Feisty exchanges over Aviation EU ETS as European Parliament votes to continue with ‘Stop the Clock’
MEPs vote on Aviation EU ETS legislation
Thu 3 Apr 2014 – The European Parliament today voted in favour of a compromise agreement brokered between Parliament rapporteurs and EU member states, represented by the European Council. The vote will see a resumption of the ‘Stop the Clock’ (STC) scope in which only intra-European Economic Area (EEA) flights will be covered by the Aviation EU ETS, rather than the proposal by the European Commission to also include emissions from international flights within EEA airspace. Despite the large majority in favour of the compromise – 458 for, 120 against and 24 abstentions – the vote was preceded by feisty exchanges between MEPs in a debate on the issue. STC will now run from 2013 until the end of 2016 and the agreement allows for a return to the original full scope of the scheme from 2017 should an agreement at ICAO to implement a global market-based mechanism from 2020 not be reached at its Assembly in 2016.
Speaking after the vote, the Parliament’s lead rapporteur, Peter Liese, said he was not entirely happy with the outcome of the negotiations with the Council but it had been correct to adopt the compromise. A failure to have reached a compromise could have led to the end of the whole Aviation EU ETS directive as member states would have been unlikely to implement the airspace approach, although this was challenged by his Environment committee (ENVI) Chairman, Matthias Groote, who believed a better deal could have been struck with the member states.
Liese told the Parliament in the debate last night that it had been far from easy to find a compromise between the various Parliamentary committees and the Council on the issue but all sides had moved. “I changed my original proposals to find a compromise although my colleagues and I are not all of the same opinion but we have managed to achieve a great deal.”
He said the agreement with the Council was to limit the scope to intra-European flights for four years from 2013 and from 2017 revert to the full scope covering all international flights arriving and departing from Europe depending on whether ICAO reached a satisfactory outcome on a global MBM.
Liese said an ICAO agreement in 2016 had to lead to reduction in emissions and must be non-discriminatory and apply to all states, “so a second Kyoto won’t do”. He said he and his colleagues were sceptical of ICAO reaching such an agreement unless there was a successful conclusion to the UNFCCC COP meeting in Paris in 2015 that all countries signed up to.
Climate Commissioner Connie Hedegaard told the Parliament that it was regrettable that the Council had not supported the Commission’s airspace proposal. “The Commission fought for and would have preferred a higher level of ambition,” she told MEPs. “It would have been better for Europe’s self-respect and reputation, and even better for the climate. But we are where we are and the compromise provides a basis for continued European regulatory action to reduce GHGs from aviation and provide much-needed legal certainty for all stakeholders before the compliance deadline.
“In return, we expect our international partners to recognise the constructive and flexible attitude the EU has shown and will now focus all attention on making progress on delivering a critical global deal by 2016.”
She said from contacts with third countries there had already been a positive response to the compromise reached.
She added the decision taken at the ICAO Assembly last year was as a result of European pressure and must now lead to the adoption of a global measure from 2020. “The Assembly in 2016 must therefore pin down the details of a fully-fledged global market-based mechanism for international aviation.”
She told the MEPs: “I share some of the frustrations around this file but I hope you will vote for this compromise text without further amendments.”
Conservative MEP Jacqueline Foster said she would support the compromise “under duress” but told Hedegaard the original proposal had been “a stupid and ill-conceived idea and nothing more than a tax on industry that had threatened much-needed jobs. We are global traders, not global dictators.” In a scathing attack on the Commission’s handling of the issue, she told Hedegaard: “You came across as arrogant and incompetent. You’re approach was naive and it was patronising.”
Eija-Riita Korhola, rapporteur on the file for the Industry committee (ITRE) said the Commission had been too ambitious with its proposal and an example of how things could go wrong. “Hopefully, this will not be repeated in future.”
However, a succession of MEPs said they could not support the compromise deal with the Council and would be voting in favour of the airspace proposal, including Matthias Groote, a shadow rapporteur alongside Liese.
Groote said ENVI had rejected the compromise as there were too many negative points but the 50/50 split on its vote showed how divided Parliament was on the issue. He added Europe was “genuflecting” to other powers.
On behalf of the Greens, Satu Hassi said it was a brave attempt to reach an agreement with the Council but she could not support the compromise. “It’s a shame the EU is taking a backward step due to pressure from Russia and China, whipped up by airlines.”
An angry Chris Davies, who had a feisty exchange with fellow UK MEP Foster, said the threats from China and others had left Europe looking weak and support for the compromise would be “absolutely shameful”, adding: “Of course we want a global deal but ICAO has been talking about wanting a global market-based mechanism since 2001. We have as much chance of getting one in 2020 as there are fairies in the bottom of garden. We are going to have to take national and regional action and this [airspace approach] is exactly the kind of initiative we should be taking – it sets a good example to the world and shows European leadership. The Council has completely let us down.”
However, with the Social Democrat group split on the issue and the centre-right EPP group, the largest in the Parliament, behind the compromise trilogue agreement, the vote proved a comfortable victory for Liese, himself a member of the EPP group.
The decision will now go back to the Council for adoption at a meeting of ministers on April 14 before the legislation is published in the Official Journal of the EU by the end of the month. Aircraft operators still included in the scheme will not have to report their 2013 emissions until the end of March 2015 or surrender emissions permits until the end of April 2015.
The scope of the EU ETS will be reduced still further with the exemption of many smaller non-commercial aircraft operators, such as business jets, previously caught up in the scheme and considered too much of a burden to administer (click here for more details). Also now excluded will be flights between EEA airports and EEA outermost regions, EEA overseas territories, European microstates (for example, Monaco and Andorra) and also Switzerland (click here for more details).
However, the 10,000 tonnes of CO2 exemption threshold for commercial operators remains unchanged. To determine whether the operator exceeds the threshold, all intra- and extra-European flights (so-called Annex 1 flights) have to be taken into consideration. Those above the threshold – including both intra- and extra-European flights – will still be required to report emissions and surrender allowances but only for intra-European flights. This means many non-EU airlines, including those from India and China, will still need to report their intra-EEA emissions.
Reaction to the vote from European airlines has been, at best, mixed, while environmental NGOs expressed their disappointment:
Association of European Airlines (AEA):
“Although AEA welcomes that the EP has taken a realistic approach which provides clarity for airlines for the next three years, we would have preferred legal certainty and planning stability until 2020 when the global market-based mechanism is due to come into force,” said Athar Husain Khan, AEA’s CEO. “The new scope puts an additional burden on airlines primarily serving intra-European routes but by amending the aviation ETS, the EP has paved the way for further progress at international level. AEA fully supports the ICAO process as it is the only way to ensure a global solution for a global problem.”
European Regions Airline Association (ERA):
Simon McNamara, Director General of the ERA, said: “By agreeing to this compromise, rather than suspending the entire scheme, Europe is penalising and damaging European operators flying intra-European flights. The scheme’s coverage is also reduced to only around 20% of EU aviation emissions which destroys any environmental credibility. ERA’s members will be hit hard by what is an extremely disappointing ruling.”
Boet Kreiken, ERA President, added: “ERA’s position has always has been that the entire scheme should have been put on hold for all flights pending a satisfactory agreement at ICAO level on a genuinely global scheme. We continue to support the objectives of addressing aviation’s impact on the environment and the role ICAO should play, but implementing a purely intra-European ETS until at least 2016 is not good news.
“This decision will mean that Europe’s citizens taking intra-European flights will have to pay more for their flights. The bottom line of Europe’s airlines will also be hit resulting in less money available to invest in environmentally efficient aircraft and procedures. The end result will damage the very environment and citizens that it is supposed to protect.
“This decision illustrates clearly that Europe does not yet have a true aviation policy. ERA is looking forward to working to develop with the European Commission and other stakeholders an integrated vision for aviation that is coherent, consistent and fair to Europe.”
European Low-Fares Airline Association (ELFAA):
A statement said: “ELFAA registered its disappointment at the outcome of today’s vote in the Parliament to further extend the very reduced scope of EU ETS to 2016. The casualties of this political compromise are the environment (less than 20% of EU aviation emissions being captured by intra-EU scope); intra-European operators; and European consumers who alone bear the cost penalty of this highly discriminatory outcome, with no meaningful environmental gain.
“ELFAA now calls on the Council to re-think their position on the draft trilogue agreement to further extend the discriminatory ‘Stop The Clock’ until 2016, failing which, ELFAA will have no option but to reactivate its currently stayed legal challenge against such discrimination.”
Airlines for America (A4A):
“A4A and our members commend the Parliament’s extension of stop the clock, thereby protecting US travellers and shippers from unwarranted EU ETS tax hikes that drive up the cost of air travel,” said A4A President and CEO Nicholas Calio.
A4A Vice President, Environmental Affairs, Nancy Young said the decision to ratify ‘Stop the Clock’ while noting the US airline industry’s business model aligned with environmental interests and did not need an exorbitant tax scheme to incentivise the industry to go green.
“The US aviation industry has an exceptional environmental track record, and remains committed to doing even more to bring additional emissions savings within the industry and work within ICAO on implementing the global agreement,” said Young. “Extending stop the clock on the extraterritorial application of the EU ETS scheme enables the global aviation community to further build on the progress achieved at ICAO while ensuring commercial aviation remains a green engine of economic growth around the world.”
Transport & Environment (T&E):
Bill Hemmings, T&E Aviation Manager, said: “Just when the IPCC’s latest report shows how climate change is already affecting every aspect of human life, European governments and politicians have chosen to effectively scrap the only law in the world that attempts to curb aviation’s soaring emissions. Regulating emissions in European airspace is not only our right, but also our obligation - something those who cried wolf about a ‘trade war’ seem to have forgotten.
“If no meaningful progress is made in ICAO in 2016, the pressure on decision-makers to stand by their promise to revert back to a full aviation ETS will be overwhelming.”
WWF:
Jason Anderson, Head of European Climate and Energy Policy at WWF European Policy Office said: “A continuation of ‘Stop the Clock’ in order to achieve a global agreement at ICAO is making the environment pay the price as aviation emissions coverage in the EU ETS will now be reduced by 75%. The EU has compromised too much in pursuit of this aim, with no guarantee of success.
“What we need to see now is the BRICS, US and other countries to take a more constructive role within ICAO to ensure the adoption of a market based measure for aviation, ideally one that generates revenue to help developing countries take climate action. We also need to see the airline industry continuing to stand firm in their support of global and regional measures to reduce aviation emissions. Only then will the EU’s sacrifice not have been in vain.”
Update Mon 14 Apr 2014:
The compromise amendment to the EU directive was formally adopted by the Council today. It will now be published in the Official Journal of the EU before the end of this month and will enter into force on May 1.
