On 12 November, the EU Commissioner for Climate Action, Connie Hedegaard, relayed a new Commission proposal, backed by the Member States, to "stop the clock" on enforcing international aspects of aviation EU emissions trading.
The suspension of the EU trading emission scheme will operate only on flights from and to the European Union. Intra-European flights will have to comply with current legislation.
The scheme already applies to several industry sectors considered as heavy polluters. Aviation was included in the system through a slow phasing in and it came into full effect in 2012, with the first amounts being due in April 2013. Even though the principle is to tackle pollution, and all actors agree on the necessity to reduce pollution, the scheme has been heavily criticized as it does not provide that the funds raised by this "tax" will be reinvested in environmental projects or in improving infrastructures, such as European airports. Moreover, a purely European scheme has demonstrated that it favors "carbon leakage", meaning that it simply moves pollution towards countries that have not adopted such a legislation.
From a purely legal angle, the scheme has raised international concern and strong opposition from non-European countries that view the EU intervention as an extra-territorial legislation. Indeed, flights of third country airlines departing from, or landing in, a European airport are submitted to the scheme for the entire length of the flight, i.e. including part of the flight that does not take place in the EU's airspace.
A global approach to climate change has been advocated from all parties. It has been indeed long argued that a comprehensive market based mechanism (MBM) adopted worldwide would be much more meaningful against climate change.
The EU Commissioner indicates indeed that the suspension comes as a consequence of the advancement of the works carried out by the International Civil Aviation Organization (ICAO) in order to create an international and global regulation on emissions from aviation. The suspension operates indeed until after the ICAO General Assembly next autumn which is expected to take a decision on the creation of a global emission trading scheme.
The decision of the EU also allows, at least for the next year, to avoid a "trade war" between the EU and some of its major business partners such as the United States, Russia, China and India which have passed, or are in the process of passing, laws forbidding their airlines to comply with the EU trading emission scheme. In addition to that, and as a retaliation against this system China also suspended several orders previously placed with Airbus for the supply of new aircraft.
If the announcement has generally been welcomed as a sign of good will by the European Union towards its international partners, the European airlines, which are facing one of the most long lasting economic crisis ever faced by the sector, are now at a competitive disadvantage against their international competitors.
