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Position Paper

May 2016

Questions for consultation

 

Following the Paris Agreement and considering the agreed long-term goal, what kind of effort should come from international aviation and how should this develop over time?

 

IACA has always been in favour of a single Global Market-Based Measure as (GMBM) as it is the optimal market mechanisms aimed at improving the environmental performance of aviation without creating distortion of competition, additional taxes or unjustified burdens on airlines.

 

Such GMBM should be developed and agreed internationally at the level of ICAO. This would be consistent with the international nature of the aviation sector and with the need to find a global response to a global issue.

 

Indeed, regional schemes capture fewer emissions than the expected global solution. A patchwork of parallel, competing and conflicting regional/national schemes would inevitably result in competitive distortions and unnecessary administrative complexity for operators.

 

Taken into account the above, IACA expects that the adoption and implementation of the ICAO global solution (GMBM) will replace the current EU Emissions Trading System (EU ETS). Today the EU legislation currently applies only to flights within the European Economic Area (EU members, Iceland, Liechtenstein and Norway). We trust that the EU ETS legislation can be amended to provide for an appropriate transition mechanism to ensure that operators currently subject to the EU ETS are not subject to a double scheme with separate, overlapping measures and duplicated administrative obligations.

 

Which elements should emerge from the 2016 ICAO Assembly to provide for the implementation of a robust GMBM by 2020?

 

IACA hopes that the 2016 ICAO Assembly decides on a GMBM design that is not only robust, but is also satisfies the following criteria

–        be mandatory and based on non-discrimination (i.e. avoids market distortion), equal and fair opportunities. Competing flights, on a route-by-route basis, must be treated in the same way.

–        easy to implement; avoid a high administrative burden on airlines

–        no duplication of measures on CO2: a ton of aviation C02 which is subject to the ICAO GMBM should not be subject to any other (climate-change related) measure.

–        provide for an equitable balance between a ‘collective’ element (reflecting the individual carrier’s share of total industry emissions) and an ‘individual’ element (reflecting the individual carrier’s growth above baseline emissions);

–        be seen together with important actions in technology, operations and infrastructure efficiency improvements;

ICAO should also issue guidance with respect to the Monitoring, Reporting and Verification (MRV) requirements, as well as to the eligibility of emission units.

 

In what ways could action being taken by countries and groups of countries to achieve their respective climate goals, notably by addressing emissions from domestic aviation, complement and interact with a GMBM addressing emissions from international aviation?

 

IACA considers that if any measures to address emissions from domestic aviation (which is not included in the ICAO GMBM) are adopted by individual (groups of) countries, the design of such measures should be inspired as much as possible by the design of the ICAO GMBM. Airlines should indeed not be subject to systems which are in complexity much different for their international and domestic CO2 emissions. IACA reiterates that any ton of CO2, of international or domestic flights, has an identical impact on global climate change. Therefore, the design of related climate change mitigation measures for domestic flights should not be fundamentally different.

 

Which should be the main principles and criteria guiding a review of the EU ETS following the 2016 ICAO Assembly?

 

The review of the EU ETS following the 2016 ICAO Assembly should follow the principles of the adopted ICAO Resolution.

 

IACA considers that non-discrimination, equal and fair opportunities are principles that are not only valid in a beyond 2020 timeframe, but should also be activated before that year.

 

IACA further advocates administrative simplification as well as clear, predictable and consistent long-term legislative planning as to provide air operators with the necessary legal certainty for their business plans.

 

Which options should be considered for the EU ETS for the period 2017-2020?

 

IACA considers that, in line with the ICAO principles of non-discrimination, equal and fair opportunities, no block of countries should be subject to climate change mitigation measures, unless the entire world is subject to such measures. As CO2 emissions have a world-wide impact on climate change, any stand-alone regional scheme on such emissions would entirely miss the point.

 

As a consequence, IACA sees no other option but to suspend the entire aviation EU ETS Directive until 2021 after ICAO reaches an agreement on a GMBM which would cover CO2 emissions from 2021.

 

Which options should be considered beyond 2020?

 

An ICAO agreement would establish a GMBM which would cover CO2 emissions from 2021. As MBMs should not be duplicative, international aviation CO2 emissions should only be subject to one single measure.

As a result, no other options for international aviation CO2 emissions should be considered.

Nevertheless, IACA would like to reiterate that a GMBM is only one element out of a basket of ICAO measures, besides the implementation of the recently adopted CO2 efficiency standard for new aircraft, the development of guidance documents on operational measures and initiatives to promote the development and testing of alternative sustainable fuels from non-fossil sources.  

 

According to Regulation 421/2014, the Commission proposal following the 2016 ICAO Assembly should “swiftly propose measures in order to ensure that the international developments can be taken into account”, and “give particular consideration to the environmental effectiveness of the EU ETS (…), including better alignment of the rules applicable to aviation and stationary installations respectively”. Which elements of EU ETS could be considered in order to take into account international developments as well as to improve its environmental effectiveness (e.g. review of auctioning shares, use of international offsets – including from the new mechanism established by the Paris Agreement, etc.)?

 

The aviation sector has a strong international character. This implies that even a small cost-differential in climate mitigation measures results in market distortions, for example between operators providing services through exempted routes vs operators providing services through routes which are subject to the EU ETS obligations.

 

As CO2 emissions have no local but have instead a worldwide impact, airlines that are flying routes within Europe should not be subject to other rules than those imposed on airlines that are operating other routes.

 

Airlines are not in competition with stationary installations under the EU ETS. Also, these stationary installations are not subject either to many other rules that are imposed on aviation. Therefore, IACA does not agree with the principle of a “better alignment of the rules applicable to aviation and stationary installations”.

 

Should small non-commercial aircraft operators (emitting less than 1000 tonnes of CO2 per year) continue to be exempted from the EU legislation from 2021 onwards? If so, what alternative measures, if any, should be considered?

 

No opinion.

 

Submit any other comments you may have.

 

IACA regrets the poor level of consultation and information flow from the European Commission (and EU Member States) on the European views and negotiating position on both the design elements of the Global Market Based Mechanism and, most importantly, on the detailed conditions to be met for the EU to consider the GMBM as a satisfactory scheme to tackle international CO2 emissions.