Aviation ETS proposal ‘only a small step towards equal treatment’

March 08, 2017

Flights to and from Europe would continue to go unregulated, indefinitely, within the EU emissions trading system (ETS), under a proposal last month from the European Commission.

So far just 67 countries have signed up to commence a seven-year voluntary offsetting phase beginning in 2021. The participation of Russia, India and potentially China, as well as other countries, in the mandatory phased slated to begin in 2028 remains far from clear. Agreement on effective criteria to govern the environmental quality of the offset programmes – discussion is ongoing – along with adoption of an effective enforcement regime, will prove crucial in determining whether the agreement will have a positive impact on the environment. The US and industry are pushing for the cheapest and weakest offsets possible.

T&E said the Commission’s decision to continue to exclude extra-EU flights cuts across the conclusions of its own impact assessment. That assessment found that even if the recent UN global aviation deal gets off the ground, it will fall well short of the ambition required by the Paris agreement.

T&E’s aviation director, Bill Hemmings, said: ‘The Commission has chosen to kick the can down the road – this time indefinitely – all for a voluntary deal which is years from coming into operation and which may never actually reduce the climate impact of flying. There is no way around it.

‘Europe has committed to emissions reductions in the Paris agreement which require aviation reductions well beyond what is envisaged in this proposal. By letting aviation off the hook again, other sectors – be it steel, or cement perhaps – will now have to do more on cutting their climate emissions even while air travel demand soars.’

The Commission does propose a tightening of the cap on emissions after 2021 for those flights still covered within the ETS. T&E said this is long overdue but is still only one small step towards ending the aviation sector’s special treatment within EU climate legislation. The aviation sector receives €40 billion in tax exemptions a year while the EU ETS only costs airlines a tiny fraction of this.

Bill Hemmings concluded: ‘Reducing aviation’s emissions cap fixes a bizarre situation where we had a cap and trade system with no declining cap. It needs to be backed up with a more comprehensive plan to cut the proliferation of subsidies and tax breaks enjoyed by the sector. Without concerted action, the sector will continue to be a deadweight on Europe’s efforts to cut emissions.’

Meanwhile, governments agreed a number of reforms to the overall EU ETS, including doubling the ‘bank’ of surplus allowances and a significant cancelling of these surplus allowances. The Market Stability Reserve (MSR), which has been put forward by the Commission in its separate proposal to overhaul the ETS, is supposed to reduce the surplus and thereby make carbon more expensive.