EU ETS opponents to meet July 31; AEA attacks carbon permit costs

A number of countries opposing the European Union Emissions Trading Scheme (EU ETS) are due to meet again July 31, just as the EU considers intervening in the carbon market to inflate prices.

“The so-called ‘coalition of the unwilling’, including 15 non-EU states opposing the EU ETS, are gathering on July 31 to discuss possible actions against the scheme,” Assn. of European Airlines (AEA) acting secretary general Athar Husain Khan said.

The coalition last met Feb. 21-22 in Moscow This session culminated in a joint declaration and a series of suggested retaliatory measures to be used against European industry.

An earlier meeting, which took place in late 2011, resulted in a working paper that formally opposed Europe’s approach to the EU ETS. The principles of this paper were endorsed by the ICAO Council.

“The fact that the Commission now wants to artificially manipulate the price setting mechanism of ETS gives these non-EU states even more arguments,” Husain Khan said.

Separately, AEA members have criticized an EC proposal that aims to artificially inflate the cost of carbon permits traded in the EU ETS.

On Jan. 1, aviation joined the EU ETS despite strong opposition from a large number of non-European countries that feel the scheme infringes on their sovereignty .

Now EU Climate Action Commissioner Connie Hedegaard has tabled a proposal, aimed at reviving the depressed market for carbon permits. This could increase airline costs and further-escalate international tensions around the EU ETS.

“On July 25, the European Commission presented a package of three documents aimed at strengthening the carbon market and, in the final analysis, raising the price of carbon by modifying the 2013-2020 calendar for auctions of emission allowances under EU ETS,” AEA said.

The association accuses the Commission of “changing the rules of a game which has already started” and undermining the ETS’s status as a market-based measure.

“We have already seen retaliation from non-EU countries that are very, very upset by Europe’s ETS scheme,” AEA acting secretary general Athar Husain Khan said. “The declarations of Commissioner Hedegaard might have further impact on the negotiations on a global level. There is a lot at stake and it is essential that policy-makers also realize this threat.”
source:ATW July 27, 2012