Landmark deal to curb airline emissions expected in Montreal

MONTREAL/NEW YORK (Reuters) - The world’s first deal to curb pollution from commercial flights is expected after United Nations-led talks kick off next week in Montreal, although European lawmakers remain skeptical that it would be tough enough.

A passenger plane flies towards Heathrow airport at dawn in London, Britain, September 12, 2016. REUTERS/Toby Melville

The agreement, backed by the United States, China and the United Arab Emirates, aims to limit rising airline pollution to 2020 levels after it takes effect in 2021, but has been watered down by being made voluntary for the first five years. It only becomes mandatory from 2027 for the world’s largest emitters, and would cost airlines less than 2 percent of industry revenue.

Although they have the option of later opting out, 55 countries now say they will join the first phase of the deal under discussion at the UN’s International Civil Aviation Organization’s (ICAO) assembly from Sept. 27 to Oct. 7.

While the European Commission supports the deal, European lawmakers are torn between backing the diluted version, or imposing their own tougher emissions trading scheme on foreign carriers and risking a trade war with China and India.

“We would like a very ambitious (deal),” said European Union Climate Action Commissioner Miguel Arias Canete in New York. “The proposal on the table is not as ambitious as we would like but if there are sufficient numbers of countries participating in the beginning, we can work on ambition.”

Airlines support a global agreement because a patchwork of national and regional deals would be more costly, with the European one sparking a trade row in 2012 when it was temporarily imposed on foreign carriers.

“In order for the Parliament to be satisfied that aviation does not need to be brought back under the scope of the (European scheme), ICAO will need to address these concerns (about the deal not being effective) in the coming days,” said Seb Dance, a member of the European Parliament’s Socialists party, in Brussels on Friday.

Commercial aircraft emit 11 percent of carbon emissions produced from transportation. But aviation was excluded from December’s climate accord in Paris when countries agreed to limit the rise in global temperatures to “well below” 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels.

The ICAO deal would require airlines to limit their emissions or offset them by buying carbon credits from designated environmental projects around the world.

By 2035, ICAO estimates the deal will cost airlines between $5.3 billion and $23.9 billion, depending on the future price of those projects.

According to ICAO data, airlines would pay between $2,542 and $6,585 in 2030 to offset emissions from a flight between Dubai to Sydney aboard an A380, compared with $83,248 in jet fuel, based on oil prices this summer.

While a simple majority of ICAO’s 191 member countries could approve an agreement, the agency prefers to operate by consensus, with most states supporting a deal, said Annie Petsonk, international counsel for the green group Environmental Defense Fund.

“What is at stake is the aviation sector’s commitment to deal with its climate impact,” Petsonk said. “It would be a very big precedent for other industries like shipping.”

Additional reporting by Julia Fioretti in Brussels; Editing by Marguerita Choy