European Parliament Votes for Reforms to the EU ETS from 2020 that Would Tighten Aviation Emissions Cap
(GreenAir Online) The European Parliament has voted to increase the ambition of the EU Emissions Trading System (EU ETS) for the next phase of the scheme starting in 2021, which includes tightening the emissions cap of the aviation sector. The sector should expect to receive 10% fewer allowances than its 2014-2016 average, say MEPs. Trilogue negotiations on the overall EU ETS reform package will now take place with the EU Council, which represents Member States, and the European Commission before a final decision is taken. Green lobby group Transport & Environment (T&E) welcomed the decision by MEPs as evidence that aircraft emissions will in future be treated on a par with other industries covered by the EU ETS. European airlines made clear their opposition last week to the sector’s continued inclusion in the EU scheme once the ICAO global CORSIA carbon offsetting scheme starts in 2021 (see article
The Parliament voted 379-263 in favour of the draft measures proposed by its environment committee (ENVI), demonstrating significant opposition from many MEPs who either felt the package of reforms was not consistent with EU pledges made under the Paris Agreement or that it went too far in damaging European industry competitiveness. The EU ETS is the flagship of EU climate policy which is aiming for an overall reduction of greenhouse gas emissions of at least 40% by the end of the scheme’s Phase IV in 2030 compared with 1990 levels.
Aviation has been treated far more leniently under the EU ETS than the other sectors and in the face of continued growing emissions, MEPs have argued this is no longer sustainable and so must share the burden of meeting the EU reduction target.
The existing Directive says that it is for Member States to determine the use to be made of revenues generated from the auctioning of allowances, although such revenues should
be used to tackle climate change in the EU and third countries. MEPs have agreed an amendment whereby all revenues shall
be used to tackle climate change, including funding R&D to reduce emissions in aeronautics and air transport. The Parliament tried before to have similar wording inserted into the original Directive but failed due some States’ (notably the UK) refusal to ring-fence revenues.
Shipping has so far escaped being included in the EU ETS but with the sector failing to substantially progress on measures to reduce international CO2 emissions, the Parliament is proposing emissions in EU ports and during voyages to and from them should be accounted for. MEPs wish to see ship owners buy EU ETS allowances from 2023 onwards or pay an equivalent amount into a ‘maritime climate fund’ set up to compensate for maritime emissions, improve energy efficiency, facilitate investment in innovative technologies and reduce CO2 emissions from the sector. This would only apply if IMO does not agree global action by 2023.
“If ICAO and IMO fail to deliver strong global market mechanisms to tackle emissions, the shipping and aviation sectors will be forced to comply with the EU ETS,” commented carbon risk management firm Redshaw Advisors
, which predicts a significant upward revision to the price of EU allowances for the end of Phase III and beyond should the Parliament’s proposals be adopted by the Council. READ MORE