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Editorial Comment – December 2012

The big news in Europe has been the European Commission’s decision to postpone payments into the Emissions Trading Scheme (ETS) for one year, for flights operating into or out of the EU.
 

Connie Hedegaard, pictured above. Photo: European Commission

 

The big news in Europe has been the European Commission’s decision to postpone payments into the Emissions Trading Scheme (ETS) for one year, for flights operating into or out of the EU. Connie Hedegaard (see picture gallery), commissioner for climate action, announced the news to the collective relief  of the global aviation industry in November.

 

More sceptical observers claim that the Commission had no choice: with Chinese airlines threatening to pull Airbus orders and other countries’ carriers, such as those in the US and India planning not to pay, the pressure was certainly on the EU to amend its thinking.

 

What it has done however, which cannot be denied, is to put emissions firmly and finally at the top of ICAO’s agenda – something which the UN body hasn’t seemed in any hurry to do. And if the whole complicated, costly and controversial scheme triggers a global agreement, that can only be a good thing.

 

Whether ICAO can reach a decision in the EU’s one-year timeframe is a different matter. While the EU has promised to enact its ETS if ICAO fails, it will be interesting to see how the global airline community reacts if nothing is done. The EU has thrown down the gauntlet.

 

However, for intra-European flights, nothing has changed (apart from a postponement of all aviation auctions until 2013), leaving the low-cost and regional sector to pick up the bills. This, some carriers argue, is penalising the region’s airlines and impacting EU competitiveness. The European Regions Airline Association, together with the International Air Carrier Association, has called for the scheme to be postponed across all sectors until ICAO finds an international solution. ‘By implementing a two-tier scheme where intra-EU operators are still obliged to fully implement the law, the European Commission will continue to impose cost and complexity on intra-EU operations with little or no overall environment benefit’, the two organisations said in a statement.

 

But it is extremely unlikely that the EU will back down in its own backyard. Here, at least, it has the power to enforce the scheme, and given that the governments of individual member states receive the money to use as they please, there is unlikely to be any political support to include the EU’s carriers in the moratorium. For them, it is here to stay.

 

The final question is whether ETS itself remains in place for regional carriers after ICAO has come up with its plan. Because if the carriers need to then implement a new scheme, the costs of complying with yet another process will be a hard pill to swallow.


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