Europe To Grant Further ETS Concessions after ICAO Deal

 - November 1, 2013, 2:00 AM

The European Commission is proposing for its existing emissions trading scheme (ETS) amendments that would confirm the continued exemption from the cap-and-trade system for flights outside the airspace of the 28 European Union member states as well as European Economic Area states Iceland, Liechtenstein and Norway. The proposal follows an agreement reached on October 4 by the general assembly of the International Civil Aviation Organization (ICAO) that is expected to lead to a global market-based mechanism (MBM) for curbing aircraft emissions by 2020.

On October 16 the EC said the revised ETS rules will take effect in January next year, even though it might take until March for the European Parliament and the EU Council of Ministers to formally ratify the legislative change. Flights within EU airspace will continue to be subject to ETS, but the EC has announced some new exemptions for small emitters that might give relief for some business aviation operators.

The new EC proposals include a complete exemption from ETS for non-commercial aircraft operators emitting fewer than 1,000 metric tons of carbon dioxide (CO2) per year. The EC is also proposing new simplified procedures for monitoring, reporting and verifying CO2 emissions for commercial and non-commercial operators with fewer than 25,000 metric tons of annual emissions. EU states will be permitted to allow even more simplified compliance procedures for non-commercial operators with fewer than 25,000 metric tons of emissions. However, no further details of these simplified procedures were available at press time.

‘International Dialogue Under Way’

NBAA and other industry groups, including the European Business Aviation Association and the General Aviation Manufacturers Association, broadly welcomed the ICAO move in that it confirmed the reversal of EU-ETS’s application to all flights to and from EU airspace. They also welcomed ICAO’s emphasis on technological solutions to reducing emissions in tandem with MBMs.

“Although not perfect and certainly not everything we’ve worked for, [the ICAO agreement] promotes an international dialogue that is focused on simple, more workable measures for addressing aircraft emissions, measures that can be built around various operator types and sizes,” said NBAA president and CEO Ed Bolen.

Under the ICAO agreement the organization’s 36-nation Council has been given responsibility for drawing up a proposed global MBM based on a somewhat loose set of guidelines contained in the annex of Working Paper 430. The goal is that the next ICAO general assembly will approve the proposed global MBM, which would then take effect from 2020. The EC has indicated that it will reserve the right to review the ICAO plan in 2016 to decide whether it considers the proposed MBM to be a satisfactory alternative to ETS.

One specific requirement of the ICAO agreement is that member states (such as the EU) that implement their own MBMs before the introduction of a global MBM must exempt routes to and from developing world states whose share of international civil aviation activities accounts for less than 1 percent of total revenue ton-kilometers. For now, this requirement could apply only to the EU-ETS since it is the only existing MBM. The agreement also urges, but does not require, ICAO member states to prepare action plans for reducing carbon dioxide emissions from aircraft by the end of June 2015.