Time running out for ICAO States to agree on participation in global carbon scheme for international aviation

Time running out for ICAO States to agree on participation in global carbon scheme for international aviation | ICAO GMBM

Mon 22 Aug 2016 – A two-day meeting of ICAO Member States gets underway today in Montreal that will attempt to bridge key differences on a global market-based measure (GMBM) scheme to cap international aviation emissions from 2020 before ICAO’s triennial Assembly starts later next month. The closed-door meeting will seek to agree compromise text on a draft Assembly resolution on which States should participate in the scheme from the beginning and how offsetting requirements should be distributed. There are fears that a proposed initial five-year implementation phase could be switched from a mandatory to a voluntary opt-in basis that could lead to a sharp fall in coverage of international aviation emissions. Meanwhile, analysis carried out by a carbon policy website suggests air transport could consume a quarter of the global 1.5C carbon budget by 2050.


The ICAO meeting of the Friends of the President Informal Group, will also be attended by representatives from industry and NGOs. It will hear feedback from bilateral and multilateral negotiations between States that have taken place since the ICAO High-level Meeting (HLM) in May on what progress has been made on resolving paragraphs 7 to 9 of the latest version of the draft resolution.


Under paragraph 7 of the current proposal, the first phase of the scheme – named CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) – would run from 2021 to 2025 and include States that either have an individual share of international activities, measured in Revenue Tonne Kilometres (RTKs), in the year 2018 above 1% of the global total, or whose cumulative share in the list of States from the highest to the lowest amount of RTKs reaches 80% of the total. A second implementation phase would apply from 2026 and bring in States with thresholds of 0.5% on an individual basis or 95% on an aggregate basis. An additional criterion based on gross national income per capita has been discarded since the HLM.


Unless they met the criteria, States classified as Least Developed Countries (LDCs), Small Island Developing States (SIDS) or Landlocked Developing Countries (LLDCs) would be exempted from the scheme altogether. This would mean, for example, all flights to the Caribbean islands would be excluded from offsetting requirements.


The draft Resolution as it stands says all States not included or exempted are “strongly encouraged” to voluntarily participate.


Under the RTK criteria, most developed countries would be expected to be included in the scheme, and those European countries such as Italy and Belgium that fall below the 1% threshold would be expected to voluntarily take part. Developing countries such as China, India, UAE, Thailand and Malaysia do, however, also meet the first phase criteria and this is where the conflict lies. China, India and some other major developing nations have been vocal in their opposition to the inclusion of their airlines in the scheme from the start, arguing that developed countries are required to take the lead under international climate agreements.


In a recent meeting with ICAO President Dr Olumuyiwa Benard Aliu in Delhi, India’s environment minister committed India to working to resolve a GMBM outcome “which adequately addresses the interests of all States”, but he stressed that as a developing nation, “the GMBM should not hinder the aspirations of the Indian people to continue maximising the significant economic benefits of global air transport connectivity.”


Although not a developing nation, the Russian Federation has expressed no enthusiasm for joining the scheme, objecting to the principle of carbon offsetting.


To break the impasse, it is now being suggested that participation in the first phase be on a purely opt-in voluntary basis by States. Some developing States, such as Singapore and Mexico, have already said they are prepared to commit to being included. In a submission to the Friends of the President (FOP) meeting, Indonesia has said it will also join the first phase “as a show of good will and cooperation”, even though it would be exempted under the RTK criteria.


Both industry and NGOs will be concerned by moves towards an opt-in approach. IATA has consistently pushed for a single mandatory carbon offsetting scheme that applied globally. In a working paper to be presented at the forthcoming Assembly, IATA warns that a voluntary rather than a mandatory scheme would run a significant risk that other unilateral economic measures could be implemented by States or groups of States, a clear reference to the EU Emissions Trading Scheme. Guided by the Assembly outcome, the EU will make a decision in early 2017 on the future inclusion of aviation in the EU ETS.


Even under the current phased implementation proposals contained in the draft resolution, NGOs are concerned that the level of exemptions under the approach risk excluding up to 50% of international aviation emissions in the first phase, “which means the MBM will fail abysmally to achieve the carbon-neutral growth from 2020 (CNG2020) goal,” says NGO umbrella group International Coalition for Sustainable Aviation (ICSA) in a submission to the FOP meeting.


It goes on to express “strong reservations” about the opt-in approach and urges ICAO and Member States to find a suitable formula for paragraph 7 that ensures at least a 90% coverage of international aviation emissions. ICSA also calls for all exempted emissions to be offset by the remaining participants in the GMBM scheme, which would require amending paragraph 12 of the draft resolution that states there should be no reassignment. However, this would be strongly opposed by industry, which considers it unfair to place an extra financial burden on airlines taking part in the scheme as a result of exemption decisions taken by States.


Analysis by the International Council on Clean Transportation (ICCT) shows that even under the current mandatory proposal of 80% RTK coverage in Phase 1 and 95% in Phase 2, only 76% of growth, or about 17% of total international activity, would be covered, leaving around 8.6 trillion RTKs not subject to carbon offsetting in the period between 2020 and 2030. There are two reasons for this, say ICCT’s Naya Olmer and Dan Rutherford in a blog, both related to the ICAO definition of a country’s individual share of international aviation activities.


ICAO defines activity as the RTKs flown by air carriers registered to a given country via an air operator’s certificate (AOC). If a foreign registered carrier provides most of the international flights to and from a particular country, then a decent-sized market, for example Brazil or South Africa, can look small and therefore exempt. According to the ICAO definition, Uruguay has no international aviation activity at all as there is no local carrier with an AOC undertaking international flights. To ensure a level playing field, under the current proposal the GMBM would exclude flights from all carriers flying to and from an exempted country regardless of where they are registered. IATA has pointed out that using AOC as the basis for calculation also omits non-commercial aircraft operators, for whom no AOC requirement exists, from the scheme, and wants all international aviation activities to and from individual countries to be included in the phased implementation RTK criteria.


The second, and larger, effect occurs if the calculation of which countries would be exempted from the scheme and which flights would then be excluded are not properly aligned, says ICCT. The current approach to determine whether a country is exempt is based upon its percentage share of global RTKs by departures only. However, the GMBM resolution proposal exempts all flights to and from an exempt country, approximately doubling the coverage gap, argues ICCT.


“These two ways of defining aviation activity, combined, explain why what looks like 80% coverage on paper in fact leaves a 44% coverage gap through 2026,” say the two authors. “Unfortunately, the numbers look even worse for an opt-in system focused on richer countries.”


Basing exemptions on the total traffic in and out of a country could improve coverage of the current mandatory approach to 88% of total emissions in the first phase of the scheme (2021-2025) and 95% in 2026-2035, says Parth Vaishnav, a researcher at Carnegie Mellon University, in an article published in Aviation Week.


Vaishnav suggests airlines could choose to allocate new, fuel-efficient aircraft to routes that fall under the GMBM and use older aircraft on exempted routes.


“Even in poor countries, it is the well-off who fly internationally and are likely to benefit from exemptions,” he argues. “Recognising this, and in light of the distortions they can introduce, perhaps the ICAO Council should do away with exemptions altogether. As the first mechanism that will address CO2 emissions from an entire sector of the global economy, ICAO’s MBM may serve as a template for other sectors, for example ocean shipping. It is important to get it right.”


Meanwhile, analysis by Carbon Brief of ICAO’s latest Environmental Report, shows that even if the aviation sector meets all its climate targets, it will still have consumed 12% of the global carbon budget for 2050 in order to maintain the aspirational 1.5 degree C Paris goal. This is based on meeting forecasted technical improvements and a 100% shift from fossil fuels to the use of sustainable biofuels.


According to Carbon Brief, a UK-based website covering developments in climate science and policy, the remaining global carbon budget for 1.5C is 205 billion tonnes of CO2 and the 12% share represents 24 billion tonnes. Under a business-as-usual projection where the aviation industry grows by 5% per year, as predicted by the sector, but there are no major changes to technology or infrastructure, total emissions over the 2015-2050 period reach around 56 billion tonnes of CO2, a 27% share of the global 1.5C budget. The share of the remaining budget for 2C is smaller, at 7%, “but still significant,” it says.


If there are “dramatic” improvements in aircraft technology, air traffic management and infrastructure, total emissions from aviation by 2050 could drop to around 41 billion tonnes, a 20% share of the global 1.5C budget.


“This means there would still be a shortfall of 1,039 million tonnes of CO2 in 2050 between what is technologically feasible and what is required for aviation to hit its goal of pinning emissions at 2020 levels,” says Carbon Brief. “Only the most optimistic end of the range of potential emissions reductions due to biofuels takes aviation into the realm of carbon neutral growth after 2020.” A 100% biofuel replacement would have significant implications for policy and other areas hoping to switch to biofuels, and would be highly expensive, it adds.





Update 23 August:

Following a recalculation, the ICCT figures quoted above regarding coverage under the RTK criteria have been amended.



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