PURPOSE: to derogate temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading (EU ETS) within the Community.

LEGISLATIVE ACT: Decision No 377/2013/EU of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community.

CONTENT: in order to facilitate the objectives aiming to reduce aviation emissions and to provide momentum in this area, it is desirable to defer the enforcement of requirements arising prior to the 38th session of the ICAO Assembly and relating to flights to and from aerodromes in countries outside the Union that are not members of the European Free Trade Association (EFTA), dependencies and territories of States in the European Economic Area (EEA) or countries having signed a Treaty of Accession with the Union.

By way of derogation from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community :

Member States shall take no action against aircraft operators in respect of the requirements set out in Directive 2003/87/EC for the calendar years 2010, 2011 and 2012 in respect of activity to and from the abovementioned aerodromes;

the temporary derogation shall apply exclusively to aircraft operators who have not been issued free allowances for such activity in respect of 2012 or, if they have been issued such allowances, have returned, by the thirtieth day following the entry into force of this Decision, to Member States for cancellation a number of 2012 aviation allowances corresponding to the share of verified tonne-kilometres of such activity in the reference year 2010.

Member States shall cancel all 2012 aviation allowances that have either not been issued or, if issued, have been returned to them, in respect of flights to and from the aerodromes concerned. Member States shall auction a reduced number of 2012 aviation allowances. That reduction shall be proportional to the lower number of total aviation allowances in circulation. To the extent that the reduced number of those allowances has not been auctioned prior to 1 May 2013, Member States shall adjust accordingly the number of aviation allowances to be auctioned in 2013.

This derogation is provided by the Union to facilitate an agreement at the 38th session of the ICAO Assembly on a realistic timetable for the development of a global market based measures (MBM) beyond the 38th session of the ICAO Assembly and on a framework for facilitating the comprehensive application of national and regional MBMs to international aviation, pending the application of the global MBM.

The Commission shall regularly inform the European Parliament and the Council on the progress of ICAO negotiations and shall provide a full report to them on the results achieved at the 38th session of the ICAO Assembly.

ENTRY INTO FORCE: 25/04/2013. The Decision shall apply from 24/07/2013.

The European Parliament adopted by 577 votes to 114 with 21 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community.

Parliament adopted its position in first reading following the ordinary legislative procedure. It amended the Commission proposal as follows:

Derogation from Article 16 of Directive 2003/87/EC (penalties applicable to infringements of the national provisions adopted pursuant to the Directive): the text provides that to give further momentum to the shared commitment of the International Civil Aviation Organisation (ICAO) Member States to address aviation emissions at a global level, it is desirable to defer enforcement of requirements arising prior to the 2013 ICAO Assembly relating to flights to and from aerodromes outside of the Union and areas with close economic connections to the Union and that have a shared commitment to tackle climate change.

By means of its amendments, Parliament specifies the following:

·        action should not be taken against aircraft operators in respect of the requirements resulting from Directive 2003/87/EC for the reporting of verified emissions for the calendar years 2010, 2011 and 2012 and for the corresponding surrender of allowances for 2012 from flights to and from such aerodromes;

·        the derogation will only apply to aircraft operators who have not been issued free allowances for such activity in respect of 2012 or, if they have been issued such allowances, have returned, by the thirtieth day following the entry into force of this Decision, to Member States for cancellation a number of 2012 aviation allowances corresponding to the share of verified tonne-kilometres of such activity in the reference year 2010.

Cancellation and auctioning of allowances: the amended text states that Member States should cancel all 2012 aviation allowances in respect of flights to or from aerodromes referred to in the proposed decision that have either not been issued or, if issued, have been returned to them.

In respect of the cancellation, Member States shall auction a reduced number of 2012 aviation allowances. That reduction shall be proportional to the lower number of total aviation allowances in circulation. To the extent that the reduced number of those allowances has not been auctioned prior to 1 May 2013, Member States shall adjust accordingly the number of aviation allowances to be auctioned in 2013.

Market-based measures: in a new recital, it is clarified that this derogation is provided by the Union to facilitate an agreement at the 38th session of the ICAO Assembly on a realistic timetable for the development of a global MBM beyond the 38th session of the ICAO Assembly and on a framework for facilitating the comprehensive application of national and regional MBMs to international aviation, pending the application of the global MBM. On this basis, further steps could be considered. In this respect, the Commission should, when assessing the need for further action, also take into account the possible impact on intra-European air traffic with a view to avoiding any distortions of competition.

Implementation and keeping Parliament informed: the Commission will: (i) issue the guidance necessary for the implementation of this Decision; (ii) regularly inform the European Parliament and the Council on the progress of ICAO negotiations and shall provide a full report to them on the results achieved at the 38^th session of the ICAO Assembly.

The Committee on the Environment, Public Health and Food Safety adopted the report by Peter LIESE (EPP, DE) on the proposal for a decision of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community.

The parliamentary committee recommends that the European Parliament’s position adopted at first reading according to the ordinary legislative procedure should be to amend the Commission’s proposal as follows:

Derogation from Article 16 of Directive 2003/87/EC (penalties applicable to infringements of the national provisions adopted pursuant to the Directive): provisions are contained in the text to give further momentum to the shared commitment of the International Civil Aviation Organisation (ICAO) Member States to address aviation emissions at a global level, it is desirable to defer enforcement of requirements arising prior to the 2013 ICAO Assembly relating to flights to and from aerodromes outside of the Union and areas with close economic connections to the Union and that have a shared commitment to tackle climate change.

By means of their amendments, Members wish to:

• stipulate that action should not be taken against aircraft operators in respect of requirements relating to the calendar years 2010 to 2012 for reporting verified emissions and for the corresponding surrender of allowances from incoming and outgoing flights to and from such aerodromes resulting from Directive 2003/87/EC;
• clarify that the number of allowances to be returned is based on the share of verified tonne-kilometres of the relevant flight activities based on the reference year 2010;
• clarify that only aviation allowances for 2012 qualify as allowances to be returned for cancellation.

Cancellation and auctioning of allowances: according to the amended text, the Member States should cancel all 2012 aviation allowances in respect of flights to or from aerodromes referred to in the proposed decision that have either not been issued or, if issued, have been returned to them. By way of derogation from Directive 2003/87/EC, Member States shall auction a reduced number of aviation allowances in respect of 2012.

Members consider that the number of aviation allowances auctioned by the Member States should be reduced in accordance with the calculations of the Commission, resulting in 15% of the overall amount of 2012 aviation allowances in circulation.

Use of the revenues generated from the auctioning of allowances: the report calls on the Member States to use revenues generated from the auctioning of allowances for efforts to (i) tackle climate change, in particular at international level; (ii) reduce greenhouse gas emissions and adapt to the impacts of climate change in developing countries; and (iii) fund research and development for mitigation and adaptation including in particular in the field of aeronautics and air transport.

Revenues generated from auctioning shall also be used: (i) on low-emission transport; (ii) to fund contributions to the Global Energy Efficiency and Renewable Energy Fund and the Green Climate Fund under UNFCCC, and (iii) on measures to avoid deforestation.

Regular information to Parliament: the Commission shall regularly inform the European Parliament and the Member States concerning the progress of the ICAO negotiations and submit a report on the results achieved at the ICAO Assembly. If the ICAO Assembly does not achieve substantial progress on a global market-based mechanism (MBM), the European ETS will again include all international flights from and to the Union from 2013 onwards. If, however, it succeeds in setting a framework for global market-based measures, the Commission may propose further actions.

PURPOSE: to derogate temporarily from Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community with a view to facilitate progress and reinforce momentum towards the goal of the global regulation of aviation emissions.

PROPOSED ACT: Decision of the European Parliament and of the Council.

BACKGROUND: significant progress has been made in the International Civil Aviation Organisation towards the adoption at the 2013 ICAO Assembly of a framework facilitating States' application of market-based measures to emissions from international aviation, and on developing a global market-based measure.

In order to facilitate this progress and provide momentum, it is desirable to defer enforcement of requirements relating to flights to and from aerodromes outside the Union and areas with close economic connections to the Union and a shared commitment to tackle climate change arising prior to the 2013 ICAO Assembly.

IMPACT ASSESSMENT: the Commission did not undertake an impact assessment.

LEGAL BASIS: Article 192(1) of the Treaty on the Functioning of the European Union (TFEU).

CONTENT: this proposal for a Decision seeks to enhance the chances of a successful outcome of the 2013 ICAO Assembly in terms of developing a global market-based measure (MBM) and adopting a framework facilitating States' application of market-based measures to international aviation.

The Decision would "stop the clock," by temporarily deferring enforcement of the obligations of aircraft operators in respect of incoming and outgoing flights under the European Union's Emission Trading System (ETS). Action should therefore not be taken against aircraft operators in respect of requirements resulting from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community arising before 1 January 2014 as regards incoming and outgoing flights. The condition for this is that they have either not received, or have returned, 2012 free allocations granted for such activities to or from aerodromes outside the EU and closely connected areas with a shared commitment to tackle climate change. Proper monitoring, reporting and verification of emissions from such flights is welcomed, but no compliance sanctions will be applied in respect of the non-reporting of such emissions.

Directive 2003/87/EC continues to apply in full in respect of flights between aerodromes in the EU and closely connected areas with a shared commitment to tackle climate change.

To provide further momentum to the international discussions and continue EU leadership in this process, the Commission considers it is important that this proposal is agreed between the European Parliament and Council swiftly and ideally by March 2013.

BUDGETARY IMPLICATION: the proposal has no implications for the Union budget.