EU agrees to bend on aviation emissions, still faces resistance

Reuters

By Barbara Lewis and Valerie Volcovici

BRUSSELS/MONTREAL, Oct 2 (Reuters) - European countriesexpressed support for an "imperfect" compromise to curb globalaviation emissions on Wednesday but still face pressure to dropa key demand - to be able to apply the EU's carbon tradingscheme to foreign air carriers.

Delegates to the U.N.'s International Civil AviationOrganization (ICAO) are meeting in Montreal to try to hammer outa global agreement to set a path toward creating a globalmarket-based mechanism by 2020 that would help limit growingcarbon emissions in the sector.

Debate at the U.N. body's triennial assembly on Wednesdayfocused on the most contentious aspect of a global deal - aframework to allow national or regional market-based schemes toapply to airlines before 2020.

The framework is needed to allow the EU's Emissions TradingScheme (ETS), the only existing regional scheme that applies toforeign carriers, to continue to function for the next sevenyears.

Several EU delegates stressed that Europe has alreadyconceded a lot in negotiations by scaling back the reach of theEU ETS to sovereign airspace rather than entire routes.

They voiced support for compromise text introduced by ICAOassembly President Michel Wachenheim Wednesday morning to try toclinch a deal by Friday, the last day of the assembly.

But a large group of countries, including India and China,supported an alternative proposal made by Russia that would notallow programs such as the EU ETS to apply to foreign airlines -even if it only applies to sovereign airspace.

A delegate from Pakistan said that allowing regional schemesto apply to foreign carriers - even for portions of sovereignair space, violates the Chicago Convention, an internationaltreaty that ensures fairness for the global aviation sector.

A French delegate disagreed in his speech saying that thereis nothing in the convention that "opposes that states be ableto take measures over national airspace."

A bloc of over 50 African states also raised sharpopposition to an attempt by the ICAO assembly president'sattempt to address festering concerns about which countrieswould be exempt from complying with regional schemes, drawingopposition from many countries.

His text aimed to exempt airlines from regional schemes basedon routes rather than country, and based on a hard number ofso-called "revenue ton kilometres" (RTKs) that would be reducedeach year after 2014.

That would replace an earlier plan to exempt countries thataccount for less than 1 percent of global RTKs.

Englebert Zoa Etundi, Cameroon's representative to ICAO,told Reuters Wednesday that the bloc cannot agree to a text thatdoes not include the 1 percent threshold because it is necessaryto protect Africa's burgeoning airline industry.

EU IMPLICATIONS

The outcome of the assembly will have implications forinternational relations, aviation competitiveness and the EUETS, which is already struggling under a burden of surpluscarbon allowances.

The EU had decided to include foreign airlines in itstrading scheme after a decade of ICAO talks failed to reach adeal on aviation emissions, which account for 5 percent ofglobal warming, according to U.N. data, and are expected totriple by 2050.

But, after international outrage, the bloc agreed to suspendfor one year its law for intercontinental flights.

Sources close to the matter said Britain, France and Germany- which represent some of the EU's biggest aviation interests,including IAG, Airbus, Deutsche Lufthansa and Air France-KLM - were instrumental inagreeing to that delay, and led the way for the EU to back downagain at the assembly.

While the three powers dominate the European Council ofmember states, they have less influence in the EuropeanParliament, which has said it needs a strong deal.

WINDOW OF OPPORTUNITY

Countries will resume debate on the text on Thursday.

European Commission spokeswoman Helen Kearns said anyagreement was unlikely before the very end of the talks.

"Europe has already been extremely flexible in agreeing tostop the clock," she told reporters. "In doing this we avoided aprobable trade war. We now have a very important window ofopportunity between now and Friday."

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