Eu-ETS Versus CORSIA - A Critical Assessment of Two Approaches to Limit Aviation's CO2 Emissions by Market-based Measures



Eu-ETS Versus CORSIA - A Critical Assessment of Two Approaches to Limit Aviation's CO2 Emissions by Market-based Measures

Authors

Janina Scheelhaase, German Aerospace Center (DLR), Sven Maertens, German Aerospace Center (DLR), Wolfgang Grimme, German Aerospace Center (DLR)

Description

For limiting aviation’s CO2 emissions, two important trading schemes for aviation are in force, resp. will be in force in the future: the EU ETS for aviation and CORSIA. This paper analyzes and compares both schemes.

Abstract

The air transport sector contributes to climate change by both long-term CO2 and short-term non-CO2 effects such as ozone and methane changes from NOx emissions or contrail cirrus. To limit aviation’s CO2 emissions, two important trading schemes for aviation are in force, resp. will be in force in the future: the EU ETS for aviation and CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) which has been agreed on the level of the International Civil Aviation Organization ICAO recently.

Since 2012, international aviation has been included in the EU ETS (EU Directive 2009/29 EC). From this year up to (at least) 2020, all flights starting from or landing at European airports are subject to the EU ETS, apart from a few exemptions. In light of strong international opposition against the EU ETS for aviation and ongoing negotiations on ICAO level, the EU decided to limit the coverage of the EU ETS to emissions from all flights within the European Economic Area (EEA) for the period 2013 to 2016 (so-called “Stop-the-Clock” regulation). The EEA covers the EU Member States plus Norway, Iceland and Liechtenstein.

In October 2016, CORSIA has been agreed at the 39th ICAO Assembly after decades of difficult international negotiations (Assembly Resolution A39-3). CORSIA aims at supporting ICAO’s ‘Carbon Neutral Growth (CNG)’ goal. The scheme will be in force from 2020 onwards with an increasing number of participating states over time. In the medium term, roughly 90 per cent of international air traffic shall be included.

The authors analyze and compare the environmental as well as the competitive impacts of both schemes. Therefore, a DLR-developed air traffic and emissions simulation model is employed. This model grounds on empirical flight plan and emission data. It has been enhanced by a new module simulating the future development of the worldwide fleet and resulting improvements in fuel efficiency. On the basis of the modelling results, the associated competitive impacts are estimated and recommendations from an environmental economics and politics point of view are provided.

Modelling results indicate that the EU ETS for aviation, even under the current ‘Stop-the-Clock’ regime, will lead to a larger coverage of CO2 emissions than CORSIA. The EU ETS for aviation regulated roughly 70 million tons CO2 in 2014 which was about 9 per cent of aviation’s global CO2 emissions. This share could rise up to 30% if the EU ETS as intended in 2012 was reintroduced.

Although the CORSIA coverage of 90 per cent of global air traffic looks quite huge at first sight, only those CO2 emissions that stem from air traffic post-2020 will have to be offset. This will lead to the relatively low environmental effectiveness of the scheme. Also, a great number of exceptions will be applied, leading to competitive distortions between certain groups of airlines.

For the EU-ETS, competitive distortions between airlines operating on international routes also seem likely. A level playing field can only be achieved by strictly minimizing any kind of exceptions from the EU ETS for aviation.

Publisher

Association for European Transport