Monday, November 12, 2012

EU Agrees to Delay ETS Impacts for One Year

In major news today, EU Climate Commissioner Connie Hedegaard announced that the European Commission was willing to suspend the application of its ETS to flights to and from non-EU States for an additional year to allow ICAO time to work toward a global aviation emissions program. Flights between EU States will still be subject to the scheme, placing EU carriers at a competitive disadvantage. The EU Member States still need to approve the proposal. The announcement follows last week's ICAO council meeting, where three potential emissions mitigation measures were reportedly discussed. The EU may have heard enough at the meeting to generate optimism that ICAO would produce a solution in 2013. Regardless of what was said at the meeting, some kind of enforcement delay was probably necessary as ICAO is not expected to have its plan ready by April when the charges under the EU plan come due. With carriers from China and India refusing to comply the prospect of a standoff over fines, possibly escalating to flight bans, loomed over the industry. This announcement better aligns the EU and ICAO timeframes, keeping alive the possibility that the EU will permanently exempt foreign carriers if a sufficient international regime is agreed upon. It is hoped that with the delay the EU regulation will no longer distract from talks regarding a global solution. The pressure is now squarely on ICAO to foster an agreement by the end of next year.

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