By Colin Baker in Edinburgh
The European Parliament is calling for an aviation industry specific emissions trading scheme (ETS) and the introduction of charges to help reduce the environmental impact of air transport.
The Members of the European Parliament (MEPs) are urging the introduction of charges, including a kerosene tax on all domestic and intra-European Union (EU) flights, to "reflect the extent to which any emissions trading scheme falls short of requirements".
There was also a call for a separate trading scheme for aviation emissions, on the grounds that "due to the lack of binding commitments for international aviation emissions under the United Nations Framework Convention on Climate Change and the Kyoto Protocol, the aviation sector would be unable to actually sell into the ETS". The European Commission (EC) and the European aviation industry want aviation to be included in the wider European ETS.
Last December, the EU Environment Council (consisting of EU environment ministers) agreed that the inclusion of aviation in the European ETS was the best way forward and called on the EC to produce a legislative proposal by the end of 2006. Brussels aims to include aviation in the ETS by 2008, although most observers see this as an ambitious target, with 2012 a more likely, but still difficult, goal.
An Aviation Working Group, made up of member states, industry and environmental groups, has also been examining the implications of aviation joining ETS, but there is no agreement on the best way forward. A key challenge is how to include aviation in an existing ETS scheme when the industry is excluded from the Kyoto Protocol, and so cannot be issued with the assigned amount units that are the currency of the ETS scheme.
However, industry groups and some member states argue that a separate scheme for aviation would not be cost-efficient and could pose a higher burden on the aviation industry. Such a strategy would also go against ICAO's principle of aviation taking part in established emission trading schemes.
The European Parliament, meanwhile, says: "Accounting would be substantially simplified by a separate, closed system." MEPs added that a gateway scheme - an option that would allow trading between the aviation sector and the ETS as long as there was no net transfer of allowances to the latter - should be permitted only on a carefully limited basis.
MEPs add that if aviation is to join ETS, there should be a pilot scheme covering 2008-2012. So that the ETS market is not distorted, the MEPs want a cap on the number of emission rights aviation can buy from the market, and a requirement to make a proportion of the necessary emission reductions without trading, before being allowed to buy permits. MEPs also warn that they "do not rule out accompanying local measures having to be taken in future".
On the matter of initial allocation and allocation method, MEPs want to see the amount set at EU level to avoid market distortion, and argue that an auction system would be the best option. But industry bodies are less than impressed with the outcome.
Noting the tension between moves to improve the environment and the growing demand for air travel, the Association of European Airlines (AEA) complains: "Unfortunately the Parliament's vote blew away the notion of plotting a course that would satisfy both objectives. It opted for an unequivocal policy path involving a reduction in the number of airline passengers in Europe, who would be priced out of the market by a combination of fuel taxes, ticket taxes and environmental charges."
AEA secretary general Ulrich Schulte-Strathaus notes: "It is not an easy process, but now is not the time to reject this approach and opt instead for the systematic dismantling of a key industry by political manipulation of the price structure."
Sylviane Lust, director general of the International Air Carrier Association, says the MEPs are "totally ignoring economic realities" and that a separate ETS scheme for aviation is "totally unrealistic". ■
Source: Airline Business
