IT HAS BEEN described as generating so much gas – both literally and figuratively. And now, to add to its multiple New Year woes, the European Union Emissions Trading System (EU ETS, sometimes known as the emissions trading scheme) appears to be backfiring under a darkening cloud of global criticism and politically charged hot air. As the first carbon trading scheme of its kind, the ETS consistently has been challenged since its inception in 2005 and has struggled to earn credibility and compliance among its nominated participating industries. Entering 2013, and arguably its most decisive phase, the scheme is, at best, regarded as a worthy but as yet inconsistently applied climate control mechanism; at worst, it is derided as a damaging and costly bureaucratic omnishambles – an eco-crazy directive imposed with scant regard to its feasibility in practice or as little more than a conscience-driven device to feed Brussels’ tax-hungry coffers. Whatever your view, ETS has gained a powerful army of fresh detractors on the eve of its fuller and wider-spread implementation. Its unilateral insistence on including not just member-state airlines but all the world’s carriers into the scheme has sparked an explosive war of words and a travel industry backlash, boiling with indignation and bristling at the EU’s extra-territorial impudence. Airlines, including regional
carriers now locked into the scheme, have always opposed the validity of their inclusion in the cap-and- trade system alongside other energy intensive industries. In line with the United Nations’
Kyoto Protocol to cut greenhouse gases globally, they claim their own emission control formulation and governance through the UN- associated International Civil Aviation Organisation (ICAO). The EU counters that ICAO has been dragging its heels on producing a globally acceptable system. It claims this is needed urgently because international aviation emissions, even if fuel efficiency improves by 2 per cent annually, are projected to be
70 per cent higher by 2020 than they were in 2005. It also claims that international flights into and out of the EU account for the large majority of direct aviation emissions currently responsible for 3 per cent of the region’s total greenhouse gas output. Airlines claim to be ahead of regulators with their own commitment to carbon-neutral growth from 2020, leading to a 50 per cent reduction in emissions by 2050; and, having legally challenged (and lost) their enforced inclusion in ETS, an influential alliance of non-EU carriers has since been playing political brinkmanship over mandatory emissions reporting scheduled for April this year.
Airlines brand ETS as ambiguous and tax discriminatory, a dictatorial edict riddled with hidden costs
In general, airlines brand ETS as
ambiguous and tax discriminatory, a dictatorial edict riddled with hidden costs, administrative complications and devoid of joined-up thinking for sustainable application, both regionally and beyond EU borders. Moreover, they claim an emissions levy imposed on entire flights, rather than just over European airspace, is an infringement of non-EU state sovereignty. A European Court of Justice ruling has dismissed these claims. Despite this, and through the threat of trade sanctions endorsed by major governments, including China and the US, they have earned a temporary standoff. In November, the EU reluctantly offered ICAO more time to produce a global solution for the sector. The net result is an official stalemate on the issue. Coupled with the now extended game of push and shove between the EU and airlines, it remains unclear as to what will ultimately transpire. In the meantime, the EU ETS appears no longer to be cooking on gas – but the hot air continues.
HOW IT’S MEANT TO WORK Aviation’s inclusion in the EU ETS from January 2012 was proposed by the European Commission (EC) in 2006 and endorsed by the European Parliament two years later. The overall target of the scheme is to cut pre-1990 emission levels by 8 per cent or more by 2020. Under the cap-and- trade system, regional airlines join main energy-intensive industries in receiving tradeable European Union Allowances (EUAs) covering a pre-set level of CO2 emissions per year. The reputed aim of the scheme is to enable EU-identified heavier polluting industries to manage their emissions cost-effectively. These include power stations, refineries, iron and steel, cement and lime, paper, food and drinks, glass, ceramics, engineering and vehicle manufacturing. The UK is a key player in a system that requires each member state to submit a National Allocation Plan (NAP), approved by the EC, which sets an overall cap on total emissions permitted and shared between participants regionally, with one allowance equalling one tonne of CO2. After each year, operators must surrender a number of allowances equal to their actual emissions for the year or face a penalty. If actual emissions are lower than their allowances, they can either sell the surplus to other ETS participants or bank them to cover future use. If operators anticipate exceeding their allowances, they can either take measures to reduce their emissions or buy additional EUAs on the market. They can also buy certified emission reductions (CERs), a type of carbon credit, from clean energy projects
AVIATION’S FOOTPRINT INTRA-EUROPEAN FLIGHTS account for less than 1 per cent of worldwide CO2 emissions and up to 3 per cent of the EU’s total emissions, according to the Intergovernmental Panel on Climate Change. It estimates aviation produces about 2 per cent of overall global CO2 emissions. Carbon dioxide represents about 70 per cent and water vapour about 30 per cent of aviation emissions. Nitrogen oxide and suphur oxide each represent less than 1 per cent.