EU Climate Commissioner Connie Hedegaard has put plans on hold to make international airlines pay for their carbon emissions, so as to give time for the UN airlines body to devise an alternative global scheme that could avoid a damaging trade dispute.
Hedegaard told a press conference in Brussels: “In order to create a positive atmosphere around these very important negotiations, I have just recommended in a telephone conference with 27 member states that the EU stops the clock when it comes to enforcement of aviation into the Emissions Trading System (ETS) to and from non-European countries until after the ICAO assembly next autumn.”
But the ETS freeze will not be open-ended she insisted. “If this exercise ends in nothing, we are back to exactly where we are today with the EU ETS,” she added. “We are back there automatically.”
Hedegaard ruled out extending the suspension for another year, in a conversation with reporters after the meeting.
EURACTIV understands that the pause was choreographed in advance of a meeting of the International Civil Aviation Organization (ICAO) Council last Friday, largely in return for a roadmap timetable to a global replacement deal.
“In the run up to the ICAO council, the EU did signal its intention to offer some form of olive branch, providing that ICAO could reinforce the urgency with which it was looking at the issue internationally, and that’s what the council did on Friday,” an insider to the negotiations told EURACTIV.
“It was understood at least by the people on the council,” he said. The EU’s negotiating team was present in Montreal, the scene of the ICAO’s conference, for “a long time” before the meeting, the source added.
Of the market-based measures currently on the table – for mandatory emissions offsetting with or without fund-raising capacity, or an international cap-and-trade scheme, Hedegaard told EURACTIV that the EU favoured a global ETS.
She also signalled that Brussels had been buoyed by two key aspects of the ICAO council conclusions.
“These gave us clarity on how you can you have your regional schemes while you are waiting for a global market-based system to start, and also progress and timetables on the global market-based mechanisms.”
This latter point had been “so far a very controversial issue but they were mentioned there as part of what the High-Level Political Group [HPLG] will have to do,” she said.
EU states had been preparing to take enforcement measures against non-compliant airlines from China and India from 30 April next year, when carriers were to have been obliged to begin surrendering carbon allowances.
The US Congress's Thune Bill has also authorised the non-participation of US airlines in the ETS although, where non-compliance is concerned, Washington has previously kept its cards close to its chest.
Good conversations with Washington
Hedegaard told EURACTIV that the EU had had “good conversations” with Washington in advance of the ICAO meeting.
Tim Johnson, director of the Aviation Environment Federation in London, said “it looks as if the US went along with the positive mood of the conference, but it is too early to link it to the Obama administration”.
The test of that would come in how Obama – and the US Congress – dealt with the Thune bill, he said.
Asked by EURACTIV if there was a danger that the EU could end up with a weaker scheme than the ETS next autumn, with global backing that would leave the EU isolated, Hedegaard was cautious.
“There are always in such things lots of dangers,” she said. “We have managed to get ICAO to take the first steps forward – the first and biggest steps for a very long time – and of course we should also try to work with President Obama after his re-election,” she said.
Johnson said that it would be tough for the Commission to reject a scheme that emerged from the ICAO process. But he noted that emissions reductions would be larger under a weaker global scheme, than in a more stringent Europe-only system.
Closer to home, the Commission will now have to get the assent of the European Parliament and the Council of EU ministers to revise enforcement passages in its ETS legislation, and allow the negotiating pause.
Immediate responses from market analysts were downbeat. “This would drastically reduce the scope and environmental impact of the aviation’s sector’s inclusion”, said Andreas Arvanitakis, an analyst at Thomson Reuters Point Carbon.
The withdrawal of non-EU flights from the ETS would reduce the aviation sector’s participation by “around 60%”, Point Carbon said.