AAPA Questions EU Emissions Trading Scheme

The proposed inclusion of international aviation in the EU Emissions Trading Scheme (EU ETS), without the consent of foreign governments, has led to a growing barrage of objections.

International airlines have long been highly critical of various aspects of the scheme, but have so far complied under protest, given the draconian penalties threatened for any non-compliance. At the same time, foreign governments have repeatedly expressed their strong objections to the EU ETS being imposed unilaterally by the EU, in breach of international treaty obligations and bilateral aviation agreements.

A legal test case brought by a number of US carriers against the EU ETS in the UK, as the relevant administering authority, was referred to the European Court of Justice, with a hearing held on 5 July 2011. This case is being closely monitored by all concerned, with initial findings expected in October 2011, although a full judgment will probably not be available until sometime in 2012.

A number of foreign governments have called for their airlines to be exempt from the EU ETS, including, amongst others, the US, China and India. In the US, the bipartisan House Transportation Committee has proposed draft legislation to prohibit US airlines from participating in the EU ETS, citing the failure of the EU to respond satisfactorily to objections raised by the US to the scheme. Several other governments have reportedly made threats to impose retaliatory trade measures, targeting European interests, if the scheme goes ahead in its current form.

Commenting on the escalating political dispute, AAPA Director General, Mr. Andrew Herdman, said, “Foreign governments have long held the view that the inclusion of foreign airlines in the EU ETS, without the consent of foreign governments, breaches international treaty obligations and bilateral agreements governing international aviation. More than 140 non-EU governments stated their  unequivocal opposition to the unilateral imposition of the EU ETS at the two most recent triennial Assembly meetings of the United Nations International Civil Aviation Organisation (ICAO) in 2007 and 2010.”

The EU has said it would consider partial exemptions from the EU ETS if other governments introduce “equivalent measures”, acceptable to the EU, but has given no indications as to how such equivalence would be determined, or what processes might be involved.

Mr. Herdman said, “This would only bring added complexity to the scheme without being environmentally effective. In any case, the whole notion of partial exemptions is practically unworkable, given such exemptions would only exclude inbound flights to the EU from the relevant countries, but would have to be applied equally to all carriers operating on such routes. There is a certain irony in the fact that the EU insists that any such equivalent measures would need to be acceptable to the EU. On the other hand, the EU has always insisted that other governments are not even entitled to express an opinion on the acceptability of the terms of the EU ETS.”

“EU intransigence on this issue has triggered a global political backlash. The EU needs to face up to the fact that it has over-reached its authority, and must now fundamentally rethink its position. Given the need for international consensus, combative legal challenges and threats of a tit-for-tat trade war are not the right way to resolve these matters. The EU needs to urgently re-engage with the international community to find constructive solutions and avoid further escalation of the dispute. Everyone acknowledges that ICAO is the appropriate UN forum for all governments to work together towards an effective multilateral agreement on a global approach to aviation and the environment,” Mr. Herdman added.

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