Trade War Averted? EU Aviation ETS Set Aside (pro tem)

The EU has bowed (temporarily at least) to international threats to retaliate with a trade war over the EU's unilaterateral attempt to impose its emissions carbon trading scheme (ETS) globally.  The EU intended to impose the ETS on on international airlines operating flights to and from non-EU countries at an estimated cost to aviation of 1.4 Bn Euros annually.  The Commissioner has now "stopped the clock" for one year accepting that the ICAO are working on a global version of the ETS.

Given the EU Commissioner for Climate Action Connie Hedegaard's firm resolve originally to impose this unilateral legislation, this is an (albeit temporary) u-turn. What was so incredible about the EU's stance was that the ICAO has been promoting this international solution to world aviation's carbon emissions for sometime.

 My personal view is that the EU Commissioner appears to have a somewhat evangelical attitude to the climate stemming from her long involvement in environmental campaigning in her native Denmark. Whilst she is clearly committed to addressing climate change issues, it was somewhat naieve of her to think that she could impose EU legislation internationally.   At the beginning of 2012 she was absolutely determined to go ahead with the ETS in 2013 despite international opposition from the US, Russia, China, India and Saudi Arabia.  These and other countries have made it very clear they will not submit to her dictat.  Meantime they have banned their airlines from co-operating with the EU and threatened trade retaliations.

Its clear from her move that the Eurozone's present economic problems have injected a large dose of realism into the Commissioner's thinking.  This is not surprising given the threat by China to cancel its aircaft purchases with Airbus and sabre rattling by the other major economic powers.  Why risk a trade war when there has always been an internationally supported global emissions trading scheme for aviation? 

Aviation and airlines are in an international business.  It is unfortunate therfore that the Commissioner has only stopped the clock in respect of international flights in and out of the EU.  All internal flights will still be subject to the EU ETS legislation.  This will raise the odd situation that flights into EU countries from any Non-EU European country will not be required to comply with the 2013 deadline.   Unsurprisingly given the cost implications of the ETS for airlines, calls for an across the board delay are being made to level the playing field for all airlines using EU airports, at least until the ICAO have been given a chance to ratify a global solution...