Despite an apparent historic consensus at the ICAO Triennial Assembly in Montreal in early October to develop a global market-based mechanism for managing aircraft emissions, the European Commission (EC) has pressed ahead with plans to implement its emissions trading scheme (ETS) in the meantime. The key difference lies in the fact that the new policy would apply only to fuel burned within European airspace, rather than cover full intercontinental flights to and from European cities. But, crucially, it would still apply to non-EU airlines, provoking renewed resistance from the air transport industry, even though European officials always made clear their intention to take some form of limited unilateral action ahead of implementation of the envisioned worldwide system.
“It would take us back to the brink of a trade war, a situation the industry certainly would want to avoid,” warned Paul Steele, senior vice president of member and external relations for the International Air Transport Association (IATA), at a media event last month in Geneva, Switzerland.
The European Parliament must vote on the plan by April for airlines to meet emissions reporting requirements for applicable flights in 2013. Schedules call for a preliminary vote to move forward on January 30 in the parliament's environment committee. Upcoming elections in late May for most of the parliament’s 766 members appear sure to complicate the political wrangling.
The new plan still requires all airlines that fly into or out of airports in the European Economic Area (EEA) to account for their carbon dioxide emissions and purchase carbon credits for any that are not covered by an allowance of free credits. The EEA comprises the 27 members of the EU plus Norway, Iceland and Liechtenstein. Airlines would not have to report their emissions while flying over Switzerland, which is a member of neither the EU nor EEA.
More than a dozen other countries, known as “the coalition of the unwilling”—including the U.S., China, India, Canada, Brazil and Russia—opposed the original EU-ETS scheme on sovereignty grounds. The U.S. Congress passed the European Union Emissions Trading Scheme Prohibition Act 2011, barring U.S. aircraft operators from participating in the EU-ETS.
China used economic leverage, holding up a $12 billion order for Airbus aircraft. The EU backed off, deferring in November 2012 to the forthcoming ICAO assembly and implementing a “stop the clock” policy that applied only to European airlines. The Chinese then allowed the order for Airbus A330s and A380s to proceed.
Plans for the EU to forge ahead on its own have drawn dissension within Europe. French, German and UK government leaders—three countries with huge stakes in Airbus—have publicly opposed the new EU emissions implementation.
Meanwhile, European low-fare carriers such as Easyjet and Ryanair object to the prospect of EU-only fees diminishing their competitiveness against non-European airlines. European Low Fares Airline Association (ELFAA) secretary general John Hanlon has called for reversion to an all-flights ETS as “the real way to remedy the reduction in environmental effectiveness, instead of the attempt to inflict further discriminatory and distortive penalties on those operators and their end-customers, EU citizens.”
Environmental groups consider the ICAO resolution, which calls a market-based mechanism plan by 2016 and implementation by 2020, a delaying tactic. Peter Liese, a spokeman for the European Parliament's environmental committee, called the ICAO resolution “a very modest result.”
“We have no guarantee that a system will be introduced in 2020 and that the benefit for the environment is substantial,” he added. “There are too many ifs and buts. EU law has to be applied and we can’t give in to threats. We must not capitulate and be bullied by third countries.”