CARBON FORWARD: Weak ICAO deal may see EU tighten grip on aviation emissions

Published 15:42 on August 25, 2016  /  Last updated at 15:47 on August 25, 2016  /  Aviation/CORSIA, EMEA, EU ETS, International  /  No Comments

In October, 191 governments will vote on an historic deal to limit emissions from international flights, which, if not deemed sufficient to continue international aviation’s exclusion from the EU ETS, may be reinstated under the policy.

In October, 191 governments will vote on an historic deal to limit emissions from international flights, which, if not deemed sufficient to continue international aviation’s exclusion from the EU ETS, may be reinstated under the policy.

The aviation sector accounts for around 10% of EU ETS emissions but its future in the programme beyond next year is highly uncertain, with potential consequences for the hundreds of airlines and thousands of power plants and industrial installations with annual ETS obligations.

Just days after the vote at UN aviation body ICAO’s triennial meeting in Montreal, the European Commission will give their feedback on the deal at the Carbon Forward 2016 conference in London.

ICAO will vote Oct. 7 on a global market-based mechanism to offset international flight emissions. Draft proposals appear weak with up to 50% of emissions being exempt in the first five years and discussions to further weaken the proposal earlier this month could mean mandatory participation would only apply from 2027.

This is unlikely to satisfy EU lawmakers from across the political spectrum, putting them at odds with the airline industry and governments outside the EU by planning a range of measures that would regulate EU airline emissions more tightly than efforts under ICAO.

“The aviation sector should contribute to the EU’s 2030 emission reduction target at the same level as other sectors under the EU ETS,” said Czech MEP Katerina Konecna.

Some airlines have already made their feelings clear:

“Our expectation is that the global carbon offsetting scheme will replace the aviation ETS,” said a spokesman for A4E, an association of large European carriers.

“The implementation of the global scheme should make existing and new economic measures for international aviation emissions on a regional or national basis unnecessary.”

Only intra-EU flights are regulated under the ETS but, with the current law due to expire at the end of 2016, the European Commission is to draft a new proposal by December that could drastically expand its reach and reinstate the bloc’s original intention to regulate all flights to and from EU airports.

“The chance of the re-inclusion of international aviation in the EU ETS may cause aircraft operators to scramble to cover short positions which in turn will be reflected in carbon prices,” said Louis Redshaw, of specialist emissions trading firm Redshaw Advisors.

The Commission will send a representative to the Carbon Forward 2016 conference in London and is joined by Andreas Hardeman, Assistant Director, Environmental Policy, IATA, and other aviation carbon industry experts including analysts from Thomson Reuters Point Carbon, to discuss ICAO’s proposal on Oct. 14, the second day of this inaugural two-day conference about managing risks and opportunities in the EU ETS and global carbon markets.

KEY FACTS

  • The Carbon Forward conference and pre-conference EU ETS training day will equip you with everything you need to know about managing risks and opportunities in the EU ETS & global carbon markets, whether you’re a company with ETS exposure, a legislator, a trader, an analyst, or anyone with an interest in emissions trading.
  • Redshaw Advisors has partnered with Carbon Pulse to organise the pre-conference EU ETS training session on Oct. 12.
  • MEP Ian Duncan, the lead lawmaker on post-2020 EU ETS reforms, will deliver a keynote address and hold a townhall-style forum on the opening day on Oct. 13

The event will take place at Greenwich’s Old Royal Naval College in south-east London.

For more information on Carbon Forward 2016 or to book your place, click here

To inquire about sponsorship or speaking opportunities, email us at info@carbon-forward.com