Amendments Proposed by the European Parliament to the European Commission's "Fit for 55" proposal on the revision of the EU ETS Directive

On 20^th May 2022, the European Parliament released a report on the proposal for a directive of the European Parliament and of the Council amending Directive 2003/87/EC as regards aviation’s contribution to the Union’s economy-wide emission reduction target and appropriately implementing a global market-based measure. This report consists of the draft European Parliament legislative resolution ammending the proposal for changes in the EU ETS for Aviation under the Fit for 55 Package by the European Comission.

Click Here to read our summary of what was originally proposed by the European Comission.

Below is our summary of the amendments proposed by the European Parliament:

BACKGROUND:
 

• EU ETS & CORSIA
  • The Directive 2003/87/EC (EU ETS) included Aviation in it from 2012 onwards.
  • The ‘stop-the-clock’ derogation which excluded all extra-EU flights from the EU ETS applies until 2023.
  • ICAO introduced Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) effective 2019 onwards.

 

• Recent Developments
  • COP26 anticipated an average temperature increase of between 1.8°C and 2.4°C
  • Aviation accounts for 2-3 % of global CO2 emissions.
  • In the Union, CO2 emissions from aviation account for 3.7 % of total CO2 emissions.
  • The aviation sector generates 15.7 % of transport CO2 emissions, making it the second biggest source of transport greenhouse gas emissions after road transport.
  • Intergovernmental Panel on Climate Change (IPCC) alerts that limiting warming to close to 1.5°C or even 2°C will be beyond reach.
  • Existing pre-COVID-19 pandemic projections point to an annual increase in aviation emissions at the global level by 150 % by 2040, compared to 2020.

AMENDMENTS:

• Non-CO2 Aviation Emissions
  • In addition to CO2, aviation affects the climate through non-CO2 emissions such as:
    • water vapour (H2O)
    • oxides of nitrogen (NOx)
    • sulphur dioxide (SO2) etc.
  • Non-CO2 aviation emissions can no longer be ignored.
  • The Commission will set up a monitoring, reporting and verification scheme for non-CO2 aviation emissions and will submit a legislative proposal by 2027 .
  • Until the adoption of a legislative proposal the CO2 emission factor for emissions from aviation activities shall be multiplied by 1.8 in 2028, by 1.9 in 2029 and by 2.0 in 2030. 

 

• EU Allowances
  • The total quantity of free allowances for aviation should be consolidated and subject to the linear reduction factor and shall be phased out by 2025
  • Use of revenue from auctioning aviation allowances
  • A part of the revenues will be allocated to the Climate Investment Fund 
  • 15 % of revenues for emissions from flights leaving the EEA will be allocated to the UNFCCC Climate Funds.
  • The remaining revenues will be used by the Member States.

 

• Inclusion of EEA to 3^rd Country Flights
  • The Commission’s assessment of CORSIA has shown that CORSIA is not in line with the global level of ambition required to meet the goals of the Paris Agreement.
  • All flights from EEA to 3^rd countries to be reportable under EU ETS from 2024
  • Possibility of inclusion of flights from 3^rd countries to EEA from 2028 if CORSIA is not deemed feasible
  • If the Commission determines that CORSIA is insufficient, the Commission may present a legislative proposal to end the temporary derogation for flights arriving at an aerodrome located in the EEA.

 

• Harmonizing CORSIA Offsets and EU Allowances
  • The expenditure on credits used for CORSIA flights from the EEA to third countries implementing CORSIA should be deductible from the financial obligations under the EU ETS.
  • The allocation for the year 2024 should be based on the total allocation to active aircraft operators in the year 2023.
  • The allocation from 2024 onwards will be increased to account for EEA to 3^rd country flights.

 

• CORSIA
  • Airlines based in the EU can use international credits for compliance with CORSIA for flights to or from third countries participating in CORSIA
  • Aircraft operators should report in a user-friendly manner their emissions and offsetting.
  • Any deviation from the CORSIA baseline should be deemed as non-compliance from 2024.
  • ICAO in its 42^nd Assembly (Sept 2022) updated the baseline to 85% of 2019 emissions

 

• Sustainable Aviation Fuels
  • During the period from 2024 until 2029 allowances will be allocated to help in covering the remaining price differential between fossil kerosene and SAF for individual aircraft operators, in proportion to the amount of SAF used and reported under Refuel EU.
  • For early movers, 20 million allowances will be reserved from 2024 until 2030, and an additional 20 million allowances will be reserved when flights departing from the EEA to third countries are part of the EU ETS scope for the same time period.

> Read Commission’s ‘Fit for 55’ climate package proposes removing European aviation’s fuel tax exemption, by GreenAir Online
> Read EU ETS Summary by ICAP
> Read Fit for 55 summary by Transport & Environment

Download center

   

  Back to all Verifavia News