The French government is urging the EU to revisit
its decision to include aviation in its Emissions Trading System (EU ETS), as opposition
continues to build over the controversial scheme. Meanwhile, prices of carbon
permits continue to falter, raising questions over the future of the ETS as a
whole.
“It seems absolutely vital that the EU…deploy every
effort necessary to find mutually acceptable solutions with the third-party
countries,” French Prime Minister François Fillon
said in a letter to European Commission President José Manuel Barroso in late March. The letter, dated 22 March, was made
public last week.
The EU rule, which requires airlines to
surrender carbon permits for the emissions they produce during all flights
taking off or landing in the 27-country bloc, has come under fire by various
non-EU governments, which argue that Brussels is exceeding its legal
jurisdiction by charging for aviation emissions over an entire flight, rather
than just those in EU airspace.
The growing opposition to the measure resulted in
over 20 countries agreeing last February on a basket of possible. The joint
declaration included
measures ranging from launching dispute proceedings at the International Civil
Aviation Organization (ICAO) to banning airlines from complying with the EU
ETS.
India and China have already launched a boycott of
the scheme, with New Delhi formally forbidding its airlines from complying with
the Brussels plan earlier today, after having asked its airlines last month not
to provide emissions data to EU regulators. For its part, Beijing has banned
its airlines from participating in the ETS without government approval.
China has also allegedly halted the purchase of
US$14 billion worth of orders from European airplane manufacturer Airbus, a
claim that has been contested by Chinese officials.
Air France, Airbus, and engine-maker Safran have argued that a global trade war over aviation
could destroy 2,000 jobs - a prospect that the French prime minister referred
to in his letter.
Carbon market struggling
Meanwhile, the carbon market that underpins the
entire ETS scheme continues to struggle, with the market price of carbon
permits dropping to a record low of €6 per tonne last week. Permit prices have
plummeted by two-thirds when compared with prices from just a year ago.
The crash in prices has some traders and analysts
worried over a potential loss of interest in the EU carbon market, which
estimates value at over US$100 billion last year. The falling prices have
largely been blamed on oversupply of permits, along with the overall slowing of
the European economy.
In light of these fears, EU environment ministers
are scheduled to meet on 19 April to discuss ways to improve the ETS, including
the possibility of setting aside carbon permits for the 2013-2020 trading
period.