Is 'imperfect' ETS a better option for aviation emissions than a voluntary ICAO draft?

As nations meet today (26 September) to edge a global aviation deal closer, new analysis has suggested that the European Union's Emissions Trading System (EU ETS) is still "superior" to the drafted proposal offered by the United Nation's International Civil Aviation Organization (ICAO).

New analysis has claimed that despite needing an upgrade, the current EU ETS is functioning with the “potential to deliver real emissions reductions”

New analysis has claimed that despite needing an upgrade, the current EU ETS is functioning with the “potential to deliver real emissions reductions”

The aviation industry - which produces around 2% of global emissions - has pushed ahead with a new “watered down” version to reduce emissions, which has already been backed with declarations from Singapore, Japan, Malaysia, Kenya and the UAE over the last few days.

With emissions in the industry set to skyrocket without a global agreement, the ICAO has proposed an emissions reduction plan which would see the sector offset emissions to maintain current CO2 levels during a foreseen period of growth.

It is believed that the outlines would be voluntary until 2027, although transport ministers from the G7 have all agreed to sign up to the deal by 2021. The ICAO claim to have 55 states that are all prepared to be included in the scheme.

The cross-industry Air Transport Action Group’s executive director Michael Gill said: “Real momentum is building for all countries to play their role in producing a robust climate agreement at ICAO. Despite industry reservations that the initial phases of the scheme would be voluntary – the result of consensus-building during the political negotiations – the more States that join, the higher the level of environmental integrity. We encourage all States to display the same leadership position and to volunteer before or during the ICAO Assembly starting next week.”

Superior framework

With Gill calling on states to declare intentions during the ICAO Assembly, which commenced today, analysis released last week by Transport & Environment (T&E) has claimed that despite needing an upgrade, the current EU ETS is functioning with the “potential to deliver real emissions reductions”.

The report notes that utilising allowances as part of a binding agreement was a “superior” method to the ICAO’s voluntary offsetting scheme. The report claims that allowances ensure greater transparency is maintained when collecting emission reduction data; while also stating that, once the surplus of overall ETS is addressed, it will deliver greater reductions.

T&E’s aviation policy officer Andrew Murphy said: “Not only has the EU’s ETS disproved sceptics from both within and beyond Europe, but it has served as a model for nascent trading systems in such countries as China and Mexico. Replacing the ETS with the promise of something to take effect in 2021 which is far less than global, which sets a weaker target and lacks environmental safeguards, is not the way to strengthen Europe or the world’s climate ambition.”

The T&E report agrees with the overarching view of MEPs that the current EU ETS is in need of an “ambitious revamp”, but notes that the current model is still more efficient that global drafts drawn up by the ICAO. The report suggests that the EU should reduce the ETS cap by 2.6% annually while introducing similar scaling caps for aviation allowances.

Airline approach

While the report notes that airlines would need to purchase more allowances to reflect true costs associated with climate impact, it seems that some of the leading firms in the sector are pushing for nations to move ahead with the ICAO’s plans – which could potentially cost the sector $24bn.

Trade groups representing companies such as United Continental Holdings and Boeing will call on delegates at the ICAO Assembly to move ahead with the deal.

Despite concerns from T&E that this push is only to reduce climate-related costs, companies in the aviation sector are still exploring innovative new ways to reduce emissions.

Both Airbus and Boeing are exploring ways to boost efficiency through lighter wing designs and hybrid passenger planes, and FedEx is pioneering the use of sustainable aviation fuels through a partnership which will see millions of gallons of biofuel produced from waste wood biomass.

Earlier this month, Virgin Atlantic announced that an innovative partnership with carbon capture company LanzaTech had successfully produced 1,500 gallons of low-carbon, alcohol-to-jet (AtJ) fuel, which could be tested in Boeing aircrafts by 2017.

Matt Mace


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