Air France chief says current proposals for EU ETS will cause "useless turmoil" for airlines

Wed 11 June 2008 – Jean-Cyril Spinetta, Chairman and CEO of Air France KLM, has expressed concern over the direction of discussions currently taking place between EU legislators on the inclusion of aviation into the EU Emissions Trading Scheme (ETS). Despite earlier support for its introduction, he fears the principle of a neutral system that rewarded those airlines that made efforts to reduce GHG emissions is being lost.
He said proposals to auction allowances instead of a free allocation amounted to taxation and objected to a European Parliament amendment that would apply a multiplier whereby two permits instead of one would have to be paid for each tonne of CO2 emitted because of the effects of aviation NOx emissions at high altitudes. Europe’s attempts to include foreign airlines into the ETS, he went on, would conflict with bilateral agreements and cause “useless turmoil”, with some non-EU airlines choosing to bypass European routes altogether.
Pierre-Henri Gourgeon, Deputy CEO of Air France KLM, said: “We have supported the ETS from the outset. This seemed strange to other airlines at the time. However, as it respects market rules and is a neutral system, it was our duty to promote a virtuous behaviour. It encourages and motivates airlines to reduce their emissions.
“Where we have reservations is on the discussions underway. The first question is whether the scheme is going to be suitable for all participants, or will it create distortions? There is a real issue concerning non-European operators.”
He said the extension of the ETS to intercontinental traffic is discriminatory as it gives a competitive advantage to airlines with hubs located outside Europe, such as Dubai, as it enables them to divert traffic, and thus their CO2 emissions, without having to pay for permits.
“The second question,” he continued, “is whether the scheme will remain neutral or will it exert an additional economic pressure? We operate in an area where there are no substitutes for fuel and asking us to pay more for the right to fly is not a motivation. Besides purchasing new planes, there is little more we can do.”
Gourgeon said that without a free allocation of permits, the ETS becomes a taxation system and, coupled with a four-old increase in the cost of fuel, would further penalize airlines and reduce their capacity to invest in new aircraft.
Spinetta and Gourgeon were speaking at a media event held by Air France on Monday (June 9) and attended by over 100 international journalists to highlight environmental issues and the airline’s activities to improve operational efficiencies and reduce GHG and noise emissions. As well presentations from senior executives at a news conference, the airline held an exhibition to demonstrate various initiatives it is undertaking, such as weight reductions in onboard equipment, fleet renewal, a carbon calculator for passengers, as well as humanitarian and environmental projects.
Air France has invested an average of one billion euros ($1.55bn) annually since 1998 in new aircraft and claim to have one of the world’s youngest long-haul fleets. It has pledged to spend an average of two billion euros (nearly $3bn) a year until 2020 on reaching specific environmental targets. By 2012, the airline has committed to reduce jet fuel consumption from 3.95 litres per passenger per 100km in 2006 to 3.70.
Over the past six years, it has reduced its fuel consumption and specific CO2 emissions by 12%, with further reductions, including those of aircraft noise levels, planned for the next five years.
“The issue of climate change is a priority and it is our responsibility to respond proactively and with imagination,” said Spinetta.
Making an appearance at the event was Yann Arthus-Bertrand, the well-known French photographer and environmentalist. Arthus-Bertrand is chairman of the not-for-profit organization dedicated to supporting sustainable development projects around the world. Air France is financing a five million euro ($7.8m), three-year GoodPlanet project in Madagascar that is supporting WWF in protecting and restoring 500,000 hectares of forest, representing 60-70 million tonnes of potentially sequestered carbon.
“This is a truly important project, one of the largest ever financed by a company for forest protection,” said Yann-Arthus. “Air France is setting an example that it should be truly proud of.”
According to a recent statement by the UN Environment Programme (UNEP), Africa is losing more than four million hectares (9.9 million acres), roughly the size of Switzerland, of forest every year – twice the world’s average deforestation rate.
Pierre Caussade, Air France’s Vice President, Quality, Environment and Sustainable Development, told GreenAir that his airline was not interested in pursuing developments in biofuels until ‘third-generation’ biofuels became available, although noting the involvement of group partner KLM in an arrangement with Dutch company AlgaeLink to develop a jet biofuel using algae.
featuring presentations by:
Jean-Cyril Spinetta, Chairman & CEO of Air France KLM
Pierre-Henri Gourgeon, Deputy CEO of Air France KLM
Pierre Vellay, Sr. VP, New Aircraft and Corporate Fleet Planning, Air France
Françoise Barrard, Head of Flight Handling and Infrastructure, Air France
Pierre Caussade, VP Quality, Environment and Sustainable Development
Jacques Pichot, Secretary General of Air France
Yann Arthus-Bertrand, Chairman,



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