European Union Emissions Trading Scheme (ETS)

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EU Moves Forward on ETS Suspension

April 1, 2013

Listen to BAA’s Flight Plan for more on the status of EU-ETS.

The European Union continues to move forward on its proposal to “stop the clock” for implementing its Emissions Trading Scheme (EU-ETS) on non-EU operators, with a final vote on the moratorium anticipated within the next three weeks.

But for operators whose travels take them from one point to another inside Europe, the clock will not stop. Implementation of EU-ETS will take place as scheduled on April 30.

“If an operator flies point-to-point in Europe, those flights will be covered still,” said International Business Aviation Council (IBAC) Director General Kurt Edwards. “The obligations under the ETS will remain. So it’s partial relief at best.”

The one-year moratorium was suggested in a surprise announcement by EU Climate Commissioner Connie Hedegaard last November. Citing progress made by the International Civil Aviation Organization (ICAO) in work toward a worldwide system of market-based measures (MBMs) aimed at reducing the aviation industry’s carbon output into the atmosphere, Hedegaard promised to re-evaluate the moratorium after the ICAO triennial assembly in October.

But progress toward a global solution, which has proven elusive over the better part of a decade, remains beyond ICAO’s reach. Delegates from the 17 nations appointed to the U.N. organization’s High Level Group on Climate Change (HGCC) for the purpose of coming up with MBM recommendations to the ICAO Council adjourned last week without reaching a consensus.

“Many of the same issues that have hung up ICAO in the past continued to do so,” explained Edwards.

Among them: whether states need to secure the approval of other states to apply MBMs to their operators and how to accommodate aviation operators from developing states alongside those of developed states. Delegates seemed to be interested in the notion of allowing each nation to decide how to implement carbon abatement measures within their own borders – something Edwards said could prove nightmarish to business operators.

“It is not likely that the HGCC will meet again,” said Edwards after conferring with colleagues in Montreal, where the HGCC meetings have been held over the past three months. Instead, the ICAO secretariat will draft a proposed text of a resolution that will be reviewed by the 17 HGCC states, whose delegates will then provide comments. The secretariat will attempt to revise and “harmonize” the resolution. What happens after that, Edwards said, would be at the discretion of the ICAO Council.

IBAC, NBAA Offer Industry Input

Before adjourning, however, HGCC delegates heard from the Air Transport Action Group (ATAG), a global organization designated by ICAO to represent all facets of the aviation industry. Among the recommendations submitted by ATAG were those formulated by IBAC to ensure that business aviation interests were adequately represented in the process.

“We want whatever ICAO decides on to be predictable, simple and fair in proportion to activity levels. It should be flexible with recognition that one size doesn’t fit all. And whatever we wind up with must be cognizant of administrative burden. For instance, the concept of regional measures creates a patchwork that’s very cumbersome to business operators,” said Edwards.

With regard to money raised by an ICAO MBM, Edwards amplified NBAA’s position, shared by all IBAC members, that any funding generated by aviation should be reinvested into the system.

“The HGCC reaction to the ATAG paper was one of great interest,” he pointed out. “But the HGCC states aren’t even at that level of consideration. They’re still on the issue of what a framework for this might look like. That’s a frustrating disconnect for the industry.”