Political deal on aviation's inclusion into EU ETS fails to satisfy either airlines or environmentalists

Political deal on aviation's inclusion into EU ETS fails to satisfy either airlines or environmentalists | T&E, AEA, IATA, ATA, Slovenia, Janez Podobnik, Bisignani, Vieira, Schulte-Strathaus, EU ETS

President of the EU Environment Council and Slovenian Environment Minister, Janez Podobnik, who brokered the EU ETS deal
Wed 2 July 2008 – Last week’s compromise agreement between the European Council and European Parliament on the key outstanding issues concerning the inclusion of aviation into the EU Emissions Trading Scheme (ETS) has met with disapproval from industry associations representing both European and international airlines. A European transport environment NGO says the deal will fail in delivering real emission cuts.
The US has also warned that the forced inclusion of airlines from outside the European Union was likely to contravene the Chicago Convention, the international treaty governing civil aviation. The International Herald Tribune quoted a spokesman from the US Mission to the EU in Brussels as saying: “The mandatory application of the EU ETS to US airlines and airlines of other non-European countries is, we think, both contrary to international law and ultimately unworkable.”
However, the Association of European Airlines (AEA) fears the move is more likely to disadvantage European airlines. “It contains restrictive and punitive elements which will find no support in the rest of the world, although non-European airlines will be pleased to see this burden fall on the shoulders of their European competitors,” commented AEA Secretary General, Ulrich Schulte-Strathaus. “The effect of this regulatory compromise will be to shift market share and greenhouse gas emissions from European carriers to their non-European rivals.”
The AEA, which represents 33 European carriers, believes the move would have “grave implications” for its members without any environmental benefits and was “hasty and ill-considered” given that the process of incorporating aviation into the ETS had been evolving since 2005 – “a somewhat bizarre situation”, said Schulte-Strathaus.
It had solved a political dilemma, he said, “but by pulling figures from a hat – such as an arbitrary 15% of permits to be purchased through auctioning – without any assessment of how they will affect the air transport system, the travelling public or the environment, they have opened a Pandora’s Box of unintended and unwelcome consequences for employment, services to regions and Europe’s international credibility.
“The European airline industry will see profits plummet this year – 2009 may well be a year of losses for European airlines. Adding a cumbersome and punitive European administrative monster to sky-high fuel prices is not the way to resolve environmental issues, indeed it will reduce our ability to continue to invest in more efficient aircraft.”
The AEA also called on EU Member States to rethink their approaches to “proliferating ‘environmental’ taxes and charges”.  Said Schulte-Strathaus: “In the context of emissions trading schemes, airline passengers have a right to question why they should continue to pay levies and duties that were presented as environmental measures.”
The International Air Transport Association (IATA), ahead of the announcement on the deal, called on the EU’s politicians and policy-makers to support its own measures to reduce aviation emissions and to “stop plans to punish airlines and travellers with an ETS that will only invite international legal battles.”
IATA’s Director General and CEO, Giovanni Bisignani, said: “When it comes to aviation, Europe’s governments have lost the plot. Tunnel vision on emissions trading is no solution at all. Airlines are working hard to reduce their 2% share of global carbon emissions. Europe is fixated on punitive measures. Unilaterally bringing aviation into the EU ETS seeks to limit mobility and adds 4.2 billion euros ($6.6bn) to the cost of travel. But reducing emissions is more effective than charging for them.”
He called on Europe to drive a global approach to emissions trading. “Europe must show international leadership. The drafters of Kyoto envisaged a global ETS solution brokered through the International Civil Aviation Organization (ICAO) – a UN body. Europe’s unilateral regional scheme misses the mark. An ETS that is fair, global and compliant with international law could be effective, but only if it is part of a comprehensive programme to reduce emissions. Europe’s regional scheme is none of these. To survive the oil crisis, airlines are already doing everything possible to save fuel and reduce emissions. So there is no additional incentive. Already, over 130 countries have vowed to oppose it. And it puts 7.6 million aviation-related European jobs at risk with higher costs.
“Europe must refocus. First, it must put aside its ETS proposal. Making decisions in the middle of an energy crisis for an ETS to be implemented in five years is crazy. Second, it must be honest. Emissions taxes may fill government coffers, but they do little for the environment. Third, Europe must find a comprehensive strategy that can reduce aviation emissions – even in the middle of a crisis.”
The Air Transport Association of America (ATA), which represents most US carriers, expressed “grave concerns” over the EU move to include into the ETS all airlines flying regularly to or from Europe, saying it would siphon away funds required by airlines to invest in new, more environmentally efficient aircraft.
In a statement released ahead of the deal, the ATA said: “This scheme, which would require US and other non-EU airlines to pay EU entities for the airlines’ emissions for the entire length of a flight to and from Europe, becomes a revenue raiser for Europe, on the backs of the rest of the world. This is bad policy, particularly in light of the devastating effects high fuel prices already are having on the industry. As numerous countries have pointed out, it is a clear violation of international law. We hope the European legislature will think twice about this in the final vote that is expected soon. Otherwise, we would expect this matter will be heading for the courts.”
On the other side of the fence, João Vieira, a spokesman for the European Federation for Transport and Environment (T&E), an NGO, said: “Environmental campaigners have consistently said that this plan must deliver real reductions in greenhouse gas emissions from the aviation sector – and this deal fails to achieve that goal. The policy will offset just one year’s growth in emissions from the aviation sector, according to the European Commission’s own analysis.
“National governments must take the blame for failing to deliver a law that will actually cut emissions. The European Parliament had asked for a number of measures that could have resulted in real emissions cuts from aviation but national governments once again took the side of their flag-carrying airlines.
“We should be marking an historic multilateral deal to cut international aviation emissions, but in fact we are marking an historic missed opportunity.”
With responsibility for cutting international aviation emissions under the Kyoto Protocol having passed to ICAO, T&E said the organization “has so far written off or blocked every conceivable environmental policy for the sector.”
A second reading of the directive on the inclusion of aviation into the EU ETS will now be debated in the European Parliament next week and a vote is expected on Wednesday, July 9. The deal between representatives from Parliament and the Council has already been rubber-stamped by Member States, which was brokered by the EU Slovenian Presidency as it concluded its six-month term.
“The Slovenian Presidency managed to arrive at an agreement on one of the most challenging dossiers, which is closely linked with Europe’s overall aim to fight climate change,” stated the President of the Environment Council and Slovenian Environment Minister, Janez Podobnik.
“These measures should by no means hurt passengers, as the industry claimed in its initial response to news of the agreement. A tonne of CO2 costs around 30 euros ($47) today. This means that the additional cost per passenger would be around 5 euros ($8) on a round trip ticket for a European flight, 9 euros ($14) for a medium-haul flight and around 40 euros ($63) for a long-haul flight, according to the Commission’s impact assessment analysis.
“The industry should now focus on its role in making flights as fuel- and cost-efficient as possible. They should invest in a new generation of engines and planes. In an age of high fuel costs, when the EU is working hard to minimize the negative impact of high prices on consumers, the airline industry should do the same.”



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