EU Proposes Emission Caps on Aviation, Shipping

September 28, 2009

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The European Union will likely propose that aviation and shipping should cut their carbon dioxide emissions by 10 and 20 percent, respectively, below 2005 levels over the next decade, while it faces a setback in the roll-out of carbon capture and storage plants by 2015, reports Reuters.

EU diplomats told Reuters the cuts might be linked to a tax on fuel, which would be used to generate billions of dollars of revenues to help poor countries cope with climate change — a key topic of debate among industrialized and developing countries before the Copenhagen talks in December.

A recent report by the European Commission calculated the two sectors could generate revenues as high as 25 billion euros ($36.7 billion) a year in 2020, if their emissions were capped at 30 percent below 2005 levels, according to the article.

The EU will present its proposal at a climate talks meeting in Bangkok where climate negotiators from up to 190 nations will try to drive momentum toward a deal to replace the Kyoto Protocol, according to Reuters. Aviation and shipping are not covered by Kyoto.

However, nations are split on the proposal. Britain, Ireland, France, the Netherlands, and most eastern European states have indicated support for a cut of 20 percent or more to shipping emissions, but seafaring nations including Malta, Cyprus, and Spain favor lower reductions, reports Reuters.

Contributing to the EU’s challenge, the national ship industry associations of Australia, Belgium, Norway, Sweden and the UK recently announced the industry would be best served under a cap-and-trade scheme.

In addition, France, Finland, Italy, Malta and Austria have suggested airlines get a target lower than 10 percent, reports Reuters.

In other emissions-related news, the European Union is unlikely to meet its target of rolling out full-scale carbon capture and storage (CCS) plants by 2015, primarily due to a lack of funding and financial incentives, reports Reuters.

E.ON AG told Reuters that fitting CCS to a new coal plant in southern England, expected by 2016, depended on winning a UK competition for funding, and full operation of the CCS unit would be “some time” after that. Energy executives told the news agency that a plant will take about four years to build and several additional years for a permitting process.

The plants will cost about $1 billion more to build than a traditional coal plant, but no incentives are yet in place, reports Reuters.

One EU plan is for CCS operators to be awarded about 4 billion euros ($5.89 billion) under the third trading phase of the EU emissions trading scheme (EU ETS) from 2013-2020, according to Reuters.

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