Exclusive! EU-ETS- Is the fire missing in the world’s belly?

Neelam Mathews

Oct 1, 2011

Last week, a senior official associated with the EU Climate Action office, when asked about the EU-Emission Trading Scheme (ETS) meet organized by India for non-EU ICAO Council members for a joint action-plan on the levy to be imposed from Jan 1, 2012, said dismissingly: “If they don’t  want to pay, they should keep off European airspace. What is the need for the Joint Declaration?”

That, to most of us on the fringes reporting on this subject, sums it all. The arrogant, narcissistic and high-handed unflinching attitude of EU towards the rest of the world, cannot be overlooked.

With Jan 2012 around the corner, the economically frail EU that took on obligations by signing the Kyoto Protocol, is starting to get the bubbly out as it celebrates its victory in anticipation of collecting a levy that nobody knows where the money will be directed to.Today, every carrier has filed its emission report to the EU, though many under protest. This brings one to the inference - has the world lost the fire in its belly?

Given that India stands to lose much less than other giants, it goes to its credit  that it took the lead by hosting a two-day meet of  non-EU ICAO council members. The U.S delegation was led by the political appointee of President Obama. Of the 25 countries that attended, the credit for which goes to Secretary Ministry of Civil Aviation, Nasim Zaidi, Chile, Thailand and Turkey came as observers and Canada did not sign the Joint Declaration. Australia and New Zealand- that have a guidance program with the EU- did not attend.

Aerospace Diary learns the loudest protests against the EU ETS came from Argentina, Mexico, Brazil, Russia and Malaysia. Saudi Arabia was vehement in that it wanted a voluntary stop to flying over EU airspace.

“All ICAO non EU members of the council were unanimous in opposing EU ETS with one voice to bring diplomatic pressure on EU. The Joint Declaration will be sent to EU on behalf of the group by India, to ICAO Council and individually by each state,” Zaidi tells Aerospace Diary.

For Zaidi, who spent time with individual states in an attempt to reach this end, it was truly a great effort and triumph. India took the lead and for that, it deserves kudos.
 
Meanwhile, one wonders in a world where geo-politics remains supreme, how a politically-active country like the U.S has allowed itself to be side-stepped  given that its Dept of Transportation has the power to take retaliatory steps and a Congress Bill that prohibits US carriers to pay taxes by another government still needs to be passed. One specualtes, is that the U.S (last minute) trump card? Which still however, unfortunately, leaves the developing nations in the same pothole they are in presently.

A major issue remains and that is the lack of understanding by nations over legalities, a lawyer tells Aerospace Diary. “In the EU Court of Law, it cannot challenge ETS on grounds of the Chicago Convention, as EU is not a signatory but individual states are…..Therefore in effect, talks should be held with each country as unlike the U.S, India has not as yet ratified the EU- Horizontal Agreement…….The world needs to challenge the legality of this issue.”

Government statement on Delhi Declaration following non EU members meet on EU-ETS

Posted by- Neelam Mathews

Sept 30, 2011

An international meeting of International Civil Aviation Organization (ICAO) Council and other non-EU Member States was held in New Delhi on 29th -30th September to discuss the inclusion of aviation in the European Union Emission Trading System (EU-ETS). The meeting was chaired by Dr. Nasim Zaidi, Secretary, M/o Civil Aviation. A detailed agenda was deliberated upon including discussions on the legal objections to EU-ETS, policy objections, the role of ICAO- the way forward and discussions on next steps.

The countries present were: Argentine Republic, Brazil, Canada, China, Chile, Colombia, Cuba, Egypt, Japan, Republic of Korea, Malaysia, Mexico, Nigeria, Paraguay, Peru, Philippines, Qatar, Russian Federation, Saudi Arabia, Singapore, South Africa, Thailand, Turkey, United Arab Emirates and United States of America. It was attended by over 70 delegates.

There was wide concern expressed by all countries present, without exception, that the unilaterally imposed EU-ETS measures were inconsistent with the international legal regimes. There were also references of EU-ETS measures violating the Chicago Convention governing international aviation as also provisions of the WTO. The legal infirmities in the EU law were pointed out. It was stated by the various delegates that they were also discriminatory in carriers.

After detailed discussions, a Joint Declaration was negotiated and adopted at New Delhi today, which recalled the relevant provisions of the United Nations Framework Convention on Climate Change (UNFCCC) and stressed the importance of the Kyoto Protocol to its Parties. It also recalled the provisions of Chicago Convention and need for ensuring full compliance with its provisions and highlighted the essential role of aviation in economic progress and also recognized the complementary national, regional and global endeavors developed on the basis of collaboration and mutual agreement to address aviation emissions. It called upon ICAO to continue to undertake efforts to reduce aviation emissions contribution to climate change.

It affirmed the importance of the role the International Civil Aviation Organization in addressing aviation emissions, including pursuant to the request from the Parties to the UNFCCC and recognized that international aviation’s growth makes it necessary to address the long-term growth of Greenhouse Gas (GHG) emissions that contribute to global climate change.

The declaration opposed the EU’s plan to include all flights by non-EU carriers to/ from an airport in the territory of an EU Member State in its emissions trading system (EU Directive 2008/10/101/EC), which is inconsistent with applicable international law and called upon to urge the EU and its Member States to refrain from including flights by non-EU carriers to/ from an airport in the territory of an EU Member State in its emissions trading system. It also called to urge the EU and its Member States to work collaboratively with the rest of the international community to address aviation emissions.

The members present most importantly decided to intend to continue to work together to oppose the imposition of the EU ETS on our operators and invite any other State to associate itself with this Declaration. It was also decided that the group would meet again in the near future.

In addition to the Joint Declaration, a draft demarche to be sent to the EU bilaterally by the nations was also discussed in which it was highlighted that the EUs approach under the directive is unacceptable and that there is a need to foster development of a full range of solutions that achieve performance, improvements rather than insist on imposing one nation’s or region’s particular solution on all other countries. The member states also agreed upon the need to address this issue through the ICAO Council, before which the Joint declaration will also be placed for consideration through a working paper to be presented by the Non-EU Members of ICAO Council.

Exclusive! EU-ETS- Challenging national sovereignty?

Neelam Mathews

Sept 29, 2011

The proposed inclusion of international aviation in the EU Emissions Trading Scheme without consent of governments, has led to a growing barrage of  objections. At the same time governments have expressed their objection to the EU-ETS being imposed unilaterally by the EU, in breach of the international treaty obligations and bilateral agreements.

As the DGCA-led two-day conference on the EU-ETS starts today in New Delhi, the world is expecting fireworks to begin.

Almost all the (Non-EU) ICAO Council members have expressed their open and unambiuous support to India's initiative to convene the meeting to devise a strategy to counter EU-ETS which starts on Jan 1, 2012. 

The non-EU ICAO council member states, which include top 25 economies based on Revenue Ton Per Kilometer, will be meeting in a closed-door session, to strategize what retailiatory steps (read economic measures) they could undertake, on individual and collective basis, to counter EU-ETS.

Most ICAO Council States are to be represented by Sr. Executives of their respective Civil Aviation Authorities/DGCA.  India, is represented by an inter-ministerial team (MEA. MOEF, MOC(Commerce) and MOCA) headed by Secretary Nasim Zaidi.

Australia, which is contemplating its own version of EU-ETS under the guidance program, which would allow it to escape from ETS has declined the invitation.

Interestingly, African nations led by Nigeria have said they have a strategy to deal with EU-ETS.  They may decide to implement their veiled threat to clamp down night curfew at its airports to flights taking off from Europe to counter the unilateral imposition of EU-ETS.

African nations have also said that EU-ETS is a backdoor trick to unilaterally impose emission cuts on developing countries, a measure which is against the spirit of UN Framework on Climate Change.

“IATA is not opposed to emissions trading. …. But the EU’s unilateral and regional approach to ETS could not be more misguided. It is distracting governments from focusing on the real solution—a global approach through ICAO,” said  Tony Tyler, IATA DG and CEO. 

Tyler noted that the EU’s plans challenge national sovereignty. “Europe’s plans contravene international law with the extra-territorial application of taxes. What right does Europe have to charge an Australian carrier for emissions over China? It is an attack on sovereignty that is being challenged by governments. China, India and the US are among states formally opposing the EU ETS. And the US is even processing a bill that will prohibit its carriers from participating. While the EU sees its actions as supporting a positive environmental agenda, the rest of the world sees it as an attack on sovereignty,” said Tyler.

"EU transigence on this issue has triggered a global backlash. The EU needs to face up to the fact that it has over reached its authority...everybody acknowledges that ICAOis the appropriate UN forum for all governments to work together," said AAPA DG, Andrew Herdman.

EU-ETS flaws - IATA:

Distorted markets. Connections via hubs closer to Europe will have a competitive advantage. “Think of it from the perspective of Hong Kong. A direct flight to Europe will be charged on its emissions for its entire journey. But a connection through the Middle East or other closer hubs will be only charged for the last leg of the journey. This is an unacceptable market distortion,” said Tyler.

It will lead to a layering of taxes. Failure to coordinate in a global scheme will lead to a layering of taxes and air passengers could be faced with the burden of compensating for their carbon emissions several times over. “We already see it in Europe with the UK Air Passenger Duty and copycat departure taxes in Germany and Austria. All were implemented using environment as the justification. But there is no guarantee that any will be eliminated when the ETS takes effect,” said Tyler.

Allocation of funds: “There is absolutely no guarantee that any of the monies collected will be used for environmental initiatives. It is simply a punitive tax,” said Tyler.

Tyler also responded to EU Climate Action Commissioner Connie Hedegaard’s comment that the issuing of free ETS allowances would enable aviation to invest 20 billion Euros in clean technologies between now and 2020. “If that were the reality, we wouldn't be complaining! But it’s not. The well-known fact is that airlines will be net purchasers of carbon emissions permits for the foreseeable future. The starting cost is $1.2 billion in 2012. To put that into perspective, the industry’s projected 2012 profit is $4.9 billion. Aviation cannot afford expensive regional mistakes - all parties urgently need to get back around the table to agree a global approach under the leadership of ICAO,” said Tyler.

Air India edges closer to Star?

Neelam Mathews
July 14, 2011

A delegation of Star Alliance headed by CEO Jaan Albrecht will hold discussions with the ministry of civil aviation on July 18 as a prelude to Air India joining the alliance, Chairman and Managing Director Arvind Jadhav said when queried by Aerospace Diary.

The meeting is expected to review all aspects of fulfillment of Star requirements by Air India and to confirm the date of the joining.

“The meeting will be to exchange views because Air India will be joining the alliance,” MOCA secretary Nasim Zaidi told Aerospace Diary.

Asked whether there was any credence to speculation that Air India might withdraw its commitment to join Star, Zaidi said: “No.”

India views ETS

March 17, 2011

Neelam Mathews

NEW DELHI- As the European Union Emissions Trading Scheme (EU-ETS) deadline for 2012 approaches, UK companies are offering India products and services related to the trading of emission reduction credits  and investing in greenhouse gas abatement projects.

As of 2012, all flights arriving at or departing from airports within the EU will be subject to the ETS. This means that by 2020 the CO₂ emissions of those flights are to be reduced by at least 20% of their 1990 levels.

Airlines around the world are grappling to come to terms with this new challenge. “We are concerned about the ETS. This concern is felt not just by India but by the entire block of developing countries. We would like to be guided by the United Nations Framework Convention on Climate Change (UNFCCC)…” said Nasim Zaidi, Secretary, Ministry of Civil Aviation at the UK-India Aviation Meet held here.

“We would like to be guided by a global approach of ICAO,” added Zaidi.

However Willie Walsh, CEO, International Airlines Group (IAG), that runs the combined entities British Airways and the Spanish carrier Iberia, felt ETS would help investment in infrastructure. “ETS is sensitive. BA has been a proponent of ETS….It is cost effective….”

On the other hand, he said proliferation of damaging taxes needed to stop. “We cannot deliver social benefits if you keep taxing us.”

“The concern Indians have about ETS is that they will be penalized because they believe emissions are granted on historical (basis)….” said  Mark Kenber CEO, The Climate Group, UK, an independent, non-profit organization working internationally with government and business leaders to advance  policies and technologies to cut global emissions.

There has been an East-West divide on the ETS. The Association of Asia Pacific Airlines (AAPA) Director General, Andrew Herdman had said of the ETS in 2008: “European legislators have again overreached their authority in seeking to impose this scheme on international airlines ….this particular decision can only be described as an unhelpful provocation……One of the most offensive aspects of the scheme is that Europe is, in effect, appointing itself as tax collector-in-chief for international aviation…..there is absolutely no assurance that such funds will be directed towards meeting genuine environmental objectives.”

India, U.S To Sign BASA In Summer

News

AWIN First Jan 10 , 2011

Neelam Mathews

NEW DELHI

India and the U.S. are now soon expected to sign a Bilateral Aviation Safety Agreement (BASA), civil aviation Secretary Nasim Zaidi tells Aviation Week. “The BASA timeframe is going through a procedure. The Executive Agreement will have to get India’s Cabinet clearance, which is no issue. Next is the implementation procedure for airworthiness agreement, which the FAA has to set the time frame for. The final signing is expected in April/May,” says Zaidi. An initial step was FAA’s technical assessment report—now a completed document—which established the competency of the Directorate General of Civil Aviation and the existence of an aircraft certification system able to produce results equivalent to the U.S. system. Following this, the FAA recommended to the Department of State that they initiate negotiations for the agreement. “BASA will be a great step forward in the aerospace industry. It will ensure mutual acceptance of aeronautical products and parts developed in either country,” said Zaidi, who until recently was the head of DGCA. This will mean aerospace products can be inspected and certified by DGCA and the products exported, Zaidi says. Since many U.S aeronautical products are now being designed and built in India, there is a need for international acceptance of such products. A “shadow” certification is under development with Goodrich in India for four-seat life rafts for use in general aviation aircraft. Development of the certification article is in progress and will become a model for entities involved in the bilateral arrangement. Companies such as Honeywell Software in India are particularly interested in BASA as products designed in India have to be certified in the U.S resulting in delays and added costs. The U.S. already has similar safety agreements in place with Australia, China, Malaysia, New Zealand, Singapore and South Korea.