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EU 'stops the clock' on ETS

By control on November 12, 2012

Global opposition has forced the European Union to conditionally freeze its emissions trading scheme for one year. EU Climate Commissioner Connie Hedegaard said she is seeking to create “a positive atmosphere” for global talks concerning aircraft emissions management — an approach lauded by many in the aviation industry.

In a press release, Hedegaard said seeking a global approach to sustainability has been the EU’s goal since day one. “Nobody wants an international framework tackling CO2-emissions from aviation more than we do,” she said in a statement. “Our EU legislation is not standing in the way of this.”

“On the contrary, our regulatory scheme was adopted after having waited many years for ICAO to progress,” Hedegaard added. “Now it seems that because of some countries’ dislike of our scheme, many countries are prepared to move in ICAO and even to move towards a market based mechanism at [a] global level.”

The U.S. government has been particularly vocal about its opposition to the ETS and passed Senate Bill S. 1956 — “European Union Emissions Trading Scheme Prohibition Act of 2011” — in September. The House of Representatives approved the legislation Tuesday, while acknowledging the EU's new stance on the issue.

"Fortunately EU leaders who have promoted imposing an unjust tax on international aviation have temporarily backed off the emissions tax proposal,” John Mica (R-Fla.) said in a statement. “The proposal must not be allowed to resurface in one year like a phoenix rising again from the ashes. We must ensure U.S. operators, airlines and consumers are not stuck with a future unfair tax burden."

In the press release, the European government announced that it is no longer requiring airlines to submit their carbon allowances in April 2013 for emissions generated during 2012. Still, the EU hasn’t completely killed off the scheme. Hedegaard said that if ICAO hasn’t reached a global solution to lowering carbon emissions by next fall, the EU will move forward with the scheme.

Hedegaard’s cautionary note aside, the International Air Transport Association has applauded the EU’s move. Tony Tyler, IATA director general and CEO, said “stopping the clock” on the ETS “represents a significant step in the right direction and creates an opportunity for the international community.”

Recent estimates by The International Air Cargo Association said complying with the ETS — in which carriers who exceed the EU’s carbon limits must buy credits — could cost the industry $3.5 billion by 2020. Nearly every governmental body around the world reacted in the same way, banding together to not allow their carriers to participate in the ETS, pushing for a change through ICAO, and meeting with each other to discuss solutions. The Chinese and Indian governments even went so far as to imply that Airbus would not be receiving any business if the ETS went forward.

Last month, Delta Air Lines CEO Richard Anderson told Air Cargo World that these threats might finally convince the EU to pursue another option.

“I think that the EU ETS is probably going to get solved by the fact that China and India aren’t going to buy any Airbus airplanes,” Anderson said last month. “This industry has the best track record, I think, of any industry in the world on reducing emissions. The problem with the ETS is that it’s trying to do out-border regulation,” he continued. “The way the system is set up, it is seeking to regulate emissions over other countries, so it’s extraterritorial.”

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