Showing posts with label ETS. Show all posts
Showing posts with label ETS. Show all posts

Moscow: 29 nations sign declaration against EU Emissions Trading System

1:12 AM nero
Several countries, including China and the US, have joined Russia in signing a joint declaration against the European Union’s Emission Trading Scheme (ETS) carbon tax on foreign carriers, which took effect Jan.1 this year.

The declaration was signed at the Moscow international conference by Armenia, Argentina, Republic of Belarus, Brazil, Cameroon, Chile, China, Cuba, Guatemala, India, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Russian Federation, Saudi Arabia, Seychelles, Singapore, South Africa, Thailand, Uganda and the US.

China has formally banned its airlines from participating in the scheme without government approval.

The declaration also listed several retaliatory measures that included filing a complaint with ICAO, prohibiting airlines from participating in the EU ETS, mandating EU carriers to submit flight details and other data, assessing whether the EU ETS is consistent with the WTO agreements, and reviewing bilateral air services agreements. Other countermeasures include suspending negotiations that enhance operating rights for EU airlines and imposing additional levies on EU carriers.

It also gives other countries the latitude to create other retaliatory measures in compliance with their own legislative bases.

Russian deputy minister for transport Valeriy Okulov said Russia is planning to prohibit its local carriers from paying for emissions. The declaration could pass in the first half of 2012.

Okulov also said that Russia could reinstate overflight fees on routes over Siberia. The fees were introduced by the Soviet Union in 1986 to compensate for traffic that Aeroflot lost to foreign carriers. The payments were made part of bilateral air services agreements between member states and the Russian Federation. In 2006, the EU and the Russian Federation agreed to phase out costly Siberian overflight fees by 2013.

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26 nations meet in Moscow next week to discuss ETS Retaliatory measures

9:31 AM nero
 26 powerful nations dubbed the coalition of the unwilling amongst them China, India, the United States and Russia will meet in Moscow next week to look for a coordinated retaliation against the EU Emissions Trading System that went into force in January this year.

The EU introduced a unilateral measure to add aviation into its Emissions Trading System, a move that will force even foreign airlines landing or taking off in Europe to acquire permits corresponding to the amount of greenhouse gases emitted during the entire flight — regardless of where it originated or ended or the nationality of the airline.
Emissions Trading System: Time for some hard talk?


The measures have been vehemently opposed by China, US and Russia amongst other nations but Europe believes these countries are not their best friends when it comes environmental issues and has vowed not to back down(or to be intimidated into backing down) on the implementation of its ETS.

The countries will adopt a few hard measures to force Europe to back down. According to the New York Times, "Those countermeasures include following China’s lead in banning its airlines from paying the charges unless and until the Chinese government grants permission; imposing punitive levies on European airlines when they fly over other countries’ air space; reviewing bilateral and “open skies” agreements covering such things as landing rights and market access, and freezing consideration of any new routes or capacity, according to a draft discussion paper seen by the International Herald Tribune on Friday. 

In addition, the paper calls on governments to consider reopening trade agreements in sectors other than aviation and to freeze trade negotiations as a way of “putting pressure on E.U. industries.”
The meeting would “send a very strong signal to our E.U. friends that other countries are really angry and really preparing something strong,” said a Chinese diplomat, who spoke on condition of anonymity because of the sensitive nature of the issue.
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EU has said it would adapt its law if ICAO comes up with a  global solution. According to the EU Spokesperson for Climate Action Isaac Valero-Ladron: "A solution is clear: rather than asking for the suspension of the only functioning system that exists to address aviation's carbon emissions, we'd like to see the countries criticising the EU come forward with concrete suggestions, in the framework of ICAO, for an even better, global solution,"

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EU Emissions Trading Systems: Asia Piles Pressure on Europe

3:36 PM nero
Asian aviation leaders have signaled that they will; step up their war against the European Union's Emissions Trading System(ETS). Attending the Singapore Airshow was the EU Vice President Siim Kallas who has held the EU position firmly, telling the Singapore Airshow's Aviation Leadership Summit that while the EU is willing to negotiate over how the Emissions Trading System will apply to airlines outside Europe, the EU will only do so on its own terms and is will be in no hurry to give ground.

Last week, the Chinese authorities banned its airlines from complying with the EU ETS. A legislation in the US Congress will also have a similar effect, preventing American airlines from complying with the ETS. It seems the EU will only lord it over the smaller weaker nations, whose airlines have much smaller carbon footprints.

Emissions Trading System" Will Europe Back Down?
 EU will be faced by a scenario of wide-scale refusal by airlines outside the EU to comply with its ETS. How will Europe respond? The ETS regulations call for punitive fines against operators who fail to account for their carbon emissions and pay for their carbon credits. The Chinese airlines have already indicated that they will not share this information with the EU. China and the US, which have been leading the charge against the ETS, have both threatened Europe with serious consequences if it does back down on its plan, raising the spectre of an aviation trade war.

“This issue must be solved and tackled by ICAO…we would prefer multilateral solutions,” Kallas admitted. “We are not trying to dominate the world…transport is a dynamic part of our economy and is the only sector in Europe that has increased emissions of carbon dioxide. [Therefore] it is quite natural for certain measures to be implemented.”

Europe “Ready To Negotiate”
Kallas indicated that the EU is “ready to negotiate within our own framework…I don’t think this is economically a big problem. It is mostly a matter of principle. That is why it has been raised to a political level.” He suggested that steps should be taken to avoid a trade conflict in future. “We are serious in negotiating a solution.” However, he added: “If [non-EU members] say nothing will happen until you suspend the ETS and [only] then start negotiations, that is unacceptable.”

Voices against the EU ETS were loud and clear here in Singapore. “This tax is morally unacceptable even though it is economically tedious. It has no sense of balance,” said Martin Craig, CEO of the Pacific Asia Travel Association (PATA), speaking on behalf of his Asian counterparts.

However, Kallas seems to be in no hurry: “The conditions are not right yet for EU ETS to be suspended because we have time until 2013,” he asserted. During the 2012-2013 trading period, 85 percent of the total available allowances will be allocated to airlines free of charge while the remaining 15 percent will be auctioned by the EU. But the potential costs are troubling airlines, not to mention the extraterritorial nature of the scheme.

Singapore Airlines (SIA) is one airline that has taken a clear stand on ETS, preferring to coordinate through the International Air Transport Association, said Goh Choon Phong, SIA’s CEO. But as an industry association with clear vested interests, the EU is highly unlikely to accept it as an honest broker in settling the increasingly bitter dispute.

Airline Bottom Lines
Meanwhile, aircraft manufacturers such as Airbus, whose business is currently driven by the growth in the Asia Pacific, voiced concerns over ETS, fearing the issue could hurt airline bottom lines. Airbus CEO, Tom Enders stated: “[We] hope it is avoidable. What started as a solution for the environment has become a potential trade conflict.” As Europe’s top airframer it clearly has the most to lose from any trade war over ETS.

A major issue remains over legalities, “In the EU court of law [European Court of Justice], ETS cannot be challenged on grounds of the Chicago Convention, as the EU is not a signatory [to the Convention], but individual states are. Therefore, in effect, talks [on ETS] should be held with each country, as many countries have not as yet ratified EU horizontal [cooperation] agreements. The world needs to challenge the legality of this issue.”

IATA director general Tony Tyler questioned the very logic of the ETS. “Departure taxes in the UK, Germany and Austria–introduced as environmental measures–amount to well over €4 billion. At current market prices for UN-issued Certified Emissions Reduction [credits], that would offset the world’s CO2 emissions about one-and-a-half times. And ETS is being added on top of that!”

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Aviation and the Emissions Trading System: Will Europe Fail?

5:49 AM nero
Europe adopted a unilateral approach to including international aviation to its own regional Emissions Trading Scheme , a move which has ruffled many feathers especially of the powerful players in China, Russia and the United States. This week, China directed its airlines not to participate in the EU ETS.

The China Aviation Administration of China (CAAC) said the EU-ETS could hit Chinese carriers with additional carbon emission charges of up to RMB 17.6 billion ($2.8 billion) by 2020 and urged Chinese airlines not to pay a charge on carbon emissions imposed by the EU. The body also barred them from hiking freight fees or adding other fees accordingly without government permission.

Emissions Trading System: Will EU Fail?
 And now China has partnered with 25 other nations to oppose the EU ETS scheme, including Russia. At best, countries are likely to undertake retaliatory measures against EU airlines in their various markets resulting in a market distortion and more charges for airlines and travelers. Most countries support the global sectoral approach under International Civil Aviation Organization(ICAO) that ensures aviation emissions are accounted for only once but the EU decided to add aviation to its ETS citing slow progress at the CAO led process. It seems as opposition stiffens and country's resolve to countermeasures, a sort of trade war emerges and the EU's stance will be not be sustainable in the long term.

Many countries view EU's inclusion of their airlines into its ETS as a sort of "colonial" arrogance where Europe's still feels it can violate other countries' sovereignty and impose taxes on their airlines as it wishes. With opposition now being led by China, the United States and Russia, the opposition can only stiffen as many weaker countries, particularly those in Africa, Latin America and Asia, will be emboldened to challenges Europe's ETS. Europe will likely fail and something has got to give.

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Emissions Trading System: Europe Isolated

10:32 AM nero
The EU has been further isolated from the world by last month’s ruling to include aviation in the Emissions Trading Scheme (ETS) by the Court of Justice of the European Union (CJEU) according to Airlines for America (A4A). “This further isolates the EU from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change,” A4A said in an initial reaction.

A4A said the CJEU “did not fully address legal issues raised and has established a damaging and questionable precedent by ruling that the European Union can ignore the Chicago Convention and other longstanding international provisions that have enabled governments around the world to work cooperatively to make flying safer and more secure, and to reduce aviation’s environmental footprint.”
Hot Issue: The Emissions Trading System(ETS)
 A4A, together with two of its members—United Continental and American Airlines—initiated the legal challenge to the EU’s inclusion of aviation in its ETS in 2009 and said it will review its options to pursue in the English High Court.

IATA said it was disappointed at the CJEU’s ruling to uphold EU plans to include international aviation in its ETS from 2012 and noted the decision represents a “European legal interpretation of EU ETS.”
“The CJEU decision may reflect European confidence in European plans. But that confidence is by no means shared by the outside world where opposition is growing,” IATA’s DG and CEO Tony Tyler said.

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ICAO Chief Pledges a Global Emissions Proposal by end of 2012

10:13 AM nero
As airlines come to terms with the implementation of the EU Emissions Trading System, the ICAO Secretary General Raymond Benjamin pledged last week to have a proposal on how to regulate airline emissions on a global basis by the end of this year.


Speaking at the International Aviation Club in Washington, Mr Benjamin said that in the same way as airline safety is a global program, so the industry’s environmental program is also a global issue. “While there are clear differences among member states, we still have to come to a global solution,” he said.

ICAO Secretary General Raymond Benjamin
 Raymond declined to give details on what the emissions proposal might contain. But he said it would use the ICAO resolution that was agreed in 2010 as a framework and it would be put on the table by the end of the year. “You have my word on that”

With specific regard to the controversial EU Emissions Trading Scheme (ETS) that went into effect Jan. 1, Benjamin said he preferred not to resort to using Article 84 of the Chicago Convention to resolve the dispute between the European Commission and those who are against the EC’s unilateral imposition of an emissions tax. Article 84 gives the ICAO council the authority to decide on disputes that cannot be settled between member states and was ultimately used to settle the hushkit dispute between the US and Europe.
Article 84 would not progress the issue and would deviate resources, Benjamin said.  “I am very happy that I don’t have Article 84 [legal proceedings] right now because that means we can keep working on the issue,” Benjamin said. But he added, “I am sure the legal file is ready.”


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