UN Aviation Agency’s Decision Could Undercut EU Climate Progress

As EU Environment Ministers meet today in Brussels to debate the EU’s long-term climate strategy, the powerful Council of the International Civil Aviation Organization is in Montreal, Canada finalizing carbon trading rules that could undercut progress in Europe’s flagship climate program, the EU Emissions Trading System. A decision from the ICAO Council, which includes representatives from the transport ministries of the UK, France, Germany, Spain and Sweden, could come as early as tomorrow. 
 
“What ICAO’s Council decides in Montreal – with the participation of EU transport ministries – could set back climate progress for the EU Emissions Trading System,” said Environmental Defense Fund’s International Counsel Annie Petsonk. “The EU’s decision to include aviation in its Emissions Trading System was the impetus for ICAO’s global Carbon Offsetting and Reduction Scheme for International Aviation. If CORSIA adopts weak rules and allows in bad offsets, the EU will come under pressure to accept these decisions. That would be terrible for our climate and for European leadership.”
 
Environment Ministers and the EU Parliament amended the EU ETS in 2009 to strictly limit the use of carbon credits from the Kyoto Protocol and decided in 2015 to ban the use of international credits altogether after 2020. Now weak rules in CORSIA could provide access for such credits into the EU ETS for aircraft operators if EU policy makers come under pressure to adopt policy in line with ICAO decisions.

The risk that these credits could come back into the EU ETS for aircraft operators will be heightened if ICAO’s Council allows a newly influential ICAO technical advisory body, or TAB, to operate without transparency. ICAO’s Council is convening this board to review multi-billion-dollar offset programme applications to see if they meet CORSIA’s environmental integrity rules. There is a high risk that the TAB will operate with undisclosed membership, under ambiguous guidelines, resulting in confidential recommendations. This would be a huge departure from standard EU and UN governance and transparency norms.  

“The European members of the Council have a responsibility to ensure the technical advisory body operates transparently,” said Baroness Bryony Worthington, Executive Director of Environmental Defense Fund Europe. “To do so they will have to push back strongly against forces that would shroud the process in secrecy.”
 
While ETS allowances have made a recent and unprecedented recovery – trading north of €20/tonne – because EU lawmakers adopted policies in 2015 to shore up its cornerstone climate policy, environmentally dubious credits left over from the Kyoto system don’t currently have any real market and trade below €0.50.  
 
The criteria to be agreed by the ICAO council will likely include language which precludes double counting – where an emission reduction would be counted by both the airline and the country where the reduction took place. EDF welcomes a ban on double counting, but warns that double counting can only be avoided with robust guidelines which include the necessary level of engagement and accounting by the country in which the emission reductions underlying the offset takes place.  
 
“It’s not in anyone’s interests to allow double counting into CORSIA, but if detailed rules including host party engagement and holistic accounting aren’t clearly laid out in public  guidelines then an in-principle ban isn’t good enough. European members of the ICAO Council must ensure ICAO implements a double counting ban that works” said Baroness Worthington.   

As they meet today to discuss long-term climate strategy, EU governments must not ignore the elephant in the room, namely this week’s ICAO discussions. They must maintain the integrity of CORSIA and ensure it delivers its promised emissions reductions. They can do so by:
 

1. Establishing strong transparency, with robust accounting rules that prevent double-counting between CORSIA and the Paris system
2. Excluding low-quality and inferior credits that don’t represent real climate action
3. Excluding poor-quality fuels that are produced in a way that damages the environment
4. Ensuring that CORSIA operates in the sunshine, and not through secret backroom deals