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​ICAO Assembly agreed on a roadmap to a Global MBM in 2020


On Friday 4 October, at the close of its 38th Assembly, the International Civil Aviation Authority (ICAO) adopted a resolution that calls for a Market-Based Mechanism (MBM) to tackle emissions from international aviation to be decided in 2016 at the 39th Assembly for global implementation by 2020. With a possible deal in 2016, the aviation industry would become the first global industry to agree on a global MBM to reduce its emissions.

However, no progress has been made on further narrowing down the three options that were on the table for a global MBM (a global offsetting scheme, a global offsetting scheme with revenue generation, and a global cap-and-trade scheme). Actually, the word "three" was removed from the final resolution, thus potentially increasing the number of options under consideration. 

The resolution also includes technical and operational measures to tackle emissions, including the promotion of sustainable aviation biofuels and an encouragement to states to develop or update their states action plans for emissions reduction. Finally the resolution allows states or groups of states to implement their own regional MBM in the interim period under the condition of mutual agreement. 

The European Commission (EC) positively welcomed the ICAO resolution in a statement published on Friday. As a reminder, when the EC decided to stop-the-clock on extra-European flights to give ICAO a chance to agree on a global solution, it listed three key elements that it demanded should be reflected in the resolution:
  • It must deliver aviation emission reductions at least as big as the EU ETS is doing
  • It must be non-discriminatory for all airlines
  • It must contain targets and measures for ICAO member countries

Considering that none of these three requirements listed above were met in the ICAO resolution, and that ICAO simply postponed to 2016 the decision to agree on an MBM by 2020, the statement from the EC is overly positive and inconsistent with previous statements.

On the other hand, Dr Peter Liese, Member of the European Parliament (EP) and Rapporteur on aviation EU ETS and stop-the-clock commented on his web site (and statement) that the outcome of the ICAO Assembly was very modest as there is no guarantee that a global scheme will be implemented in 2020. Also, he said that there is still a risk that the emission reduction target won't be ambitious enough.

He added: "Without the pressure from the EU, ICAO would never have reached an agreement over the introduction of a global scheme. That is the reason why the EU must keep up the pressure. [...] Under current EU law, it is not possible to exclude international aviation from the EU ETS before 2020. We now have to analyze carefully what are the legal and political possibilities which allow for an Aviation EU ETS until 2020."

He said that the wording of the resolution text is not crucial and thinks the EP will not accept an Aviation EU ETS limited to intra-EU flights, and even less so to intra-EU flights of European operators only. The best solution is the airspace solution as this would avoid competitive distortions. If the EP does not manage to adopt a modified text, the stop-the-clock would automatically be lifted and EU ETS would be back to its original full scope.

Since the ICAO resolution is not legally binding and EU ETS rules are not based on ICAO but on EU legislation, all options are still on the table, including the return to the full scope of EU ETS, a restriction of EU ETS to European airspace and the restriction to intra-European flights only.

In the light of the ICAO agreement, the EC, in coordination with the EP and the EU Member States, is now assessing the ICAO resolution and will decide shortly on the next steps with respect to the Aviation EU ETS.

Links to statements, news on Assembly outcome:
» European Commission (Connie Hedegaard)
» European Parliament (Peter Liese) (web site / statement)
» Airlines for America
» Environment Defense Fund
» Flying Clean Alliance
» Transport & Environment

For further information, read related GreenAir Online and Point Carbon articles:
» ICAO Assembly climate change outcome hailed by industry but seen as a missed opportunity by environmental NGOs
» Following ICAO limits on regional carbon schemes, European airlines disagree on next moves over the EU ETS
» Implementing global aviation emissions plan no simple task 
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