All aviation eyes were turned toward Montreal early this month as the International Civil Aviation Organization (ICAO) tries to get its arms around a worldwide plan to control jet aircraft emissions.

The big question is whether ICAO’s 191 member states can agree on a plan to curb emissions to the satisfaction of the European Union (EU), which has unilaterally crafted its own emissions trading scheme (ETS) that would capture not only EU aircraft, but also airplanes flying into, out of and through the 28 EU member states.

If ICAO’s 38th triennial assembly session could effectively cap the aviation industry’s emissions worldwide, it would supersede the EU-ETS. The EU’s top climate official said last November that the ETS would not be enforced before the ICAO meeting.

Congress got involved in the issue last year, when both chambers passed legislation by Sen. John Thune (R-S.D.) barring U.S. operators from participating in the EU-ETS. President Obama signed the bill into law shortly after Thanksgiving.

Connie Hedegaard, the EU’s climate action commissioner, said the cap-and-trade system would probably be shelved if ICAO can work out a way to curb emissions at the same level that the EU has proposed. But European officials will not get rid of the ETS law until ICAO has committed to a solution.

The ICAO general assembly was scheduled to begin discussing a global market-based mechanism (MBM) to control the increase of carbon dioxide emissions from air transport on September 26, with a final vote planned for October 2. The proposals call for an MBM to be ratified by the 39th assembly in 2016 and fully implemented in 2020.

In the meantime, the EU-ETS would remain in force, although with a narrower scope. Although all sides of the at-times fractious debate seem ready to compromise to avoid the trade war that could be sparked by threats of retaliatory sanctions from leading opponents of EU-ETS, there are some significant complications to be resolved in terms of what form the MBM would take and how the EU would have to amend its established ETS legislation.

Assuming the draft resolution is adopted, for EU officials to fulfill their commitment to stop applying ETS to aircraft flying outside EU airspace they will need to change the existing ETS regulation, and that will mean going back to the European Parliament to ask them to retroactively rubber-stamp any deal reached through ICAO.

As things stand, ETS is temporarily suspended for flights outside EU airspace under the EU’s “stop the clock” initiative.

Hedegaard warned last November, “If this exercise does not deliver–and I hope it does–then needless to say we are back to where we are today.”

Support for an International Plan

Nancy Young, Airlines for America (A4A) vice president for environmental affairs, said A4A welcomed the European Commission’s decision last year to “stop the clock” on the ETS, providing time for ICAO to reach a global aviation scheme. However, the EC has continued to implement the ETS on intra-European flights. Young said A4A did not like the intra-European tax, but has not opposed it.

“This compromise represents clear progress toward a global solution for addressing aviation emissions,” said NBAA COO Steve Brown. “ICAO has continually shown its dedication to establishing a global approach to aviation-based carbon emissions, and this proposal reaffirms that commitment. At the same time, the proposal to stop implementation outside the airspace of EU nations addresses the concerns about the ETS that have been raised in regard to national sovereignty.”

The European Business Aviation Association (EBAA) reaffirmed its support of an international MBM to address aviation CO2 emissions under ICAO. Such a mechanism is vital to deter the creation of a patchwork of unilateral national and/or regional policy measures across the globe, EBAA said. In particular, its precise timeline for the implementation of a global MBM by 2020 constitutes undeniable progress compared with previous positions.

“We have already witnessed the folly of imposing market-based measures on a strictly regional basis,” said EBAA CEO Fabio Gamba. Among those is the fact that the financial and administrative burden of EU-ETS has fallen disproportionately on the shoulders of small business aircraft operators flying mostly within Europe.

“A truly viable MBM must aim to minimize competitive distortion and administrative complexity,” Gamba explained. “The current EU-ETS has failed to do either; first by imposing different compliance thresholds for commercial and non-commercial operators and, more recently, by enacting a derogation, which has distorted competition by reserving EU-ETS for intra-European flights only.

“To that end, we welcome the council’s resolution, which recognizes that the administrative burden of an MBM for operators with low levels of international activity should not exceed the benefits from their participation in the scheme,” he said.