Aviation emissions plan hits turbulence

When the European Commission in January proposed including emissions from aeroplanes in the EU emissions trading scheme (ETS), it said it had found a cost-effective way of combating climate change. Many people in Europe and beyond have still to be convinced.

The proposal for an aeroplane emissions directive was developed in response to claims that aviation was escaping the environmental scrutiny applied to almost all other EU sectors today.

Aviation accounts for less than 3% of global carbon dioxide (CO2) emissions, compared with 23% for road transport and 20% for domestic buildings. But the sector is growing fast. There is also evidence that greenhouse gases produced at the height of a flying aeroplane are twice as potent as those emitted lower down.

Aviation emissions are not covered by the Kyoto Protocol on climate change, under which EU countries adopted ambitious greenhouse gas reduction targets. Aviation fuel also benefits from a tax exemption worth €35 billion every year, reducing the incentive to use new low-emission fuels.

The Commission’s proposal would oblige all companies using EU airspace to buy and sell CO2 emission permits from each other, in the hope of encouraging fuel efficiency and clean technologies. The change would affect intra-EU flights from 2011, with international flights landing at or taking off from an EU airport joining a year later.

When the proposal was published, the Association of European Airlines complained that it had not been properly consulted. On the other hand, T&E, an environmental group, said that the Commission had "ticked off several items on the industry’s wish list".

This lack of enthusiasm for the proposal was an early indicator of the problems ahead.

The Portuguese EU presidency has put aviation emissions trading on the agenda of its December Environment Council and says that it would like to get a first reading agreement on the proposal that month. Given the number of outstanding issues still up for debate, many politicians and interest groups are not taking Portugal’s ETS ambition too seriously.

Ongoing talks between EU ambassadors are said to have revealed deep differences of opinion. Sweden has suggested that all aviation emission permits be auctioned off to companies at the beginning of each trading period, rather than being given away for free as is the case for other sectors under the ETS. The Commission proposal said that it expected some permits to be auctioned, but left the amount up to member states.

Germany and the Netherlands have said that they could support some auctioning, but less than Sweden. The UK has hinted that it would welcome an earlier start date for trading, while countries including Poland hope that the date will be pushed back.

Before reaching governments, the proposal has to get through European Parliament committee votes in September and October, with a plenary vote in November. MEPs have already raised several issues that are unlikely to win support from all member states.

Instead of a two-tier 2011-12 start date, German centre-right MEP Peter Liese, rapporteur for the environment committee, says that all flight companies should join the ETS from 2010. Half of all emission permits should be auctioned off to companies.

But an opinion from another German centre-right MEP, Georg Jarzembowski, rapporteur for the transport committee, suggests a 2012 start date for everyone and the auctioning of just 5% of permits.

Looming over this institutional in-fighting is the problem of raising international support for a trading scheme that would involve non-EU airlines from 2012.

The US government says that Europe has no legal grounds for making third country companies join its trading system and has threatened a legal challenge.

European experts say that the only international standard applied to all aviation is the principle of non-discrimination, as set out in the Chicago Convention on International Civil Aviation. According to the Council and Commission legal services, this means that, to avoid discrimination, any trading system would have to be applied to all carriers using EU airspace.

A meeting of the International Civil Aviation Organization (ICAO) in 18-28 September will try to find a solution and issue its opinion.

Whatever the ICAO says, both sides look likely to follow their own differing legal opinions, leaving diplomats working overtime to avoid a trade dispute.

At the same time, the EU has to win over another critic, arguably one even more powerful and intimidating than the US legal authorities.

Although increasingly interested in environmental initiatives, public opinion remains firmly attached to the new phenomenon of cheap air tickets. A poll from UK research company ICM in May found that 80% of respondents did not want to see the price of a plane ticket rise as part of climate change policies.

The Commission proposal estimates that bringing aviation into the ETS could see price increases of up to €9 per ticket on EU flights, with larger hikes expected for international travel.

When the European Commission in January proposed including emissions from aeroplanes in the EU emissions trading scheme (ETS), it said it had found a cost-effective way of combating climate change. Many people in Europe and beyond have still to be convinced.