By Valerie Volcovici and Joshua Schneyer
MONTREAL/NEW YORK (Reuters) - Europe cannot accept a global deal to curb the growth of aviation emissions through a markets-based scheme starting in 2020 unless it allows for regional measures to operate in the interim, its top climate change official said Friday.
Connie Hedegaard, European Commissioner for Climate Action, said because it would take at least seven years to get a global market scheme in place, measures like the EU's emissions trading scheme are needed in the meantime.
Hedegaard spoke as delegates from more than 190 countries worked furiously at the United Nations International Civil Aviation Organization's (ICAO) assembly in Montreal to hash out an agreement on ways to reduce emissions from the global airline industry. A deal could be near completion by Wednesday.
"Now we have the chance to agree that yes, these airline emissions should be regulated. But this scheme is not entering into force tomorrow," Hedegaard told Reuters in an interview in New York. "We should still have our own regional scheme until then."
The question of whether foreign carriers need to comply with these measures ahead of a global deal is the most contentious issue at ICAO's triennial assembly.
Brussels last November postponed a law that would have required all airlines to pay for their emissions for the entirety of their flights into and out of European airports.
The so-called stop the clock effort was meant to give ICAO time to strike a global deal and avert a trade war from trading partners such as China, India and the United States, who said the measure infringed upon on their sovereignty.
As a compromise, the commission agreed that if ICAO reaches a deal, it would apply its law to foreign airlines' emissions within European airspace.
"While we're doing this, of course Europe will have to regulate airline emissions. Those who can afford to fly long distances should cover the cost of their emissions," Hedegaard said.
The gathering heads into its second week on Monday trying to resolve that and other contested items contained in an emissions proposal agreed to by ICAO's 36-member governing council earlier this month.
The European Union is under pressure to preserve its right to regulate part of the emissions from flights into and out of the continent. It faces a fresh threat of legal action by European airlines and pressure from European lawmakers, who criticized the commission for already conceding too much.
The European Low Fares Airlines Association is closely following the ICAO talks. It has filed a lawsuit challenging the European Commission's stopping of the clock and claims it is disproportionately penalized because the EU law still applies to European airlines.
As Day 4 of the ICAO negotiations wound up, the assembly's president, Michel Wachenheim, said he was determined to steer through a final deal on aviation emissions given the high degree of consensus.
He told delegates at a session focused on the emissions issue that he will personally lead negotiations with groups of countries to ensure compromise is achieved.
"What I am looking for is to improve the existing text so I will work with delegations in this spirit," he said, adding that the ICAO council had already done most of the heavy lifting to move countries toward a deal.
Wachenheim, France's permanent representative at ICAO, said that he will obtain feedback from these consultations for a revised proposal to be introduced on Wednesday.
Several countries, including India and Vietnam, said in floor speeches on Thursday that interim regulatory schemes should not be allowed and all references to the schemes should be excised from ICAO's text.
India's negotiator warned the schemes would lead to retaliatory actions and create a patchwork of regulation that is disruptive to the global aviation industry.
The United States and New Zealand were among countries that supported the broader contours of the resolution but wanted to revise language that would create exemptions for more than 160 countries for complying with interim schemes.
Countries as diverse as Cameroon and Singapore said the deal should require more study about the impact of possible market measures on the aviation sectors of various countries.
Some environmental groups, meanwhile, are concerned that the final deal will be diluted and create a weak foundation for the next ICAO assembly in 2016.
"It is clear that what is currently on the table is not a strong global deal and we fear that a lot could happen in the next three years to unravel what can only be a fragile consensus," said Aoife O'Leary, a lawyer with environmental group Transport & Environment.
Hedegaard said that after nearly two decades of discussing the topic, ICAO is closer than ever to a deal and this is the time to seal it.
"Now is the time to get the job done," she said.
Global airline revenue is forecast at $708 billion this year, rising to $743 billion in 2014, according to the International Air Transport Association, the trade association for the world's airlines.
(Additional reporting by Barbara Lewis in Brussels; editing by Ros Krasny and Matthew Lewis)