The European Commission has agreed to suspend the inclusion of international airlines into the EU Emissions Trading Scheme (ETS).
The regional bloc had been under severe international pressure over the issue, with several countries refusing to cooperate. The governments of China, India and Saudi Arabia were all believed to have advised their airlines to withhold carbon data from European authorities, meaning the EU would be unable to calculate their ETS charges. The US was also in the process of passing similar legislation, which could have banned US airlines from participating.
Technical details of the ETS suspension have not been revealed, but it is believed that the EU will now try to work out an international solution under the International Civil Aviation Organization (ICAO).
The International Air Transport Association (IATA) welcomed the EU’s decision.
“Commissioner Connie Hedegaard’s announcement that she has ‘stopped the clock’ on the imposition of the EU ETS on flights to and from non-EU countries represents a significant step in the right direction and creates an opportunity for the international community. The Commission’s pragmatic decision clearly recognises the progress that has been made towards a global solution for managing aviation’s carbon emissions by the International Civil Aviation Organization (ICAO),” said Tony Tyler, IATA’s director general & CEO.
The Association of Asia Pacific Airlines’ (AAPA) however, was more cautious in its response. AAPA Director General, Andrew Herdman, said the needs of different countries “need to be reconciled”.
“Temporarily suspending the scheme is obviously a positive gesture by the EU, but may not go far enough. The implied threat of an automatic snapback in a year’s time means that the EU will still be seen by some as negotiating with a gun on the table,” Herdman said.
The proposal to pause the ETS still needs to go through the co-decision process with EU states and parliament, but Ms Hedegaard confirmed the EU’s wish to “create the space” for the ICAO process to succeed.
“The flexibility shown by the European Commission demonstrates that the ICAO process is working, and we look forward to seeing all parties working together to present positive proposals to the ICAO Assembly in September 2013,” said Tyler.
Last week, the European Commission’s Director of Air Transport, Matthew Baldwin, told an airline conference in Kuala Lumpur that the EU has “always wanted an ICAO solution, and that’s where we’re headed”.
The latest decision will create optimism that the world has stepped back from the brink of a damaging trade war. Russia had already threatened retaliatory measures if the EU pressed ahead with the ETS, while China had suspended orders of wide-body Airbus aircraft.
Non-EU countries were angry that the ETS threatened to charge airlines for their carbon emissions even outside EU airspace.