should the offsetting deal agreed by UN aviation body ICAO continue to disappoint. Only 67 countries have so far signed up with Russia, and India and potentially China set to sit on the sidelines. Decisions on quality criteria for offset programmes have yet to be taken though the US and industry are pushing for the cheapest and weakest offsets possible.
The proposal does envisage a tightening of the cap after 2021 for that part of the aviation sector which remains covered. This is welcome and long overdue but T&E cautioned that it is only one small step towards reining in aviation’s special treatment.
The sector receives €40 billion in tax exemptions a year  while the EU ETS only costs a fraction of this.
Despite an ongoing obligation to act, the proposal continues to ignore the substantial non-CO2 effects of aviation, which having a warming impact equal or greater to the CO2 effects of flying.
Bill Hemmings concluded: “Reducing aviation’s emissions cap fixes a bizarre situation where we had a cap and trade system with no declining cap. It needs to be backed up with a more comprehensive plan to cut the proliferation of subsidies and tax breaks enjoyed by the sector. Without concerted action, the sector will continue to be a deadweight on the Europe’s efforts to cut emissions.”
Notes to editors:
 T&E, “Does aviation pay its way?” (2013)
There’s also an impact assessment to be published shortly and which T&E have seen, and it is fairly critical of ICAO’s global measure because of the legal uncertainty and issues with offsetting. Its nothing that the NGOs have not been saying already, but it is nice to see it laid out in a 98 page impact assessment.
The comment by Carbon Market Watch (CMW):
EU’s climate reputation bruised as long-haul flight exemption extended
BRUSSELS: The European Commission has proposed to continue to exempt all flights to and from Europe from paying for their pollution under the EU’s carbon market rules, following an international agreement on aviation emissions. An uncertain global agreement should not be allowed to undermine EU’s climate efforts.
The proposal comes after the UN aviation body, the International Civil Aviation Organisation (ICAO) adopted an offsetting scheme that will enter into a voluntary pilot phase in 2021.
While the international scheme is a modest first step to address growing emissions from aviation, it is not in line with the Paris climate agreement’s goal to decarbonise by the second half of this century and limit global temperature rise to below 2°C. The scheme will only cover a portion of emissions growth above 2020 levels, and does nothing to address emissions below the 2020 level.
Critically, unlike the EU ETS that sets a cap on emissions, it allows airlines to pollute more as long as the emissions are offset through the purchase of carbon credits from various projects around the world. A number of critical details are still unclear including the credit quality of those offsets, what countries will participate, and how the scheme will be enforced.[i]
Kelsey Perlman, Policy Officer at Carbon Market Watch said:
“The EU has once again caved in under pressure from countries like the US and Russia. The global aviation deal is not strong enough to justify the extension of this derogation. The EU should continue to work towards a global solution, but show climate leadership and not let the international agreement undermine domestic ambition.”
EU’s 2030 emissions reduction goal at risk
Exempting international flights from the EU ETS erodes the bloc’s domestic climate target of at least 40% less emissions by 2030, because the target assumes that outgoing flights from Europe would be covered.
The European Commission itself estimates that the exclusion would increase the massive oversupply in the EU ETS by 300 million allowances.
Originally, the scope of aviation under the EU ETS was meant to cover flights to and from Europe and within the European Economic Area (EEA) and Switzerland. The scope was reduced in 2013 under pressure from airlines and states, pending talks at the ICAO.
Aviation emissions account for approximately 4.9% of all global warming and if left unaddressed, are projected to grow by up to 300% by 2050. The sector enjoys massive subsidies including an exemption from VAT, but is currently paying practically nothing for the pollution it causes.
European aviation CO2: there should be no free ride for the aviation sector – Peter Liese
Peter Liese, who has been the rapporteur on aviation carbon legislation in the European Commission, has commented that the aviation sector should be doing more to cut carbon. He said the proposal by the European Commission to at least keep intra-European flights in the ETS is a basis for negotiations but the sector should contribute as much to emission reductions as other industries do. He said the Parliament will continue to exert pressure for ambitious climate protection measures in intercontinental flights. He welcomed the proposal to have a reducing cap on the carbon of intra-European flights, as this imposed the same linear reduction factor to aviation as for other industries. “The previous treatment was unfair to other sectors, like the steel industry, where many people are worried about their jobs. How can you tell a steelworker that his company has to meet high climate protection requirements, while other economic sectors do practically nothing?” However, the deal planned by ICAO “is by no means ambitious.” He proposes that the EU “should continue to exempt intercontinental flights until 2021, but then reinstate them if the ICAO rules are not clear. We should also include flights to countries which, like Russia, refuse to join the ICAO agreement.” Trump and Putin should not dictate what we do in Europe.
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