(Corrects 13th paragraph to clarify meaning of carbon neutral.
The author is a Reuters market analyst. The views expressed are
By Gerard Wynn
LONDON Nov 12 The European Commission's retreat
from forcing airlines to pay for carbon emissions when flying in
or out of the bloc puts huge faith in action by the U.N.'s
International Civil Aviation Organisation.
The decision also brings risks of litigation by European
It made sense to look for a compromise after China and India
said they would not comply with a European Union emissions
trading scheme (EU ETS).
The scheme would force airline operators to pay for a
portion of the carbon emissions from their flights entering and
leaving the EU.
But the European Commission may have gone too far in showing
goodwill to the U.N. specialised agency, ICAO.
The Commission on Monday said it would put "on hold" plans
to include international flights from outside the EU in its
scheme, to give ICAO time to forge a proposal for a global deal
in time for its congress next year.
That leaves flights within the EU still covered by the
scheme, risking a backlash from budget carriers whose business
is biased towards short haul flights.
And the Commission may still have to reintroduce its
original plans to include non-EU operators if its gamble fails.
ICAO is far from reaching the kind of deal that the
Commission has previously defined as acceptable.
"For the EU, an agreement in ICAO on market-based measures
must include three key elements: it must deliver aviation
emission reductions at least as big as the EU ETS is doing; it
must be non-discriminatory for all airlines; and it must contain
targets and measures for ICAO member countries," the EU's
long-stated position says.
The EU has capped aviation CO2 emissions over the next
decade at 95 percent of their historical levels from 2004-2006
while allowing operators to buy additional permits from other
European emissions from international aviation have doubled
ICAO has previously backed the idea, at its Congress two
years ago, of "carbon neutral growth" where emissions would stop
rising from 2020 compared with 2005 levels, even as traffic
continued to increase.
The timing of the Commission announcement suggests it wrung
assurances from ICAO member countries at a meeting last week to
support the negotiation of a global deal.
At a meeting which concluded on Friday, the ICAO permanent
council of 36 countries, which acts on behalf of the full 191
member states, agreed to set up a political group to propose a
market-based mechanism, such as a global emissions trading
scheme, and submit that as an official resolution at the ICAO's
full assembly at the end of next year.
ICAO has achieved little since the Kyoto Protocol in 1997
gave it the task of cutting emissions from aviation.
The Commission could have made a less drastic retreat, for
example agreeing only to include the outbound flights of non-EU
routes and so effectively halving the burden for operators.
Such a route-based approach, where each country globally
regulates the emissions from its outbound flights (to avoid
double-counting) has been suggested in the past 10 months by a
technical ICAO working group.
Another compromise may have been to take a sovereign air
space approach, where the EU only regulated emissions in its own
air space, including those from flights originating outside the
bloc. But that is almost impossible to implement given the
difficulty of telling when an aircraft crosses any particular
Alternatively, it could have waived non-compliance penalties
for a limited period, pending an ICAO deal.
There is precedent for EU moves spurring action by a
specialised U.N. agency - in this case the shipping equivalent
to ICAO, the International Maritime Organisation (IMO) - but you
have to go back a long way.
On Dec. 12, 1999 the oil tanker Erika broke in two in heavy
winds 40 miles off the north coast of France.
It spilled more than 10,000 tonnes of heavy fuel oil,
polluting about 400 km of beaches and causing an ecological
disaster and public outcry.
The tanker was a conventional, single hull oil tanker with
segregated ballast tanks built in Japan in the mid-1970s.
It subsequently emerged that four out of the eight ships
built in the same series had suffered serious structural damage
involving cracking or buckling of the deck.
Just three months after the incident the European Commission
adopted its first package of post-Erika measures which included
a faster phasing-out of single-hull tankers in European waters.
A double-hull is a ship design where both the bottom and
sides have two independent layers of watertight surface: one
watertight layer is the normal hull of the ship and the second
an additional, inner shell that is normally redundant but
provides an extra barrier if the outer hull is breached.
Later in 2000, following the EU action, the Maritime
Environment Protection Committee of the IMO agreed to accelerate
the phase out of single-hull tankers, which until then had only
applied to vessels of a certain weight and ordered after a
By retreating now from its plans on aviation, the Commission
has put the burden of action on ICAO while at the same time
defused growing tensions with China, India and the United
The Commission can now be clearer about exactly what outcome
at next year's ICAO assembly it would deem satisfactory, which
will allow EU-based airlines and carbon market participants to
appreciate better where they stand.
(Reporting by Gerard Wynn; Editing by Anthony Barker)