The European Union signaled it will defend its right to continue a limited carbon market for airlines until 2020 under a deal being discussed at a meeting of the International Civil Aviation Organization.
Negotiators from more than 190 states are at the United Nations agency’s triennial general assembly in Montreal to decide on measures that include a pledge on a market for carriers to cut greenhouse gases. The meeting started yesterday.
An ICAO deal would commit governments globally to begin designing a market-based mechanism for the sector, which emits 2 percent of greenhouse gases. Details would be decided in 2016 and the system would start by 2020. In exchange, the 28-nation EU would be allowed to impose carbon curbs on flights in its own airspace as part of its emissions market. It originally wanted to count emissions from the entire length of routes to and from its airports.
Europe’s agreement to narrow the scope of its carbon program for airlines “has already been a very big compromise,” EU Transport Commissioner Siim Kallas said in an interview after the meeting’s opening session. “The proposed text to the assembly seems to be supported by a large majority, and we are among those who support it. Departing from that is a big question mark.”
Until 2020 “countries or groups of countries should — within certain parameters — be able to deploy national and regional market-based measures,” Kallas told the assembly. Countries led by Brazil, Russia, India and China oppose such programs prior to a global deal, according to an EU document on the negotiations obtained by Bloomberg News.
Climate panel
The aviation talks are parallel to attempts by government negotiators in the UN climate panel to reach a deal by 2015 to cut greenhouse gases globally from 2020. Reducing pollution would help limit global warming that risks causing more heat waves, flooding and intense storms, according to UN scientists.
“Everyone needs to play a part,” UN Secretary-General Ban Ki-moon told the negotiators. “I count on this meeting to explore how the aviation sector can limit carbon emissions and contribute to sustainable development.”
The creation of a carbon market for airlines made it to the top of the ICAO agenda after the EU included airlines in its emissions trading system beginning in 2012. That triggered protests from countries from the U.S. to Russia and China, who argued the EU measure was extraterritorial and that curbs on airline emissions should be discussed in the UN agency.
Retaliatory measures
President Barack Obama signed a bill last year shielding carriers including Delta Air Lines Inc. (DAL) from the EU rules. Russia announced it was considering limits on European flights over Siberia as part of possible retaliatory measures.
Airbus SAS said in June that 27 orders from China for A330 wide-body jetliners remain in limbo after the government there froze the contracts as part of a campaign against the EU measure. The Toulouse, France-based company is “looking forward to a global solution led by ICAO,” said Stefan Schaffrath, its spokesman.
To avoid trade conflicts, the EU deferred curbs on foreign flights by a year. The European Commission, the bloc’s regulatory arm, plans to put forward a proposal to limit the scope of its emissions law for airlines in the first half of October should ICAO back the deal in Montreal, two people with knowledge of the matter said this month.
“We are absolutely confident that by the time this assembly ends, we will reach a global accord on this topic,” Raymond Benjamin, ICAO secretary general, told reporters.
Airline permits
Europe’s cap-and-trade program is the cornerstone of its plan to cut carbon dioxide. The annual limit for the aviation industry began at 97 percent of average discharges from 2004 to 2006, falling to 95 percent in 2013. Airlines were given emission permits making up 85 percent of the industry cap for free. EU emission permits for delivery in 2013 closed at 5.39 euros a metric ton in London yesterday.
“Everybody shares a view that a trade conflict should be avoided,” Kallas said in the interview. “It seems to me there is a possibility that we will have a resolution. But I am very careful, very cautious to declare that today we are there.”
