EU to extend free CO2 pass to intercontinental flights

A tough battle with the European Parliament seems to lie ahead. Without consent from the parliament and the national governments meeting in the Council the plan cannot go ahead.

“Of course we know that there will be amendments," said a commission source who spoke on condition of anonymity.

“That is the normal co-decision process. We have probably a timeline which is quite tight.”

But the commission contact said he was confident a deal could be reached on time.

In the EU, companies in several sectors have to pay to pollute. Some 11,000 installations are a part of the ETS, which means the companies owning those factories and power plants have to hand in carbon credits for every tonne of CO2 they emit.

The theory is that by putting a price on pollution, companies will move to more climate-friendly energy sources.

The practice is that the ETS price for years has been far too low to provide this incentive, but that is another story.

Commercial airlines are also obliged to pay credits – or allowances – for every tonne of CO2 emitted. However, the EU decided from the beginning in 2012 to give an exemption to flights coming to and from airports outside of the EU.

Only flights that take place within the territory of the 28 EU member states (plus Iceland, Liechtenstein, and Norway) are covered.

The exemption given to intercontinental flights came after objections from the airline industry and non-EU countries like the US, China, Russia, and India.

It was tied to the commitment by the International Civil Aviation Organisation (ICAO) to come up with a global system that makes airlines contribute to the fight against climate change.

ICAO is an agency of the United Nations. It has been trying to regulate emissions from flights since 1997.

Last October, ICAO members agreed on the principles of an offsetting scheme.

To stimulate the international process, the commission decided to extend the exception.

“We have a resolution of the ICAO assembly,” said the commission source. “When this body decides to go forward with such a scheme, that is a very credible commitment for us.”

But not everyone agrees. A German MEP Peter Liese, from the largest political group in the EU parliament, The European People's Party, who was involved in the first derogation in 2012, said the ICAO proposal was “disappointing”.

He said in a press release issued this week that the proposal is better than nothing, but falls short of the goals of the internationally agreed Paris climate treaty.

“First of all, ICAO didn’t agree on any reduction of the emissions, they only talk about carbon neutral growth,” said Liese.

“Second, the quality of the offset mechanisms, which they decided upon, is very unclear.”

The parliament has some leverage over the commission.

If it blocks adoption of the legislation, the derogation is automatically lifted. That would mean that over the year 2017, airline companies would have to pay ETS allowances.

When this website wrote to MEP Liese asking whether he would consider delaying tactics, his assistant wrote back the “analysis is correct”, and forwarded a statement.

“Depending on the development at the international level and the participation of third countries to the CORSIA, we also need to consider the inclusion of intercontinental flights again”, Liese said according to the assistant.

CORSIA is the name of the global scheme, the Carbon Offsetting and Reduction Scheme for International Aviation.

The annual ETS bill is due in April, meaning a deal must be done before April 2018.

“Ideally the European Parliament and the Council will agree on the amendment before the end of the year, or very early in 2018,” said the commission source.

According to the European Environmental Agency, CO2 emissions from flights have increased between 1990 and 2014 by a whopping 80 percent, and are expected to grow another 45 percent by 2035.