A39-GMBM-WP/xxxx
International Civil Aviation Organization

30/08/2016 – 7pm

WORKING PAPER

ASSEMBLY — 39TH SESSION
EXECUTIVE COMMITTEE
Agenda Item 22: Environmental Protection – International Aviation and Climate Change – Policy,
Standardization and Implementation Support
EUROPEAN POSITION ON A GLOBAL MARKET BASED MEASURE
(GMBM) SCHEME FOR INTERNATIONAL AVIATION EMISSIONS
(Presented by Slovakia on behalf of the European Union and its Member States1
and the other Member States of the European Civil Aviation Conference2)
EXECUTIVE SUMMARY
Climate change is a defining challenge of our times. All sectors of the economy, including international
aviation must contribute to achieving the Paris Agreement objectives to limit the global temperature
increase well below 2°C compared to pre-industrial levels, and make efforts to limit the increase to 1.5
degrees. In line with the ICAO Assembly Resolution A38-18, a credible, robust and effective scheme for
a Global Market Based Measure (GMBM) should be decided by the 39th Assembly as a key element of
the "basket of measures" to tackle CO2 emissions from international aviation. This paper presents the
European position on the core principles that should be respected by the GMBM, namely environmental
effectiveness, Special Circumstances and Respective Capabilities (SCRC) and non-discrimination, as
well as key elements in its design. Key design elements must be clear, credible, and agreed as a package
for the duration of the GMBM.
Action: The Assembly is invited to:
a) Adopt a credible, robust and effective Global Market Based Measure at the 39th Assembly as
a necessary measure to achieve Carbon Neutral Growth from 2020 (CNG 2020);
b) Agree on all the main key design elements of the GMBM taking into account the core
principles and key observations presented in this paper (clarity on participating routes in all different
phases of the scheme, global system, environmental effectiveness, non-discrimination between
operators, SCRC, periodic reviews to improve the effectiveness of the scheme over time, robust MRV
and high-quality emission units) and a roadmap on the remaining elements necessary for the GMBM to
start operating from 2020;
c) Take note of Europe's intention to join this scheme from the start; and
d) Request States who can do so, to declare before the end of the Assembly their commitment
to voluntarily participate in the GMBM from the beginning.
1

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden and United Kingdom.
2
Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Georgia, Iceland, Republic of Moldova, Monaco, Montenegro,
Norway, San Marino, Serbia, Switzerland, The former Yugoslav Republic of Macedonia, Turkey and Ukraine.

A39-GMBM-WP/xxxx

-2-

Strategic
Objectives:

This working paper relates to the Strategic Objective of Environmental Protection.

Financial
implications:

The activities referred to in this paper will be undertaken subject to the resources
available in the 2017-2019 Regular Programme Budget and/or from extra budgetary
contributions.

References:

Chicago Convention and its Annex 16
A38-17 and A38-18

1.

INTRODUCTION

1.1
Climate change is a defining challenge of our times. All States and sectors of the
economy have to contribute their fair share in order to avoid devastating consequences. Consistent with
the conclusions of the reports from the Intergovernmental Panel on Climate Change (IPCC), the
international community agreed in Paris to make all necessary efforts so as to limit the global temperature
increase well below 2°C compared to pre-industrial levels and to pursue efforts to further limit the
temperature increase to 1.5°C above pre-industrial levels. This can only be achieved through adequate
and urgent action by all sectors generating green-house gas emissions, including international aviation.
Following COP21, it is now for the aviation sector to contribute to achieving these objectives.
1.2
To address the climate impacts of aviation, ICAO agreed on a "basket of measures",
including technology, operational and economic measures, as well as the use of sustainable alternative
fuels. We welcome the recent approval of the first CO2 standard for aircraft by ICAO's Committee for
Aviation Environmental Protection (CAEP). But this, and the other elements of the “basket of measures”
alone will not bring about the necessary emissions reductions. Assembly Resolution A38-18 reaffirmed in
2013 the global aspirational goal of keeping international aviation emissions at 2020 levels and agreed on
the development of a Global Market-Based Measure (GMBM) to achieve this. A GMBM was recognised
as the most cost-effective tool to reduce CO2 emissions to achieve the goal, which, as demonstrated by
substantial analysis undertaken by the CAEP, cannot be met without it.
1.3
During his visit to ICAO in February 2016, the United Nations Secretary General
reminded ICAO that following COP21 "the eyes of the world are now on airlines, and on ICAO, to drive
substantial, concrete progress on reducing emissions". He urged States to agree on a market-based
mechanism to ensure Carbon Neutral Growth from 2020 (CNG 2020).
2.

BASIC PRINCIPLES FOR THE GMBM

2.1
The GMBM must make a meaningful contribution to stabilising emissions from
international aviation from 2020 onwards. Europe strongly supports the adoption of a GMBM that keeps
net CO2 emissions from international aviation at 2020 levels while allowing for sustainable growth of
international aviation.
2.2
The 39th Assembly needs to agree on a well defined scheme that clarifies from the outset
all major design elements over its entire lifetime (2021-2035) including on which States will participate
from the beginning so as to have full certainty from the start and the necessary reassurance in terms of
emissions coverage. In addition, the design of the GMBM must take into account the two basic principles
of non-discrimination between aircraft operators and the need to accommodate Special Circumstances and
Respective Capabilities (SCRC) in a balanced manner.

-3-

A39-GMBM-WP/xxxx

2.3
While Europe has some concerns with the proposed voluntary approach in the outset of
the scheme which leads to uncertainty on the scheme's climate effect, we can accept a scheme with an
initial voluntary phase as long as this initial phase is limited in time and the overall scheme can meet, over
time, the overall objective of CNG 2020.
3.

EUROPEAN POSITION ON KEY ELEMENTS OF THE
GMBM

3.1
Europe welcomes the substantial progress made on the GMBM following the mandate of
the 38th Assembly. The Council’s proposal for an Assembly Resolution builds on extensive discussions
and technical assessments and is a good basis for a global CO2 offsetting system for international aviation.
First and foremost, we underline the importance of creating a truly global system with common standards
that are agreeable to all States and will be applied consistently and in a non-discriminatory manner by all
States to ensure a level playing field for all participants.
3.2

Reaching the Global Objective

3.2.1
It is essential that the GMBM effectively delivers on its climate objective. The extensive
analysis performed by CAEP and supported by the aviation industry has demonstrated that a global
offsetting measure would achieve the common goal at an affordable cost.
3.2.2
Whilst recognising the need to address SCRC, the draft Resolution with phased
implementation and voluntary participation in the first years as well as a significant number of
exemptions excludes an important part of emissions from the coverage of the GMBM. Europe is
concerned about this gap and that it will need to be addressed over the course of the scheme to ensure that
the overall climate objective will be met and the credibility of the GMBM is not undermined.
3.2.3
Against this background, Europe considers it necessary that as many ICAO States as
possible, and in any event all major aviation States and those able to participate join on a voluntary basis
from the beginning of the scheme. Europe intends to join the scheme from the start, as long as the agreed
scheme reflects the key features mentioned in this paper. Given the urgent need to meet the temperature
goals of the Paris Agreement, we would also encourage any State that would be exempted by the
provisions of the Resolution to volunteer to participate as early as possible in the scheme. It is also very
important to have a clear understanding by the time of the 39th ICAO Assembly about the level of
participation in the overall scheme. Furthermore, a robust review clause should address the reduction of
the emissions gap over time.
3.3

Special Circumstances and Respective Capabilities

3.3.1
Europe acknowledges the differences in the economic and development situation of
States and therefore considers that SCRC, addressed in a non-discriminatory manner, will need to be
included as one of the core elements of the Assembly Resolution. The draft Resolution lives up to this
objective by including a number of measures to address differentiation.
3.3.2
Europe can support exemptions based on RTK thresholds but is concerned about the fact
that in the draft Resolution text as presented by the Council, any exemption would be granted to States for
the full duration of the scheme regardless of their changing situation over time, which risks introducing
significant market distortions if, for example, traffic patterns were to change over the course of the
scheme. As reflected in previous draft resolutions, Europe would propose to reintroduce the provision that
any State which reaches a certain level of international aviation activities in RTKs in a given year would

A39-GMBM-WP/xxxx

-4-

be included in the scheme. Europe also understands and supports the strong call from industry to base the
RTK-assessment on the principle of "departing flights" rather than on the principle of the State of registry
(AOC).
3.3.3
Support and capacity building is also an appropriate way to address SCRC and to provide
targeted help to States, especially to facilitate the efficient implementation of the GMBM. Europe already
supports an important project through ICAO (to develop State Action Plans) and agrees that more
assistance will be needed for the timely implementation of the GMBM.
3.4

Non-discrimination and equal treatment

3.4.1
An equally important core principle is non-discrimination and Europe welcomes that the
draft Resolution requires equal treatment of operators on the same route. Implementing exemptions and
phase-in provisions on a route basis is essential to guarantee equal treatment of operators flying on the
same route and ensure a level playing field amongst operators, irrespective of their nationality, in full
compliance with the Chicago Convention.
3.4.2
Equal treatment and a level playing field must also be respected by means of the
transparent governance and uniform application of the implementation rules, including on Monitoring,
Reporting and Verification (MRV) and the eligibility criteria for emission units.
3.5

Sharing the burden

3.5.1
Distributing the offset obligations fully (100%) based on the growth of the sector's
emissions is a sound, pragmatic approach which is easy to implement and avoids complicated
adjustments. Also, this approach benefits airlines growing at above average rates, and will thus help
operators from countries whose aviation sector is still developing. Therefore, Europe prefers a 100%
sectoral approach for the full period of the scheme; this being said, Europe recognises the wish of other
States to give consideration to a dynamic element during the later phases of the scheme. This should,
however, not undermine the simplicity of the scheme.
3.6

Review of the GMBM

3.6.1
Europe considers it essential that the performance and effectiveness of the GMBM are
periodically assessed and improved to ensure that it remains effective in achieving its goal over time and
that its ambition keeps pace with the overall ambition and objectives agreed in the Paris Agreement and
its future development, in particular its long-term temperature goal.
3.6.2
It is essential that the decision to adopt a GMBM at the 39th Assembly gives clarity on the
continuation of the scheme after the initial voluntary phase. Any review of the functioning of the scheme
before 2032 should not put into question the continuation of the scheme, but focus on technical and
administrative improvements of the system.
3.6.32
Reviews may also be suitable opportunities to assess the need for additional elements
such as cost safeguards. They may become relevant in the longer run, and it would be most efficient to
consider them at a time when there is a better understanding of their need, instead of fixing the provisions
prematurely at the start of the system.
3.7

Governance and implementation

-5-

A39-GMBM-WP/xxxx

3.7.1
Robust MRV rules, which are consistent with the reporting under UNFCCC as well as
transparent and sound eligibility criteria ensuring the use of high quality emissions units are two
important cornerstones of the GMBM determining its credibility and environmental effectiveness.
Transparency and accountability of the GMBM will also need to be ensured via a robust central registry.
CAEP has made important progress on the technical details of these elements and Europe underlines the
importance for CAEP - through the ICAO Council - to finalise these elements in a timely manner. Europe
reaffirms its commitment to an active expert participation in CAEP work. Europe can support an early
implementation of certain elements of the system before 2020, notably as regards MRV from 2019. This
would help to ensure a smooth start of the scheme in 2020.
3.7.2
Agreeing and implementing robust quality criteria for offsets will be necessary to ensure
the environmental effectiveness of the GMBM. Europe supports the use of UNFCCC credits which
satisfy the emissions units criteria of the scheme. This has the advantage to foster initiatives, projects,
programmes and sectoral approaches in developing countries, with the accompanying positive social and
economic benefits. The Resolution should only allow the use of emission units representing reductions
not accounted for by the host countries against their domestic climate commitments or objectives
(avoidance of double counting).
3.7.3
A roadmap on the remaining elements necessary for the GMBM to start operating from
2020 should also be agreed at the Assembly.
– END –