EU freezes ETS tax for non-European airlines

The European Union's controversial emissions trading scheme (ETS) has been frozen for Non-EU flights for one year, Connie Hedegaard, European commissioner for climate action, said today

She said the Commission intends to temporarily exempt non-EU flights, in response to progress made in global talks.

Last week, a meeting of the International Civil Aviation Authority (ICAO) established a high-level group on market-based mechanisms and decided to limit the number of options being considered on a global level from three to one. Hedegaard said today that this means a global deal on reducing aviation emissions could be reached next year. The Commission has said such a deal is a precondition for aviation to be exempted from the ETS.

“In order to create a positive atmosphere around these very important [ICAO] negotiations, I have just recommended in a telephone conference with the 27 member states that the European Union stops the clock when it comes to enforcement of the inclusion of aviation in the EU ETS to and from non-European countries, until after the ICAO general assembly next Autumn,” Hedegaard said at a press conference. Foreign airlines will need to continue accounting for their emissions, but will not be subject to any payment during the freeze.

“If this exercise ends in nothing, then needless to say we are back to exactly where we are today with the EU ETS, and we are back there automatically,” she said, adding that this was a “window of opportunity” for third countries to agree to a global deal.

Aviation was included in the EU ETS on 1 January 2012, obliging all carriers to document their CO2 emissions and purchase permits in the event that they exceed their allowances.

Under the ETS legislation, all flights landing or taking of from an airport in the EU must purchase credits for the emissions emitted from the entire flight, even if most of the flight takes place outside EU airspace. Third countries such as the United States, Russia and China have said this amounts to an illegal tax. Operators for flights within the EU will still be required to fulfil their obligations, as previously instructed.

The European parliament still has to approve the proposal.

German Liberal MEP Holger Krahmer, who has been critical of the inclusion of foreign airlines, said the Commission is trying to put a positive spin on what amounts to backing down on a failed policy in the face of international pressure. "This is a friendly formulation for [saying] the project is buried," he said. "The conclusion is, a European island is not the solution for climate protection."