EU in Deal on Airline CO2 Emissions - Sources
Date: 27-Jun-08
Country: BELGIUM
Author: Ilona Wissenbach and Pete Harrison
A European Parliament spokesman confirmed the Reuters report that a deal had been done, and said details would be officially released in the next few days.
Aviation generates 3 percent of all carbon dioxide emissions in the 27-member bloc but has been kept out of the ETS so far because of concerns that its inclusion would damage the industry's ability to compete in international markets.
But with air traffic set to double by 2020, politicians are keen to apply the "polluter pays" principle as Europe struggles to reduce output of greenhouse gases blamed for global warming.
Soaring fuel costs have helped to push several airlines into bankruptcy in recent months, and carriers said the added costs from Thursday's deal would increase their pain.
However, environmentalists also criticised the plan for not forcing airlines to make greater cuts.
Lawmakers and member states had been deeply divided on the issue, and Thursday's talks provided the last chance to reach an accord before the current EU legislature ends in March 2009.
Parliament wanted a start date of 2011 but an EU source said lawmakers settled for 2012 for airlines to join the scheme, which sets a cap on emissions and forces companies to buy permits for some or all the CO2 they emit above that limit.
The date was confirmed by an industry source.
Airlines taking off or landing in the EU will have to buy 15 percent of their permits in ETS auctions, both sources said, adding that if an international accord was reached the EU would be ready to negotiate to integrate the systems.
UNAFFORDABLE
"It's a success that we got an agreement, it's a good compromise, both sides moved," the EU source added.
But the International Air Carrier Association (IACA), which represents 38 holiday airlines, said aviation had come off worse in the political horse-trading.
"Fifteen percent auctioning in 2012 is unaffordable and unacceptable for our airlines, given today's high fuel prices and weakening demand," IACA Director General Sylviane Lust said.
"Policymakers have completely disregarded the future of the aviation industry," Lust added.
The deal will apply to flights within Europe by airlines such as Ryanair and easyJet, as well as to intercontinental flights to and from the EU, including those operated by non-European carriers.
The Association of European Airlines, which represents 33 carriers, expressed disappointment that the deal was based on political negotiations rather than a proper impact assessment.
"The initial assessment by the European Commission was done at a time when oil was only US$40 a barrel, and today it's around US$137," a spokeswoman said.
Environmental group T&E also criticised the political process, but for allowing member states to water down lawmakers' proposals for more ambitious CO2 cuts.
"National governments must take the blame for failing to deliver a law that will actually cut emissions," said T&E campaigner Joao Vieira. "The policy will offset just one year's growth in emissions from the aviation sector."
The cap will be set in the first year at 97 percent of average emissions levels in the baseline years of 2004-2006, reducing to 95 percent from 2013 to 2020. It will be reviewed in the future as part of a planned review of all ETS legislation.
The EU source cautioned the agreement would still have to be approved by the full European Parliament, which had previously called for 25 percent auctioning.
The deal gives member states the option of using money raised through auctioning emissions permits to subsidise greener forms of transport such as bus and rail, both sources added.
(Reporting Ilona Wissenbach; Writing by Pete Harrison; Editing
by Paul Taylor)