Explanatory Memorandum to COM(2020)194 - EU position in the ICAO, in respect of notification of voluntary participation in the Carbon Offsetting and Reduction Scheme for International Aviation from 01-01-2021

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dossier COM(2020)194 - EU position in the ICAO, in respect of notification of voluntary participation in the Carbon Offsetting and Reduction Scheme ...
source COM(2020)194 EN
date 13-05-2020


1. Subject matter of the proposal

This proposal concerns a decision establishing the position to be taken on the Union's behalf in the International Civil Aviation Organisation (ICAO) on voluntarily participation in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) from 1 January 2021, and on the option selected for calculating the aeroplane operators’ offsetting requirements during the 2021-2023 period.

2. Context of the proposal

2.1. The Chicago Convention and the Paris Agreement

The Chicago Convention (‘the Convention’) aims to regulate international air transport. It entered into force on 4 April 1947 and established the International Civil Aviation Organisation.

The Paris Agreement was adopted by the Conference of the Parties to the United Nations Framework Convention on Climate Change in December 2015, whose objective is to limit global temperature increase well below 2°C compared to pre-industrial levels, and to pursue efforts to limit temperature increase to 1.5°C. All sectors of the economy should contribute to achieving these emission reductions, including international aviation.

All EU Member States are parties to both Agreements. The EU and its Member States are Parties to the Paris Agreement and have jointly committed to reduce their greenhouse gas emissions.

2.2. The International Civil Aviation Organisation

The International Civil Aviation Organisation is a specialized agency of the United Nations. The aims and objectives of the Organization are to develop the principles and techniques of international air navigation and to foster the planning and development of international air transport.The EU is an ad-hoc observer in many ICAO bodies (Assembly and other technical bodies).

2.3. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

The International Standards and Recommended Practices (SARPs), Environmental Protection — Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) were adopted as Annex 16, Volume IV to the Chicago Convention by the ICAO Council at its 214th Session on 27 June 2018.

The monitoring, reporting and verification (MRV) requirements related to CO2 emissions from international flights under Annex 16, Volume IV apply from 1 January 2019. The CO2 offsetting requirements under Annex 16, Volume IV will apply from 1 January 2021.

Chapter 3, Paragraphs 3.1.3 and 3.2.1 and Appendix 1 (‘Administration Procedures’) to Annex 16, Volume IV, requires States to notify ICAO by 30 June 2020 of

• their decision to voluntarily participate, or to discontinue the voluntary participation

from 1 January 20211;

Paragraph 3.1.3 refers to “inclusion of the State in the ICAO document entitled ‘CORSIA States for Chapter 3 State Pairs’”. The paragraph includes a note that specifies that the document in question logs “States that have volunteered to participate during the compliance periods from 1 January 2021 to

• which option they have selected for calculating the aeroplane operators’ offsetting

requirements during the 2021-2023 period.

2.4. The EU Emissions Trading System

The aviation sector has been included in the EU’s Emissions Trading System (EU ETS) since 2012.2 The EU ETS covered emissions from flights landing in and departing from the European Economic Area (EEA), including to and from third countries. However, in order to provide momentum within the International Civil Aviation Organisation and to facilitate progress towards a global approach to tackle international aviation emissions, the Union adopted temporary derogations to limit the geographical scope to only cover intra-EEA flights, thereby excluding extra-EEA flights, pending international developments.3

The last revision of Directive 2003/87/EC, in 2017, translates the understanding, spelled out in Article 28b, that CORSIA would be taken into account by way of an amendment to the scheme governing the EU ETS, subject to an assessment of the key features of CORSIA, including in terms of participation and that this should be achieved in a manner consistent with the EU climate objective for 2030 (in accordance with the non-backsliding principle under the Paris Agreement4).

3. Position to be taken on the Union's behalf

3.1. Background

The Union is a strong supporter of ICAO’s global market-based measure for international aviation emissions, CORSIA, which contributes to tackling climate change. The Union’s support has been shown, inter-alia, by the European Parliament and Council amending the EU ETS three times in order to facilitate progress in ICAO.

While the initial objective of CORSIA is limited to compensating for the growth of emissions from 2020, it is important to support initial progress and to contribute to adequate participation in the interest of achieving its objective.

Council Decision (EU) 2016/9155 established the Union position with regard to the international instrument to be drawn up within the ICAO bodies and intended to lead to the implementation from 2020 of a single global marked-based measure for international aviation emissions.

31 December 2026”. It should also be noted that Appendix 1 requires States to notify ICAO of any

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decision to discontinue the voluntary participation by 30 June each year preceding the year where the


voluntary participation would be discontinued.

2.

Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending


Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission

allowance trading within the Community, OJ L 8, 13.1.2009, p.3.

3.

In case no amendment to the EU ETS Directive is adopted by the European Parliament and Council by


December 2023, thereafter the EU ETS for aviation would automatically revert back to its initial scope,

4.

namely covering all flights departing from airports in the EU Member States and all EFTA States and


arriving to other airports in EU/EFTA or to third countries and, if not exempted through delegated

legislation, incoming flights to airports in the EU/EFTA from third countries.

Article 3 of the Paris Agreement.

5.

Council Decision (EU) 2016/915 of 30 May 2016 on the position to be taken on behalf of the European


Union with regard to the international instrument to be drawn up within the ICAO bodies and intended

to lead to the implementation from 2020 of a single global market-based measure for international

aviation emissions, OJ L 153, 10.6.2016, p.32.

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The objective of Regulation (EU) 2017/23926 is in particular “to prepare to implement a global market-based measure from 2021”. As indicated in the Regulation, “[the] concrete operationalisation [of that measure] will require action by the ICAO Parties at domestic level.”

Article 28b of the Directive 2003/87/EC (ETS Directive)7 establishes that “within 12 months of the adoption by the ICAO of the relevant instruments, and before the global market-based measure becomes operational, the Commission shall present a report to the European Parliament and to the Council in which it shall consider ways for those instruments to be implemented in Union law through a revision of this Directive. The Commission shall, in that report, also consider the rules applicable in respect of flights within the EEA, as appropriate. It shall also examine the ambition and overall environmental integrity of the global market-based measure, including its general ambition in relation to targets under the Paris Agreement, the level of participation, its enforceability, transparency, the penalties for non-compliance, the processes for public input, the quality of offset credits, monitoring, reporting and verification of emissions, registries, accountability as well as rules on the use of biofuels.”

Council Decision (EU) 2018/20278, laid down the position to be taken on behalf of the Union within ICAO in respect of the First Edition of the SARPs on CORSIA as regards differences to be notified. In accordance with that Decision, Member States notified differences with ICAO, highlighting the differences between the EU ETS and CORSIA (being, respectively, route-based and State-based) and that the EU implementation of CORSIA would take place through a revision of the EU ETS as agreed in its last revision from 20179. The objective was to preserve the EU acquis and future policy space, as well as the EU level of climate ambition.

On 4 March 2020, the Commission adopted a proposal for a ‘European Climate Law’10 according to which the Union would be bound to an objective of climate neutrality in the Union by 2050, in pursuit of the long-term temperature goal set out in Article 2 of the Paris Agreement. The proposal is based on the conclusion that additional action needs to be taken and every sector will have to contribute as current policies are expected to only reduce greenhouse gas emissions by 60% by 2050, and thus much more remains to be done to reach climate neutrality.

Finally, the Union has on several occasions expressed a political commitment to implementing CORSIA from the start of its pilot phase. On the most recent occasion, the statement on behalf of the EU and its Member States at the 40th ICAO Assembly in 2019 served, on the one hand, to indicate that the Union would preserve its policy space and

Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021, OJ L 350, 29.12.2017, p.7.

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC, OJ L 275 25.10.2003, p. 32.

Council Decision (EU) 2018/2027 of 29 November 2018 on the position to be taken on behalf of the European Union within the International Civil Aviation Organization in respect of the First Edition of the International Standards and Recommended Practices on Environmental Protection — Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), OJ L 325, 20.12.2018, p.25. Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021, OJ L 350, 29.12.2017, p. 7. Commission Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) of 4.3.2020, COM(2020) 80.

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climate ambition with regard to implementation of CORSIA through the EU ETS and, on the other hand, to express that the Union and its Member States continued to “strongly support CORSIA” and remained “fully committed to implement it from the start of the pilot phase”. The Union has consistently recalled the need to preserve relevant EU legislation and climate ambition, consistent with the EU ETS as last revised, and reiterated in the 2018 difference filed, as well as in the EU statement delivered at the 40th ICAO Assembly. The European Parliament has since called on the Commission and the Member States to safeguard the EU’s legislative autonomy in implementing the ETS Directive.11

3.2. Proposed position

It is necessary to adopt, ahead of the deadline of 30 June 2020 set by the CORSIA SARPs, the position on the Union’s behalf to allow the Member States to submit the necessary notifications.

On the first issue - i.e. notification of any decision to voluntarily participate, or to discontinue the voluntary participation from 1 January 2021 - considering the political commitment repeatedly made by the Union, and already acknowledged by ICAO, the expected environmental and international transport benefits associated with CORSIA and the absence of any viable alternative at global level, it is proposed to notify the Member States’ voluntary participation from the start of the pilot phase on 1 January 2021. The notification would be subject to differences filed in 2018, in accordance with Council Decision (EU) 2018/2027, and any future differences and be without prejudice to the review of the EU ETS as agreed in 2017 and to the EU climate ambition as well as the Renewable Energy Directive12.

On the second issue – i.e. notification of the option selected for calculating the aeroplane operators’ offsetting requirements during the 2021-2023 period – it is proposed that the option of 2021, 2022 and 2023 emissions respectively, for each year of the pilot phase, is selected, rather than 2020 emissions for each respective year. This approach takes into account the expected environmental and international transport benefits, the need to provide incentives to operators to reduce their environmental impacts and the importance of early action, while also taking into consideration the size of potential offsetting costs for European operators and any impact on their international competitiveness., Indeed, compared to choosing the year 2020 as a reference, a reference to the years 2021, 2022 and 2023 respectively should lead to greater environmental effectiveness. This is because the emissions from international aviation are expected to be higher during 2021, 2022 and 2023 than during 2020, not least as a result of the significant impact of the COVID-19 pandemic on air traffic and emissions.

In this context, it is necessary to ensure that current and possible future differences between Union law and CORSIA be duly taken into account. The notification referred to above should therefore include a reference to the difference notified on the basis of Council Decision (EU) 2018/2027. Since that difference, insofar as still relevant, merely concerns the attribution of competence of States vis-à-vis the different operators, due to certain design differences between CORSIA and the EU ETS, the above-mentioned notification should also reserve the possibility to notify additional differences.

European Parliament resolution of 28 November 2019 on the 2019 UN Climate Change Conference in Madrid, Spain (COP 25), P9_TA(2019)0079.

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources, OJ L 328, 21.12.2018, p. 82.


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4. Consistency with other Union policies

The proposed Decision is consistent with and complements other policies of the Union, notably energy, environmental and transport policies. It recalls the link between participation in CORSIA and a revision of the EU ETS Directive by the European Parliament and the Council, as set out in Regulation 2017/2392. However, the Commission has not yet presented the report foreseen under Article 28b of the ETS Directive and, more generally, the future decision of the legislator in this area is not yet known. Therefore, this notification is to be considered as an interim step, having regard to Chapter 3, Paragraphs 3.1.3 and 3.2.1 and Appendix 1 of Annex 16, Volume IV to the Chicago Convention.

In order to ensure that this interim step be without prejudice to future policy decisions of the co-legislators, the notification must include a reference to the difference already notified in accordance with Council Decision (EU) 2018/2027 and the possibility that other additional differences be notified, as referred to above.

5. Legal basis

5.1. Procedural legal basis

5.1.1. Principles

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’

Article 218(9) TFEU applies regardless of whether the Union is a member of the body or a party to the agreement13.

5.1.2. Application to the present case

Pursuant to Chapter 3, Paragraphs 3.1.3 and Appendix 1 (‘Administration Procedures’) of Annex 16, Volume IV to the Convention, States are required to notify ICAO by 30 June 2020 of their decision to voluntarily participate, or to discontinue the voluntary participation from 1 January 2021, and of which option they have selected, in accordance with paragraph 3.2.1 of Annex 16, Volume IV, for calculating the aeroplane operators’ offsetting requirements during the 2021-2023 period.

It follows from those provisions that certain legal effects of CORSIA, adopted through a decision of the ICAO Council, a body set up by an agreement, depend on the submission of relevant notifications to ICAO, and on the terms of those notifications. Therefore, the adoption of a Union position in respect of such notifications falls within the scope of Article 218(9) TFEU.

5.2. Substantive legal basis

In accordance with Article 192(1) and 191 TFEU, the European Union shall contribute to the pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of the environment; promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.

Judgment of the Court of Justice of 7 October 2014, Germany v Council, C-399/12, ECLI:EU:C:2014:2258, paragraph 64.

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5.2.1. Principles

The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf. If the envisaged act pursues two aims or has two components and if one of those aims or components is identifiable as the main one, whereas the other is merely incidental, the decision under Article 218(9) TFEU must be founded on a single substantive legal basis, namely that required by the main or predominant aim or component.

5.2.2. Application to the present case

The main objective and content of the envisaged act relate to climate policy, in the context of international aviation.

Therefore, the substantive legal basis of the proposed decision is Article 192(1) TFEU.

5.3. Conclusion

The legal basis of the proposed decision should be Article 192(1) TFEU, in conjunction with Article 218(9) TFEU.