Climate Change Mitigation Meets Air Transportation: Aviation Integrated into Chinese Emissions Trading Scheme

April 2016 - The aviation sector has grown apace in the past 50 years, and forecasts say this trend will continue. The big aircraft manufacturers expect the number of aircraft in operation to double between 2015 and 2034. This growth is driven by market developments in both emerging economies and developing countries due to the drop in the cost of air travel and air transport. Given its exceptionally high emission reduction potential, Asia stands out from the crowd.

To ensure that the aviation sector also contributes to efforts to mitigate climate change, the Chinese government has announced that in addition to all other emission-intensive industries, aviation will also be integrated into the national emissions trading scheme (ETS) scheduled to enter into force in 2017. In response to the announcement, and on behalf of the Federal German Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), AHK Greater China Beijing invited both industry representatives and environmental experts to a network meeting on April 6. In presentations before the 30-strong audience, two experts explained the aviation sector’s emission reduction potential and addressed its integration into the Chinese ETS.

The first speaker, Robert Early from MotionECO, gave a summary of historical developments in the aviation sector and outlined current policy trends. Under the auspices of the United Nations International Civil Aviation Organisation (ICAO), member countries have agreed to halt growth in net CO₂ emissions from aviation with effect from 2020. This target is to be achieved both by developing efficiency standards and by using a global market-based mechanism which allows certified emission reductions from climate change mitigation activities conducted on the ground to be used to offset emissions that exceed the aviation target.

The second speaker, Dr. Zhou Jian from the Institute of Energy, Environment and Economy at Tsinghua University, gave a presentation on the status of current research and the findings of analyses conducted on integrating aviation into the national ETS. China reduced its CO₂ intensity in relation to GDP by 33.8 percent between 2005 and 2013. It now aims to magnify the reduction relative to 2005 to 45 percent by 2020. However, in relation to GDP, China’s carbon dioxide emissions are still more than twice the global average, thus offering tremendous further scope for reduction. But far greater effort is needed if China is to achieve its long-term target. Reform of the market mechanisms and the introduction of a national ETS which includes the aviation sector in 2017 are thus key components of China’s climate change mitigation strategy.

CO₂ emissions in the Chinese aviation sector are to be reduced by seven percent in air transport and 15 percent at airports between 2015 and 2020. The big challenge here is to select an appropriate emission certificate allocation system. When it comes to effectively integrating the aviation sector into the ETS, Dr. Zhou sees further need for research due to a lack of reliable data. He also called for research to develop demand for certificates from various actors along with suitable accounting methodologies for use in certificate allocation.

In the ensuing discussion, it became clear that not all issues concerning integration of the aviation sector into the Chinese ETS have been sufficiently investigated. One topic that gave rise to particularly heated debate was the climate change mitigation contribution from the use of biofuels in aviation. It was felt that further research was needed, particularly regarding the quality of biofuels, and that pilot projects could be used to gain much-needed experience in practice.