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22 August 2008
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EU considers cap on air travel emissions[fr][de

Published: Tuesday 27 September 2005    | Updated: Friday 29 June 2007   

CO2 emissions from all international flights are to be capped and open to trading on the EU 'carbon market' under a new Commission proposal. But the system will prove difficult to apply in the case of non-EU airlines.

Background:

The idea of including aviation in the EU emissions trading scheme was first floated in January this year at a European Parliament seminar (EurActiv, 1 Feb. 2005). After a public consultation, the Commission published a study in August, which found that including airlines in emissions trading was indeed feasible from an economic point of view (EurActiv, 1 August 2005).

The move would bring air travel in line with other sectors currently participating in efforts to meet the EU Kyoto target of cutting greenhouse gases by 8% in 2012 compared to their 1990 levels. 

The EU's emissions trading scheme (EU-ETS) currently applies only to energy-intensive industries (cement, iron & steel, electricity generation, etc.). National governments set a cap on CO2 emissions for each individual plant. The plants are then allowed to trade their surplus allowances on a special EU-wide 'carbon market' (one allowance = 1 tonne of CO2). Companies exceeding their limit can buy pollution credits from ones who were more successful at curbing their emissions. A €40 fine would be slapped on companies for every tonne of carbon emitted above their quota. In comparison, current prices for carbon revolve around the €20 per tonne mark.

Both airlines and business-minded politicians prefer the option of including air travel in the EU-ETS to a charge (variable depending on the quantity of energy burned) or introducing a tax on kerosene (fixed).

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On 27 September the European Commission proposed including aviation in the EU's emissions trading scheme (ETS) aimed at curbing emissions of heat-trapping gases which contribute to global warming.

"Aviation's share of overall EU greenhouse gas emissions is still modest at about 3%, but its emissions are growing faster than any other sector and risk undermining progress achieved through emission cuts in other areas of the economy," the Commission said in a statement.

Under the plan, a cap on CO2 would be set for all flights departing from the EU, including international flights, so that European airlines are not put at a disadvantage as against foreign competitors. The measure would thus "apply to all carriers without regard to nationality," the Commission indicated.

"There is a growing consensus in the aviation sector that emissions trading represents the best way forward to cut greenhouse gas emissions," said Transport Commissioner Jacques Barrot.

The actual cap on emissions is yet to be determined but a study published by the Commission earlier this year showed it should not add more than 9 euros to the price of a return ticket (EurActiv, 1 August 2005).

Under the current system, national governments set a cap on emissions of individual companies (in a so-called National Allocation Plan) which is then approved or rejected by the Commission. The system is rather straightforward in so far as the big polluting plants can be easily identified as falling under a member states' responsibility.

But in the case of aircrafts, it remains to be seen who would be in charge of setting a cap on foreign carriers.

A group of experts including airline industry representatives is to hold regular meetings under the supervision of the Commission over the next months to discuss the practicalities and technical aspects of the proposal. Their recommendations will be fed into a report and taken into consideration by the Commission when it tables its formal legislative proposal in the course of 2006.

Positions:

Some already warn of the international impact of the measure and predict it will meet with stiff opposition from foreign airlines, especially in the US where bankruptcy has already hit two companies recently.

The US government has still to adopt a formal position on the issue with US spokespeople in Brussels refusing to make any comment on the proposal at this stage. "We will study [the proposal] very closely," said Loren Hurst of the US EU mission  in Brussels.

"Whether or not operators in non-EU states sign up to this plan remains to be seen," said Caroline Jackson MEP, the environment spokesperson for the British conservatives in Parliament. "If not," she said, "the Commission must keep moving towards a wider agreement which does not unfairly handicap our companies."

Asked by EurActiv, the European Commission said it is too early to determine how the system would apply to foreign companies. It said the issue will be discussed by the group of experts who will submit their report next year.

The European airline industry is less hostile to emissions trading than to other proposals. In a joint paper, several European airline associations urged the Commission to "disregard taxes and charges as they are blunt instruments with marginal environmental benefits but high negative economic impact". 

On emissions trading, airlines recommended that the scheme should be limited to CO2 and intra-EU flights only and that allocations should be defined at EU, not national level. However, the airlines said they prefer a worldwide system to a European one and noted this would "not be possible unless and until the Kyoto Protocol can be renegotiated".

The move to include aviation in the EU-ETS was welcomed by the Green-10 group of environmental NGOs which includes the likes of WWF, Greenpeace and the European Federation for Transport and the Environment (T&E). In a letter, the group urged the commissioners to adopt the proposal as "a first and necessary step" to reduce the climate change impact of aviation. However, they stressed that "an appropriate climate policy for the sector requires a broader package of measures".

The Green-10 added that "issues related to high oil prices cannot be an excuse for not taking a decision. On the contrary, the policy at stake is a structural element in reducing the EU's oil consumption and oil dependence".

"The emissions trading scheme is the best solution for the millions of Britons who enjoy travelling abroad by air," said the British Conservatives environment spokesman in the European Parliament, Caroline Jackson MEP. "A ticket charge or fuel tax would have been unacceptable for travellers as well as carriers," she said.

Next steps:

  • First half 2006: expert group to submit report
  • A formal legislative proposal will follow. It would have to be adopted by the European Parliament and member states at the EU Council of Ministers, a process which usually takes two to three years.
  • Mid-2006: Review of EU-ETS kicks off
  • 2008: second phase of EU-ETS starts. If adopted in time, the proposal to include aviation in ETS could take effect then. If not, the Commission says it could still bring it in at a later stage, before the end of the second phase of the EU-ETS
  • 2012: end of second phase of EU-ETS

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