Revision of the EU Emission Trading System for Aviation

Key points: 

• The Commission's initiative amending Directive 2003/87/EC as regards aviation's contribution to the Union's economy-wide emission reduction target is a welcome step in reducing the climate impact of the aviation sector. The Committee supports the proposed amendments, but emphasises the need to maintain a level playing-field and protect social and working rights. While not the largest emitter of emissions in society or indeed in transport, aviation and all its stakeholders must play their part in helping us achieve a sustainable aviation industry. This can only be done through social dialogue and engagement with trade unions in the sector, who are a critical part of the climate transition.

• In general, we are opposed to the allocation of free allowances within the emissions trading system (ETS), unless for the purposes of ensuring fair competition. In the case of intra-EEA flights, there is less risk to a level playing-field; however, we must remain vigilant to carbon leakage, particularly in leisure and long-haul traffic. Therefore, we would support maintaining the proposed date of 2027 for full removal of free allowances and, in the meantime, adjust the free allowance allocations to focus on fair competition. By doing this, we can implement the ETS, improve the uptake of sustainable aviation fuels (SAFs) and decrease the level of free allowances, while avoiding distorting competition within the market.

• It is imperative that the proposal acts to protect the level playing-field in order to support companies that provide decent work and social standards. It is also important to avoid long-term negative effects on working conditions due to unfair competition from companies not operating under the ETS. As such, we would recommend launching a "social impact assessment" that considers the link between the application of the ETS, fair competition, and the potential social damage of carbon leakage. Furthermore, we propose two mid-term assessments, which would analyse the social, environmental and economic impact of the amended ETS. This should take place two years and four years after the amended ETS enters into force and should provide all stakeholders with an opportunity to review the application of the ETS and the aims of the programme. These assessments will also provide an opportunity to check the recovery of the industry against the aims of the ETS.

• The majority of extra-EEA traffic runs through central hubs either within or outside the EEA. Currently, most passengers have a number of options for their extra-EEA flight through both internal and external hubs. However, with the increased cost of the ETS, there is a significant risk that EEA operators will be undercut by cheaper operations based in hubs outside the EEA. To counteract this, the allocation of free ETS allowances must be replaced by a targeted mechanism against competitive disadvantages in order to protect European airlines and European hubs.

• The EU must promote a more ambitious, uniform global regulation on carbon pricing, and must have a mandate to negotiate for this at global level. In addition to its global mandate, we propose the application of one or both of these mechanisms in order to ensure fair and sustainable implementation of the ETS and support a broader application base in the short term: a) introducing a carbon border adjustment mechanism; b) replacing the free allocation system with targeted protection against unfair competition.

• The ETS should support a move towards more sustainable modes of transport, including within the aviation sector, and should therefore promote a reduction in the use of business aviation. The ETS should encourage the use of sustainable mass transport and therefore force business jet users to pay higher charges.

• ETS revenues should be invested in development projects that will further reduce the environmental impact of aviation, by supporting a reduction in cost and greater uptake of SAFs. It should also support the transition of airports, fuelers and ground handlers to new regulations being imposed on SAF usage in European airports through the ReFuelEU proposal. Revenues must also support a just transition for workers in the aviation industry who have been negatively affected by climate change. To implement this, an aviation social fund should be created that will allow for the training and transition of aviation workers. Such a fund could be managed by the European Commission, with the support of both employers and trade unions.

• Through the ETS, the proposal should encourage operators to develop inter-modal transport networks in their major hubs in order to expand to a greater network of destinations, while also reducing unnecessary ultra-short-haul flights. This could be done by increasing the level of free allowances in their place elsewhere in the airline's network to areas that do not have convenient rail connections.