Prospects of the ETS survival weakened by pressure against it from UK, Germany and France

It’s not looking good for the European Commission’s proposal to undo an EU law that would have charged all airlines for the emissions of flights taking off or landing in Europe. An increasing number of member states and MEPs are coming out in opposition. But they don’t have a problem with the retreat. They say the Commission isn’t retreating far enough.

Last week Germany, France and the UK told a meeting of member states that they want to change the proposal to a more complete surrender. The Commission proposed to change the law so that emissions that take place outside EU air space are exempt. But Germany, France and the UK want to exempt foreign airlines from the Emissions Trading Scheme (ETS) entirely – even for the portions of flights that take place within EU airspace – because anything less would not be politically acceptable to China, India, Russia and the United States.

Seeing the writing on the wall, many MEPs are now quickly lining up against the Commission as well. But the Parliament is still likely to be evenly split, when it comes time to vote, between those who oppose any retreat, those who support the Commission’s semi-retreat, and those who support the member states’ full retreat.

Sovereignty spat

The ETS Directive, adopted in 2008 by the Parliament and member states, mandates that from January 2012 all flights leaving or landing at an EU airport must purchase credits for the carbon emissions they have emitted.

But after global powers including China, India, Russia and the United States objected on sovereignty grounds, the Commission announced it would temporarily exempt non-EU airlines from the rules, to give the International Civil Aviation Organisation (ICAO) room to reach a deal for a global market mechanism to reduce aviation emissions.

The freeze is set to expire at the end of this year. In September the EU offered to permanently exclude emissions which take place outside EU airspace – if ICAO at least agreed a timeline to a future global mechanism. Unlike with the freeze, foreign airlines would still be liable for emissions taking place within EU airspace for flights landing or taking off at EU airports.

ICAO did adopt a timeline to a future deal in 2020, and so in October the European Commission made good on its offer, proposing to exempt from the ETS any emissions that take place outside of EU airspace. This angered many in the European Parliament, as well as many European airlines, which said the Commission was caving in to foreign pressure even though nothing real had been agreed at ICAO.

However even this offer from the Commission did not mollify the foreign powers. Charging their airlines anything for emissions, even those that take place inside EU airspace, would be a violation of sovereignty, they insist.

The proposal to amend the ETS legislation has to be approved by the Parliament and Council.  Airbus, fearful of retaliatory action from China, has been leaning on Berlin, Paris and London to change the proposal so that only flights flying entirely within the EU would be subject to the ETS.  Such flights are, obviously, almost entirely operated by European airlines. Foreign airlines operating in Europe will be off the hook.

This week Finnish centre-right MEP Eija-Riitta Korhola, who is leading the file in the Parliament’s industry committee, submitted a report backing the intra-EU approach.

Centre-right German MEP Peter Liese, who leads on the issue in the environment committee, is defending the Commission’s airspace approach. [See the Draft Report by the Committee on the Environment, Public Health and Food Safety entitled “Draft report on the proposal for a directive of the European Parliament and of the Council amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions”  at  ENVI draft report Nov 2013 ].

Meanwhile many Green and Socialist MEPs are still furious that the EU caved in so easily on this issue and they do not want to vote for any change to the law.

Though the upcoming Parliament vote on this issue may be split, it’s pretty clear who will win this fight in the end. With Berlin, Paris and London all intent on changing the legislation to match the demands of third countries, it’s very unlikely that the Commission’s original proposal will see the light of day. And there are few with the appetite left to fight for it.

A traumatic experience

The aviation emission dispute has been fairly traumatic for Brussels lawmakers. It now appears certain that a democratically-enacted law, which Berlin, Paris and London all approved back in 2008, will be easily bent through foreign pressure. Even the most stalwart European lawmakers have admitted privately that they could not hope to hold out against the combined pressure of Beijing, Washington and Airbus. Admitting this limit to EU influence and respect in the world has been a tough process.

“Why do we even bother making laws?” one disgruntled Parliament assistant grumbled to me. “The US just comes in and says, no, that’s not your law, this is your law.”

The irony, of course, is that a similar inclusion of international aviation in carbon trading was part of the US climate change bill that was being drafted back in 2008. That climate bill eventually failed. But what if it hadn’t, and the US had included foreign flights in its cap and trade scheme? Would the international community have demonstrated the same lack of respect for US law as it has for EU law? Would Washington have been so willing to change its laws because of the displeasure of its global partners?

For the EU, the cave-in is already guaranteed. The question now is how big it will be. The choice now lies between partial retreat and full retreat. The EU will most likely choose the latter. It’s a less-than-inspiring saga for Europe, and it’s one that lawmakers seem to want to get behind them as quickly as possible.

http://www.europeanvoice.com/page/european-voice-blogs-dave-keating/3554.aspx?blogitemid=1823

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See also

Peter Liese MEP seeks to strengthen draft EU directive on aviation in the ETS

November 29, 2013      .

The European Parliament’s environment committee rapporteur, Peter Liese, wants to tighten an EU directive on aviation in the EU ETS. The German liberal MEP, who is steering the draft directive through Parliament, is backing the EC’s compromise proposal, while proposing amendments to further strengthening the ETS. Peter Liese is advising the EU to revise its relevant legislation by 2016, not 2020, to put more pressure on ICAO to reach a global deal sooner rather than later. ICAO agreed in October to develop a global MBM to reduce aviation CO2 emissions, at its next general assembly in 2016. That could take effect in 2020. But European trust in the ICAO outcome is waning, as its record on action on CO2 in the past is dismal. Liese said: “….it is not at all sure that the ICAO Assembly in 2016 will really succeed to adopt clear rules for the MBM.” His draft proposal is effectively threatening the ICAO that the EU will revert to a full ETS from 2017 if global agreement is not reached. Already aviation gets special treatment in the ETS as only 15% of its permits are auctioned (higher % for other sectors) and the cap on emissions is only 5% lower, while other sectors have to reduce their emissions by 21% from their 1990 level by 2020. Environmental organisations reacted warmly.

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