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Twenty-first Report of Session 2019–21 Contents

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4Aviation and climate change: COVID-19 and UK/EU future relationship negotiations9

These EU documents are politically important because: they give formal effect to the UK’s participation in the ‘Pilot Phase’ of CORSIA (the international aviation community’s effort to reduce greenhouse gas emissions by way of a Carbon offsetting scheme); they change the ‘baseline’ year for the scheme; meaning that emissions reduction targets will be calculated against data from 2019—not 2020—to take account of the significant drop in traffic—and thus emissions—consequent on the COVID-19 pandemic; and they are related to the EU’s own scheme—the EU ‘ETS’—and raise questions regarding the UK’s future ‘linking’ to it—or participation in other schemes—at the end of the transition period. Action Draw this Report chapter to the attention of the Transport Committee, the Environmental Audit Committee, the International Trade Committee and the Environment, Food and Rural Affairs Committee.

Background

4.1The first document under scrutiny (41251) concerns the authorisation of the EU to vote—on the behalf of Member States—in favour of a number of minor technical changes to the operation and implementation of CORSIA. The second—41260—outlines the amendments deemed necessary to give effect to these changes in EU law.

4.2Since the Committee’s first consideration of the documents,10 both have been adopted and,11 at the 220th Session of the ICAO Council in June 2020, the EU voted in favour of the proposed changes to CORSIA.

4.3By way of background, CORSIA (the Carbon Offsetting and Reduction Scheme for International Aviation) is a Carbon reduction mechanism—agreed under the auspices of the International Civil Aviation Organization (ICAO)—that mandates flight operators on routes between participating States to offset any increase in emissions covered by the scheme above a baseline of an average of 2019 and 2020 emissions.

4.4The most significant of the changes under consideration concerns the use of data from 2019—rather than 2020—for calculating CORSIA’s ‘baseline’ year. This change was justified by ICAO as necessary to take account of the impact of COVID-19 on international aviation with air traffic dropping markedly since its onset. It is expected that for 2020, total greenhouse gas emissions from aviation will be considerably lower than for 2019. With 2020 serving as the baseline year for CORSIA, ICAO argued that, without amendment, the use of disproportionately low emissions data for CORSIA would lead to higher offsetting costs for operators.

4.5In its Fifteenth Report of Session 2019–2021, the Committee noted the Government’s support for ICAO’s planned amendment of CORSIA and highlighted its discussion of the EU’s ‘Emissions Trading Scheme’ (EU ETS).

4.6The Committee went on to explain the differences between CORSIA and EU ETS: CORSIA is a CO2 ‘offsetting’ scheme where emissions reductions that cannot be achieved in the aviation sector alone are compensated by schemes in other parts of the economy with greater reductions potential, whereas the EU’s ETS operates in a slightly different way and is known as a ‘cap-and-trade’ system.12 The UK currently participates in the EU ETS and will do so until the end of transition period (as established by the UK/EU Withdrawal Agreement). The Government has recently consulted on creating a UK ETS at the end of the transition period.13 Domestic and international systems often allow for the possibility of being connected or ‘linked’ to other schemes in order to provide for larger Carbon trading markets.

4.7The Committee subsequently requested further information from the Government on its thoughts on linking a UK ETS to the EU’s ETS after the end of the transition period and the details of any discussions that it has had with the EU in this regard.

The Government’s response

4.8Parliamentary Under Secretary of State at the Department for Transport, Kelly Tolhurst MP, wrote in response to the Committee on 21 July 2020.14

4.9The Minister’s response to the Committee’s questioning is poor and does not directly provide the information that was requested. With regard to whether the Government has had discussions with the EU on linking to the EU ETS, the Minister states only that “[negotiations] with the EU on these matters are ongoing”. As further requested, details of these discussions—if they have taken place—are not provided.

4.10The Committee also asked a number of supplementary questions relating, in particular, to whether the introduction of an interim Carbon Emissions Tax—as suggested in the event of a no trade deal Brexit—would be compatible with EU requirements for a future relationship agreement that the UK shall:

[Implement] a system of carbon pricing of at least the same scope and effectiveness of that provided by the EU Emissions Trading System.

Again, the Government does not directly answer this question and, instead, rehearses lines from its negotiating documents.15

4.11Finally, the Committee was interested to hear whether the Government had considered the possibility of linking a future UK ETS to similar systems of non-EU Member States. In light of the opening of trade negotiations with New Zealand, the Committee asked whether linking was being discussed with New Zealand. The Minister does not answer this question and makes the general statement that:

A UK ETS would have the potential to evolve in different ways, this could include linking to other emissions trading systems in the future.

Action

4.12The Committee is disappointed with the Government’s engagement on this important issue and wishes to remind the Minister of the importance of effective scrutiny for good policy-making and her role in facilitating this.

4.13This Report chapter has been drawn to the attention of the Transport Committee, the Environmental Audit Committee, the International Trade Committee and the Environment, Food and Rural Affairs Committee.

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