The EU’s Environment Council meets Tuesday to discuss Europe’s emissions trading system. The EU ETS is often described as the “flagship” of Europe’s climate policy and is currently the largest carbon market in the world. However it has been malfunctioning since a systematic oversupply of credits built up as a result of both Europe’s economic crisis and weak ambition in setting the cap when the ETS was first established.
· MEPs also back tightening cap on aviation emissions.Support from ports and cargo owners for last week’s vote by MEPs to include shipping emissions in the EU emissions trading system (ETS) has been sharply criticised by shipowners. The European Community Shipowners' Associations (ECSA) said it ‘deplores’ the shipping industry’s backing for Europe regulating ship CO2 as a ‘first move’ to kick start action at global level. Shipping in Europe has CO2 emissions equal those of the Netherlands.
Director-general of the International Air Transport Association (IATA), Alexandre de Juniac, recently called on the EU to replace the current EU emissions trading system (EU ETS) for flights within Europe with the UN offsetting scheme, CORSIA. In a letter in response, T&E, Climate Action Network Europe and Carbon Market Watch state that such a move would constitute a substantial cut in Europe’s climate ambition, reducing the emissions reduction obligation on airlines operating in Europe by three quarters. It would also represent a weakening of Europe’s international climate commitment and a distortion of competition within Europe’s single market.
In a plenary vote on 14 February, the European Parliament will adopt its position on reforms to Europe’s emissions trading system (EU ETS) for the 4th trading period (2021-2030). These reforms aim to fix major issues with EU ETS such as the need for tighter reduction caps and the oversupply of allowances which has depressed the carbon price.
Strengthening the ETS as proposed by MEPs will cut almost four times more emissions from flights within Europe than the UN’s new offsetting scheme for aviation CO2, a new independent study has revealed. Europe has faced sustained pressure from industry and other states to remove aviation from its ETS and leave climate action to UN aviation body ICAO. But the study, commissioned by Transport & Environment, also finds that the ICAO global scheme will deliver less for the climate than the original aviation ETS, which only covers flights in, from and to Europe.
This study presents a comparative analysis of the global offsetting scheme for aircraft CO2 and various scopes for the inclusion of aviation in the EU ETS.