Isra-Mart srl : A vision of the future for greenhouse-gas regulation in international shipping over the next few years might be playing out

www.isra-mart.com

Isra-Mart news:

A vision of the future for greenhouse-gas (GHG) regulation in international shipping over the next few years might be playing out in international aviation right now - and it is not a pretty sight.

Airlines, governments, peak industry bodies and environmental groups around the world have weighed into a fight over the European Union’s plans to bring the aviation sector into the EU Emissions Trading Scheme (EU-ETS) next year. Under the plan, all internal and international flights to and from EU airports will be covered, requiring airlines to hand over emissions permits for every tonne of CO2 emitted during operation, much the same way as land-based emitting industries have had to do under the scheme since 2005.

The European Commission in Brussels initiated the move because it believes the aviation sector must do its part among heavy-emitting industries in reducing greenhouse gas emissions. The EU has an overall target to decrease emissions at least 20 per cent below 1990 levels by 2020.

Brussels holds the same view about shipping and a similar regulatory move is expected to be announced early next year if no global maritime CO2 emissions reduction programme is agreed by the IMO or the UN climate change convention, the UNFCCC, by the end of the year. Any programme have to involve substantial reductions along the lines of the market-based measures on the table in front of IMO’s environment committee. But agreement on any such measure is highly unlikely this year. If Brussels does decide to implement its own regional emissions regime on shipping, it would likely take the form of an emissions cap and trade scheme, and the simplest solution would be inclusion of the maritime sector too in the existing EU-ETS, from as early as 2013.

American Airlines, United/Continental Airlines and the US Air Transport Association have taken legal action in the European courts arguing that applying the EU-ETS to foreign carriers exceeds the EU’s authority. US environmental groups have denounced the airlines, saying the legal action is at odds with their marketing claims of being environmentally responsible and actively reducing their environmental footprint.

China is taking a different approach to the US carriers, its aviation regulatory body lobbying Brussels to exempt developing countries’ airlines from the scheme. The EU Commission says it will consider the Chinese request but that it stands by the principle that all airlines should be treated equally to avoid distorting a competitive aviation market.

Meanwhile, German airline Lufthansa has become the first carrier to begin trading EU emissions allowances, EUAs, more than six months ahead of the aviation sector’s entry into the scheme. The experience among land-based emitters in Europe is that those firms that prepare early for regulation and the carbon market are better placed to managing compliance when it arrives.

Most, including the EU, agree that if GHG regulation is to be imposed on shipping and aviation that a global regime is preferable to patchwork measures in different countries and regions. But given the slow progress to agree GHG measures at UN level in both IMO and UNFCCC, the ugly fight in aviation seems destined for shipping too.