International opposition risks EU ETS success and European airline competitiveness, says AEA and Virgin chief

International opposition risks EU ETS success and European airline competitiveness, says AEA and Virgin chief | Steve Ridgway

Steve Ridgway, CEO of Virgin Atlantic and Chairman of AEA

Mon 19 Sept 2011 – Legal challenges, threatened trade wars and other implementation difficulties are risking the success of aviation’s inclusion in the EU ETS, claimed Steve Ridgway, Virgin Atlantic CEO and Chairman of the Association of European Airlines (AEA), at a European Aviation Club speech in Brussels. He said Virgin had lobbied consistently for an environmentally effective and economically efficient EU ETS but airline concerns over the scheme must now be taken seriously by the Commission and EU states. Until 2020, he estimated the EU ETS will cost European airlines €3.1 billion ($4.2bn) annually, of which €1.1 billion ($1.5bn) will go to the treasuries of European governments. Ridgway called for an international agreement on deadlines for progress towards a global CO2 sectoral solution.


Contrary to other transport sectors, the airline ETS had become a debate about fiscal revenues and trade issues, he said. “We need to bring the discussion back to where it belongs, namely on how to achieve international consensus on the best manner for aviation to play its part in global climate change targets.”


He said a resolution must be found where the scheme will not be changed or challenged, and delivered on its environmental ambitions. “Getting the EU ETS right will deliver benefits for the climate, the consumers and the carriers by improving planning stability, reducing costs and securing growth,” he added. “In order to do this, the AEA is committed to working with the Commission to explore solutions.”


The industry had been lobbying for years over a global agreement on aviation greenhouse gas emissions, he recalled, “but states have so far not been able to reach their objective: a global scheme. States are failing to meet their environmental commitments, not the industry.”


He said airlines wanted to see a new CO2 standard adopted by aircraft manufacturers adopted without delay, noting last week’s meeting in Beijing of ICAO’s Committee on Environmental Protection (CAEP) to agree on more stringent noise and emissions standards. CAEP members have so far been unable to agree on a suitable metric for CO2 efficiency.


Preoccupation with the salvation of the Eurozone and short-term crisis management had shifted attention to austerity measures at the expense of infrastructure investments such as the Single European Sky, he said, calling for adherence to the project’s deadlines.


“The Single Sky Package 2 is the single biggest and most important environmental protection programme,” he said. “It will increase cost efficiency, it will reduce CO2 emissions by 12 million tonnes, it will reduce delays, and it will impact technology on board and on the ground.”


Ridgway said revenues must be generated to invest into research and development, but in comparison with its international rivals, Europe’s airlines were over-taxed and over-regulated. He pointed out the negative effects UK and German aviation taxes were having on market growth, with the UK government last month revising down its growth forecasts for the air transport sector, at a cost of £1.7 billion ($2.7bn) to the UK economy.


“You would normally expect that in view of the important role aviation plays and the support that major exporters normally receive, regulators would support us and be on our side. And in many parts of the world they are,” he said. “Have we got the same situation in Europe? No, I don’t think we do.”




Full text of Steve Ridgway’s speech (pdf)




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