EU-ETS: Does this Mean War?
While business aircraft operators tear their hair out trying to comply with the European Union’s controversial emissions trading scheme (ETS), the issue is threatening to escalate into a full-blown trade war. But an ETS panel held at EBACE 2012 in Geneva today heard that the EU appears to have no intention of backing down, with the discussion underscoring the vast gulf between the aims of the carbon cap-and-trade policy and the realities of compliance.
“What used to be an environmental mission has become a worldwide trade war,” Marina Becher, TAG Aviation’s EU-ETS fuel manager, told the panel. She noted that as many as 140 countries outside the EU have threatened economic retaliation against what she referred to as Europe’s “authoritarian carbon pricing” and noted that business aviation operates the “youngest and most efficient fleet of aircraft worldwide–already a great commitment to the environment.”
The panel, moderated by Guy Visele, a legal advisor to the European Business Aviation Association and chairman of IBAC’s Environmental Issues Working Group, also included Yolanda Villar Rubarte, director general Climate Action for the European Commission; Steve Brown, senior v-p, NBAA; and Andrew Watt, head of the Environmental Unit of Eurocontrol.
Though the ETS rules exempt some business- and general-aviation aircraft from paying for emissions, they do not remove monitoring and reporting requirements. Rubarte noted that Eurocontrol, Europe’s central air traffic control agency, offers a “small emitter’s tool” that provides simplified supporting documentation that automates, simplifies and lowers the cost of compliance. She acknowledged that “some third countries continue to express concerns with the EU law,” despite the fact that the European Court of Justice itself ruled last December that the policy was fully compatible with international law.
Belcher argued that the business aviation community operates “the youngest and most efficient fleet of aircraft worldwide–already a great commitment to the environment.” She then catalogd a host of obstacles that made business aviation operators’ compliance an expensive and time-consuming, if not impossible, toil. These include a lack of harmonization of rules within the EU, the absence of assistance to help operators comply with their obligations and the fact that the private entities charged with verifying aircraft operations are not qualified to discharge their duties.
NBAA’s Brown brought the perspective of non-European operators. He said EU-ETS compliance questions were the number-one subject of inquiries from members, and that, overall, NBAA members had come to five key conclusions about the rule: “First, it’s very complicated; second, when they look at the difference between commercial and private operations, it’s very clear it’s a discriminatory protocol; third, it’s extraterritorial and doesn’t apply in European airspace alone but outside, notwithstanding the European Court ruling; fourth, the reality is, whatever funds are collected by the EU from this policy would not be dedicated to aviation research and improving the environment or climate mitigation; fifth, it’s not sustainable as a global approach.”
Brown continued, “We would hope that Europe and the European Union would join with 140 other nations of the world and really have a multilateral discussion of the best way to have a global scheme.” Noting that the EU intends to reopen the issue in 2014, he said, “It isn’t clear why it can’t be done now instead of some arbitrary time in the future.”
Andrew Watt of the Eurocontrol, picking up on Rubarte’s comments about the “small-emitter’s tool” and other support offered, said his agency has been approached by very few operators to avail themselves of his agency’s assistance, which he attributed to Eurocontrol’s lack of marketing savvy, owing to its civil-service DNA. He took his time at the podium as an opportunity to reverse that situation, highlighting the data Eurocontrol collected and its ability to accurately estimate carbon emissions of individual aircraft on each flight. However, the charts and data he presented instead underscored the haphazard nature of EU airspace and of its organization, perhaps only cementing for attendees the impression of the unworkability of the EU-ETS system.
Rubarte, asked about the penalties operators faced for failure to comply, said that EU members each had penalties, but “we have to be sure that the cost of compliance is not greater than the cost of noncompliance.” However, each EU member has its own statutes, penalties and policies, ranging from taking no action or granting of a grace period to “confiscation and seizure of an aircraft.”
Some audience members, instead of posing a question, simply commented on what they saw as the intractability of the looming confrontation. One U.S.-based aviation attorney said, “I tell clients to ignore the process because it’s never going to be implemented.”
EBAA’s Visele had the last word: “EU-ETS is the law. We have to try to comply.”
Attention turns now to ICAO, which is taking up the subject of finding a global solution to aviation’s carbon emissions, one that the EU may recognize over its own. As Rubarte said during her presentation, “The EU is committed to working bilaterally and multilaterally to move forward.”
But it is ICAO’s fruitless procrastination on the issue that provoked the EU’s unilateral action on ETS in the first place. With operators required to account for their first full year of emissions in March 2013, the political clock is ticking and it remains to be seen whether ETS’s opponents will follow through with the threats they have made.