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Parliament votes to extend EU ETS to aviation

09 July, 2008

The European Parliament voted overwhelmingly on Tuesday to include aviation emissions from all flights starting and landing in the EU in the region’s emissions trading scheme (ETS) from 2012, although one market participant warned that the legality of the move could be challenged.

Six hundred and forty members of Parliament (MEPs) voted in favour of the proposal reached last week between the Parliament and the European Council (see Industry, green groups slam aviation ETS deal), with only 30 voting against it and 20 abstaining.

Peter Liese, the German MEP who helped broker the deal, admitted it was “perhaps ... not as ambitious as some environmental groups would have wanted, but we would never have had a compromise if we had insisted”.

He said that the inclusion of intercontinental flights in the directive was revolutionary, “because until now we have not yet included products from third countries [in the EU ETS]”.

“We are striving for an international agreement [on aviation emissions] but we will have to wait until the US will have elected a new president, called John McCain or Barack Obama, who takes climate protection seriously,” he added.

EU environment commissioner Stavros Dimas said the agreement would “enable the aviation sector to make a fair contribution to Europe’s climate change targets”. But he admitted he would have preferred 20% of carbon allowances to be auctioned, rather than the 15% agreed in the compromise, and said he hoped more ambitious proposals would be included in Irish MEP Avril Doyle’s report on EU ETS reform – due to come before Parliament in the autumn.

But the biggest challenge now is for the Commission to prove to the international community that it has the legal authority to apply the cap to all flights, regardless of their ‘home country’, said Udeke Huiskamp, a senior manager at Deloitte Financial Advisory Services, at the Environmental Finance EU Emissions Trading conference in Brussels yesterday. She also warned that non-EU airports, such as Switzerland, may see a rise in traffic as airlines look to avoid the ETS fee.

Green MEP Caroline Lucas said she was disappointed by “the gap between the rhetoric of national governments and the political will to act”.

“It is a small step, but also a missed opportunity,” she added, criticising in particular the decision to cap emissions at 97% of annual emissions between 2004-06 in 2012 and at 95% from 2013 onward as it would offer little incentive for emission reductions. The Parliament had originally suggested a cap of 90% of historical emissions.

Richard Dyer, Friends of the Earth Europe’s aviation campaigner, said the final deal was “so weak it will have little impact on the rocketing growth in carbon dioxide pollution from flying”.

On the other side of the fence, Sylviane Lust, director general of the International Air Carrier Association (IACA), said the vote created “the worst of all worlds – even more financial pressure on airlines without any proven benefits for the environment”.

The European Regions Airline Association (ERA) estimated the decision would cost European airlines €7 billion ($11 billion) in the first two years of the scheme and said the figure would increase progressively as the scheme continued, reaching €90 billion over the 10 years to 2022.

“This legislation will impose massive additional costs on a transport industry that already has to bear unprecedented fuel costs,” said Mike Ambrose, ERA’s director general, claiming the directive has been adopted “without a thorough assessment of its economic and social impact”.

The deal must now be adopted by ministers, and EU member states will then have a year to transpose the new rules into national law.

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