ICAO agrees global market-based GHG deal

OREANDA-NEWS. October 07, 2016. The UN's International Civil Aviation Organisation (ICAO) finalised a deal today on a global market-based measure (MBM) that will limit the aviation industry's greenhouse gas (GHG) emissions from 2021 onwards through the use of offsets.

Some 65 jurisdictions — including the US, China, Canada all EU countries — representing around 84pc of the global airline sector's revenue ton kilometre (RTK) metric will participate in the MBM's initial voluntary phase that starts in 2021. The offsetting scheme will become mandatory in 2027 — seven years later than originally envisaged.

ICAO secretary general Fang Liu called the deal "a historic first" for the industry, citing the fact that aviation is the first transportation sector to take a global step to limit emissions.

Around 80pc of the global aviation sector's GHG emissions above 2020 levels will be offset by the scheme in 2021-35, according to the European Commission.

The agreement contains "a strong review clause" that will ensure that the MBM can be made more robust and ambitious — in line with the Paris climate agreement's goals — on a regular basis, EU commissioner for transport, Violeta Bulc said.

Bulc described the deal as "a decisive step" towards the GHG-neutral growth of the aviation industry and expressed hope that other sectors, particularly shipping, will follow. ICAO's deal is the first global agreement to address a specific economic sector's GHG emissions.

Over the next two years, ICAO will develop the global MBM's technical rules, which crucially will determine the type of offsets that will be eligible for use in the scheme. The EU will remain vigilant that these rules live up to its expectations and is well implemented, Bulc said.

ICAO's scheme has been heavily criticised for falling far short of what is necessary to meet the UN body's own declared goal of ensuring GHG-neutral growth for the global aviation sector after 2020.

The commission has come under fire from the European Parliament for settling for a deal much weaker than the mandatory, global MBM from 2021 onwards for which the EU had lobbied.

As it stands, participation in the scheme will be voluntary until 2027, and as yet there are no eligibility criteria to ensure the environmental quality of offset credits.

The ICAO deal will determine EU policymakers' decision on the treatment of intercontinental flights under the EU emissions trading scheme (ETS) once a temporary exemption for these flights expires at the end of 2016.

Foreign flights will again be included in the EU ETS, unless the EU decides to extend the "stop-the-clock" measure. But a robust global deal agreed by the ICAO was set as a precondition for any such extension.

The commission will soon present a report to parliament and the EU council of member states on the outcome reached at ICAO, in the context of the EU ETS for aviation, Bulc said.

European airlines applauded the agreement, but pushed for the EU to re-examine its EU ETS rules in light of the new global deal. "Following the ICAO agreement, there is now an opportunity to have a fresh look at environmental regulation in the European context and to review existing measures addressing CO2 emissions from aviation," managing director of Airlines for Europe Thomas Reynaert said.

Greenpeace described the agreement as "a timid step in the right direction," adding that the aviation industry was giving itself even more time to do very little. "Aside from only covering just around half of aviation's climate impact, it allows this industry to increase its CO2 emissions even more by shrinking the budget available to other vital sectors of the economy like power, heavy industry or surface transport," the non-governmental organisation (NGO) said.

International aviation is responsible for around 2pc of global GHG emissions, which according to the World Wildlife Fund is more than the UK's total emissions.

The MBM will be endorsed by the full ICAO assembly tomorrow, when its two-week biennial meeting in Montreal, Canada concludes.