When the European Commission set out its first proposals to bring aviation into the existing European Union's Emissions Trading System (EU ETS) for stationary sectors in September 2005, airlines warned it would be difficult and contentious, and advised against the noble ambitions. Almost a decade later, airlines can safely say: “We told you so.”

In the latest chapter of intense disarray, European powers are internally bickering on how to go forward. Three of the EU's largest member states, France, Great Britain and Germany, have objections to the EC's proposed new legislation to adopt a European regional-airspace-based ETS for aviation. Some members of the European Parliament (EP), conversely, believe the EC's proposal does not go far enough and should be strengthened.

The EP and the Council of the EU, which represents the member states, need to approve the proposed legislation.

France, Germany and Great Britain (known as the Big Three in this context) assert that the geographic scope of the “stop the clock,” which is in place for one year and limits the ETS obligations to flights between airports in the European Economic Area (EAA), should be maintained until 2016. In a joint working paper, the three countries say they have “a number of concerns with the airspace approach which include the political acceptability and practical implementation of an airspace-ETS.” They suggest reviewing the scope following the next International Civil Aviation Organization (ICAO) Assembly in 2016, taking into account the progress of the global market-based mechanism (MBM) for CO2 emissions of international aviation.

Several other EU states, such as Finland, the Netherlands, Spain and Italy are said to be supportive of the Big Three's position.

The Big Three's decision to rebuff the EC's EAA airspace proposal is not driven by pressure from Airbus or their flag carriers, one source claims. The driving reason is concern that the proposed EU ETS modification—which would be the third in three years—would damage Europe's credibility. They also fear that introducing an ETS for European airspace, which legally does not exist, would be counterproductive to efforts of the international community to achieve an efficient and comprehensive global system that would be operational from 2020.

Under the European Commission's legislative proposal, which was published days after the ICAO general assembly in October, emissions from flights to/from countries outside the EEA are subject to the ETS, but solely for emissions attributable to the portion of the flight that is within EEA airspace. The regional European airspace system would last until a global MBM becomes applicable to international aviation emissions by 2020, as planned by ICAO.

Peter Liese, a member of the EP's environmental committee (ENVI) who is steering the proposal through parliament, supports the EC's proposal and says he will not recommend the EP “limit any compromise to a prolongation of the stop the clock.” The inclusion of all flights taking off and landing in Europe for the part that they operate in European airspace “is indispensable. This is a matter of fairness against European airlines and their competitive situation,” Liese notes in an explanatory statement to his proposals to be considered by other members of the EP (MEPs).

The German MEP will propose an amendment to limit the airspace approach until 2016 and to reintroduce the full ETS (which regulated emissions of the entire length of flights to, from or between EEA airports) from 2017. He deems this “reasonable” because there is no guarantee a legally binding pact for global aviation will be adopted in ICAO in 2016. If one is reached, the EU should be ready to modify the legislation accordingly.

Liese intends also to include an amendment lowering the level of free emissions that airlines receive, to 60% from 85% now. He argues this is justified because the airspace approach reduces the emissions covered by the ETS to 40% compared with the original scheme and, he says, this will “limit the damage [of aviation] for the environment.”

Liese further warns he will not start discussions with the council on the European airspace legislative proposal unless all member states implement the “very limited” stop-the-clock legislation. Chinese and Indian carriers are refusing to comply and have not surrendered allowances for their 2012 flights inside Europe. It is the responsibility of the member states to enact the legislation, but member states overseeing the Indian and Chinese airlines are hesitant to take legal action or to repeal the traffic rights of the recalcitrant airlines.

The vote in the ENVI committee is set for Jan. 30 and the final full vote is scheduled for April. The goal is to get the new EU ETS legislation, in whatever form, in the official EU journal before the legislative term of the EP ends and the original full scope ETS for international aviation reactivates.