Europe Halts International ETS Implementation

 - November 12, 2012, 12:05 PM
China has stood at the forefront of an increasingly bitter dispute over Europe’s insistence on imposing its emissions trading scheme on non-European carriers such as China Eastern Airlines, but now the European Commission has backed off. (Photo: Airbus)

The European Commission has suspended the implementation of its emissions trading scheme (ETS) for international flights in and out of the European Union for 12 months on the grounds that it now expects to see a deal on a multilateral global alternative at the next ICAO Assembly in September/October 2013. EU climate action commissioner Connie Hedegaard announced the move on November 12 in response to a November 9 decision by the ICAO Council to press ahead with plans for a globally agreed version of the ETS. Non-EU operators now won’t have to submit carbon allowances next April, nor will they have to monitor, report and verify emissions. However, the ETS will still apply to flights within Europe.

The major policy change comes days after Matthew Baldwin, head of the European Commission aviation directorate, told the Association of Asia Pacific Airlines Presidents Assembly on November 9 that Europe is ready to give ground in the face of sustained protests from the U.S., Russia, China, Japan and India over its insistence on including non-EU aircraft operators in the carbon trading-based program. “We have recognized the strength of the opposition to the ETS,” he said. “There is a compromise coming from Europe and the leadership of ICAO. We hope to surprise people in this room on how far we are willing to go…We hope to set a sustainable road map for the [ICAO] assembly meeting next year.”

AAPA delegates received the unexpected statement with cautious welcome. “Though we are complying, we have been vocal in our opposition to the ETS,” said Singapore Airlines CEO Goh Choon Fong. “We are glad to hear compromise is coming out of Europe. This is one of the challenges we have had to face that is out of our control.” Chinese and Indian carriers have already missed an interim deadline to submit emissions data. Meanwhile, expectations run high that U.S. lawmakers will soon present newly re-elected U.S. President Barack Obama with a final version of a bill making it illegal for the country’s operators to comply with the ETS.

“It is a clear signal that Europe realizes it has to retrace its steps,” said AAPA president Andrew Herdman. “ICAO could be looking at a variety of single market [i.e. intra-EU] measures or a global framework. It is likely this could mean a modification to the ETS affecting just outbound flights [and not overflights]. The alternative is much less palatable.”