GERMAN POSITION ON EU EMISSIONS TRADING AND

UNCLAS SECTION 01 OF 02 BERLIN 003519 SIPDIS SENSITIVE SIPDIS MONTREAL FOR ICAO E.O. 12958: N/A TAGS: EAIR ECON SENV GM SUBJECT: GERMAN POSITION ON EU EMISSIONS TRADING AND INTERNATIONAL AVIATION REF: STATE 190254 TEXT IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. ¶1. (SBU) SUMMARY. Per action request in reftel, post has discussed points with a broad range of German officials in the Foreign Office, Ministry of Environment, Economic Ministry, Transportation Ministry, and the Bundestag. All contacts noted the Environment Ministry has the lead on this issue within the German government and is its most active supporter. That said, the German government has not taken a position on the inclusion of non-EU carriers in the emissions trading scheme and officials argue they needed to see what emerged from the commission before they could react officially. Foreign Ministry officials also came across as positively inclined towards including non-EU countries in the proposed EU emissions trading scheme. Chancellery officials stated they and the Economic Ministry are the most opposed. Lufthansa opposes including civil aircraft in the ETS unless it is on a global basis and its chairman has publicly noted there are other, more effective means to reduce greenhouse gas emissions, e.g., new aircraft technology, changes to flight plans, and especially changes to the European air traffic control system. Contacts emphasized the formal unveiling of the EU's proposal on aircraft emissions December 20 will signify only the beginning of the discussions on this issue. German officials, as well as key parliamentarians, do not expected it to be adopted immediately and all are amenable to dealing with this issue within the framework of the ICAO. END SUMMARY. ¶2. (SBU) On December 2, Econoffs met with Dr. Michael Witter, MFA Deputy Director General for International Economics and Hans-Peter Hofmann, MFA Office Director for Environmental Affairs. Hofmann confirmed the issue is a priority for Germany, adding that within the government, the Environment Ministry has the lead on this proposal. Hofmann and Witter expressed strong support for the idea of including airlines in emissions trading, showing a position more in line with the Environment Ministry than with other parts of the German government. EMIN also raised the issue with Chancellery Deputy Director General for International Economic and Financial Issues Johannes Kindler on November ¶30. He said the German government is divided on the idea with the Chancellery and Economic Ministry among the strongest opponents and the Environment Ministry very much in favor of the measure. Economics Minister Glos made public comments on December 4 questioning the economic sense of including only European airplane emissions into the European Emissions Trading Scheme. ¶3. (SBU) Econoff conveyed reftel points December 5 to Ministry of Environment Office Director for European Union Affairs Norbert Gorissen, Office Director for Cooperation with OECD Member States Bert-Axel Szelinski, Meike Soeker from the Office of Legal Issues and Dirk Weinreich from the Environment and Energy Division. The officials expressed strong support for including airlines in emissions trading. Gorissen asserted the concept fits with the Chancellor's interest in advancing efforts to combat climate change during the German EU Presidency. He said there has been rapid growth in airline emissions in recent years and it is time to act. He also noted other EU members share this desire to expand the emissions trading system and Germany has an obligation as EU president to advance the priorities of member states. It would be remiss of Germany, he continued, not to address the issue during its EU Presidency. ¶4. (SBU) Responding to the suggestion that airline emissions be handled within ICAO, Weinreich and Soeker said Germany has been trying to promote airline emissions trading within the ICAO Committee on Aviation Environmental Protection but claimed there has been little progress. They said they would welcome addressing the issue in ICAO and asked for U.S. suggestions on how to advance the discussion. Ministry of Environment officials agreed they did not want to see U.S.-EU disagreement on airline emissions trading "boil over" and suggested more bilateral discussion on ways to reduce emissions. They noted they would not see the EU Commission proposal until December 20 and could not yet say how the plan would handle non-EU airlines. While emphasizing this topic is important to Germany, they also observed it is unlikely a final ruling would be reached during the 2007 German Presidency. Environment Ministry officials indicated the priority for Germany is introducing the issue during its Presidency to signal its seriousness in addressing climate change. ¶5. (SBU) On December 12, EMIN met with Klaus Lippold (CDU), Chairman of the Transportation Committee of the Bundestag. Lippold said he expects the EU to present plans for the inclusion of aircraft emissions in the European emissions trading regime on December 20. However, he stressed this would only be the beginning of deliberations and would by no means be the last word. Lippold predicts the EU decision making process will take two to three years. He does not expect the EU to bypass ongoing discussions in the ICAO on this issue. While Lippold does not personally support this proposal, he sees the establishment of an EU emissions trading system for aircraft in some form as "unstoppable;" the EU Parliament, Commission and Council of Ministers have all backed it too strongly to abandon it now. Lippold supports a plan that is global in scope, not unilateral, and is as efficient and unbureaucratic as possible. Lippold concluded by saying the main goal of this proposal is to reduce CO2 emissions; if other means are found, e.g., through the use of alternative, cleaner fuels, this proposal may prove moot. ¶6. (U) Lufthansa CEO, Wolfgang Mayrhuber, spoke publicly on the issue November 30, saying he supports using more effective means to reduce emissions from aircraft. Mayrhuber argues improving aircraft infrastructure, utilizing new technology, and unifying air traffic control operations in Europe would cut emissions by as much as 8 - 12 percent. Mayrhuber also says he would only support inclusion of air traffic emissions in an emissions trading scheme if it were truly global and supports using the ICAO to resolve this issue. TIMKEN JR