EU to exempt foreign airlines from ETS

Commission wants to freeze ETS enforcement until Autumn 2013

Connie Hedegaard, European commissioner for climate action, announced today (12 November) that the Commission intends to temporarily exempt non-EU flights from the EU’s Emissions Trading Scheme (ETS) in response to progress made in global talks.

Last week, a meeting of the International Civil Aviation Authority (ICAO) established a high-level group on market-based mechanisms and decided to limit the number of options being considered on a global level from three to one. Hedegaard said today that this means a global deal on reducing aviation emissions could be reached next year. The Commission has said such a deal is a precondition for aviation to be exempted from the ETS.

“In order to create a positive atmosphere around these very important [ICAO] negotiations, I have just recommended in a telephone conference with the 27 member states that the European Union stops the clock when it comes to enforcement of the inclusion of aviation in the EU ETS to and from non-European countries, until after the ICAO general assembly next Autumn,” Hedegaard said at a press conference. Foreign airlines will need to continue accounting for their emissions, but will not be subject to any payment during the freeze.

“If this exercise ends in nothing, then needless to say we are back to exactly where we are today with the EU ETS, and we are back there automatically,” she said, adding that this was a “window of opportunity” for third countries to agree to a global deal.

Under the ETS legislation, all flights landing or taking of from an airport in the EU must purchase credits for the emissions emitted from the entire flight, even if most of the flight takes place outside EU airspace. The airlines had to account for all carbon emitted from January 2012, with the first payment deadline coming up in April 2013. Third countries such as the United States, Russia and China have said this amounts to an illegal tax.

Member states and the European Parliament will have to approve the Commission’s proposal for a freeze. Hedegaard said regardless of when the legislation can enter force, political groups and member states can send a political signal by endorsing the idea for a freeze now.

Environmental campaigner Greenpeace criticised the Commission’s decision. “It is still highly uncertain whether ICAO will actually deliver an effective international mechanism by autumn next year,” said Greenpeace in a statement. The group urged MEPs and member states to reject the freeze proposal, saying there has not been enough progress at ICAO to warrant it.

“Only after adoption of an effective and ambitious global mechanism by ICAO should the EU start revising aviation rules under ETS,” the group said.

German Liberal MEP Holger Krahmer, who has been critical of the inclusion of foreign airlines, said the Commission is trying to put a positive spin on what amounts to backing down on a failed policy in the face of international pressure. “This is a friendly formulation for [saying] the project is buried,” he said. “The conclusion is, a European island is not the solution for climate protection.”

Campaign groups said now that the EU has frozen the aviation issue, third countries must respond by agreeing a global deal. “Obama finally has the chance to prove that he means what he said on climate change in his victory speech,” said Bill Hemmings of Green transport group T&E. “The US ambassador said the US could not talk with ‘the threat of the ETS hanging over everybody’s head’; if today’s move still does not clear the sky, we don’t know what would.”
European Voice, Nov 12, 2012