ENVI MEPs back continuation of EU ETS ‘stop the clock’ until 2020 pending ICAO CORSIA outcome
Thu 13 July 2017 – Members of the European Parliament’s environment committee (ENVI) have unanimously backed a proposal for continuing with the exclusion of CO2 emissions from intercontinental flights from the EU Emissions Trading System (EU ETS), but only until 2020. The ‘stop the clock’ derogation, which limits the scope of the trading scheme to intra-EEA (European Economic Area) flights, automatically ended in December 2016 and requires new legislation to extend it. The issue will come before a full plenary in September, followed by trilogue talks with the Council. The derogation was agreed to allow negotiations to continue at ICAO on the global CORSIA carbon offsetting scheme to start in 2021 but ENVI MEPs want to see the final details before agreeing to yet a further extension. They also proposed the rules be tightened on aviation’s participation in the EU ETS from 2021 to bring it into line with other industrial sectors.
The Committee voted 57 in favour and three against with six abstentions to back the continuation of ‘stop the clock’, along with proposals for the post-2020 phase of the EU ETS. The transport and industry Parliament committees (TRAN and ITRE) also support the Commission’s proposal to extend the derogation but have not made the time limit stipulation.
“It is sensible that we extend the exemption for international flights to and from the EU until there is greater clarity on the ICAO scheme,” said the ENVI rapporteur on the file, UK MEP Julie Girling. “However, unlike the European Commission, I believe this exemption must be time limited so that we can be sure that CORSIA will deliver its objectives.”
In her submission to ENVI, Girling called for the derogation to expire in advance of CORSIA becoming operational in January 2021, and on the Commission to publish an implementation report by the beginning of 2019 that would assess key elements of CORSIA, to be followed in June 2019 with proposals for future EU ETS legislation. That report, she said, should examine CORSIA’s overall ambition in relation to the EU’s climate commitments under the Paris Agreement.
“In particular, to assess its effectiveness, the report should also inspect the level of third country participation, penalties for non-compliance, processes for public input, standards for monitoring, reporting and verification (MRV), rules on the use of biofuels, and should evaluate offsetting provisions against objective criteria,” she recommended. “Through addressing these points, the implementation report will enable the Commission and the co-legislators to ensure the environmental standards of the EU ETS are maintained.”
Other proposals supported by ENVI in respect of revisions to Phase 4 (2021-2030) of the EU ETS call for the aviation sector to receive 10% fewer allowances than its 2014-2016 average, to increase the number of auctioned allowances from 15% to 50%, and for revenues generated by these allowances to be earmarked as climate finance. Girling believes auction revenues should also be used to help finance R&D and commercialisation of new climate technologies.
There are also plans to reduce the cap on aviation emissions by 2.2% annually in line with other sectors from 2021 through the linear reduction factor, a move supported by EU Member States at a meeting of the Council last month (see article).
“In the steel sector many people fear for their jobs. The reduction targets for this sector are significantly higher than those for aviation,” said German MEP, former rapporteur on the file and now environmental policy spokesperson for the centre-right EPP group in the Parliament, Peter Liese. “Aligning the reduction targets … is more than fair.
“The ENVI resolution at least brings the level of ambition for intra-European aviation more in line with the level of ambition of the remaining industry sectors. This is especially important due to the competition between the aviation sector and railways. The railway sector is paying immense amounts under the ETS since it fuels on electricity. They have 100% auctioning. With 50%, the aviation sector still has a significant advantage, but the distortion of competition is at least reduced.”
Liese backed the ENVI vote to continue limiting the scope of the EU ETS to intra-EEA flights until the end of 2020 to allow ICAO to develop a worldwide system. “We want to find a solution that can be applied worldwide and ICAO has taken important steps regarding this matter during the last year,” he said. “However, until now there are too many unresolved issues to fully exempt the aviation sector from the EU ETS.”
Seb Dance, spokesperson for the S&D group on aviation emissions, added: “The carbon reduction scheme put forward by ICAO in principle deserves our full support, especially following US President Trump’s outrageous and short-sighted announcement to withdraw from the Paris Agreement. Yet we can’t give a carte blanche to ICAO before the real work has even started. The Socialists and Democrats call for full transparency of information and public deliberations on the scheme to allow all actors involved to judge its effectiveness.”
He said the committee had sent a strong signal to ICAO that if the scheme “did not yield good results, we are willing to put flights leaving the EU again under the EU’s emissions trading scheme by the end of 2020.”
The ENVI vote drew an angry response from industry association Airlines International Representation in Europe (AIRE), formerly the International Air Carrier Association, which accused the MEPs of isolating and penalising European airlines. While EU States and the Commission had warmly welcomed the CORSIA agreement, it said, “the ENVI committee seems to have gone in a different direction.”
AIRE said CORSIA represented an historical opportunity to address aviation CO2 emissions at a global level and required Europe to implement it as a replacement to the EU ETS. It hoped the Parliament would “correct the approach” of ENVI at its September plenary.
“The ENVI vote is a very unfortunate and risky backwards step,” added AIRE Director General, Sylviane Lust. “Instead of promoting a global resolution to a global problem, it has chosen to tighten and prolong a regional scheme, creating a precedent for a patchwork of systems and potentially discriminating against European airlines.”
Against this, the ENVI decision was welcomed by Brussels-based Transport & Environment. “With a continuing lack of detail on how the UN aviation scheme will operate, and serious doubts about the effectiveness of offsetting, MEPs’ scepticism is well justified,” said T&E Aviation Manager, Andrew Murphy. “Their vote means that, whether by global or regional action, aviation must make a fair contribution to global climate efforts.”
If the share of auctioning was increased from 15% to 100% in Phase 4 an average €1 billion ($1.1bn) could be raised each year from the sector over the 2021-2030 period, estimates T&E. The campaign group has come up with an online tool that calculates how much additional revenue EU Member States could earn from a reformed Aviation EU ETS, and compares it to revenues if they ended fuel tax exemption.
“The EU ETS can function as an effective carbon pricing mechanism, raising much-needed revenue from a sector that is well able to pay. MEPs and Member States should grasp this opportunity,” said T&E.
Meanwhile, developing nation Jamaica has become the 71st country to signal its intention of joining CORSIA from the outset.
Yesterday, ICAO Council President Dr Olumuyiwa Benard Aliu told the 6th World Civil Aviation Chief Executives Forum in Singapore: “Our planet and its environment must be a clear priority for every leader, no matter their company, country or mandate, and the simplest way to ensure we are on the right side of this issue is to be taking concrete actions today.”
