Seven European aviation firms have written to 4 government leaders complaining about the inclusion of airlines in the EU ETS. These include Airbus, BA and Virgin Atlantic. They are arguing now that the ETS threatens jobs. They are concerned about trade retaliation by countries not complying with the ETS. Airbus is claiming the retaliation by China and the USA is threatening more than 1,000 jobs (at Airbus) and another 1,000 through the supply chain. China had suspended the purchase of planes made by European manufacturers because of the levy. In a draft of the letter seen by the BBC, the companies urge politicians to pursue a “compromise solution”… They now want the ETS to be put on hold until a global plan for carbon emissions is agreed.
Aviation companies argue that putting a price on emissions will have an adverse impact on their industry
Seven European aviation firms have written to governments complaining about the inclusion of airlines in the EU’s Emissions Trading Scheme (ETS).
The signatories, which include Airbus, British Airways and Virgin Atlantic, argue the move threatens jobs.
They are concerned about trade retaliation by countries not complying with the ETS, which puts a cost on carbon emissions beyond set limits.
China and the US both oppose the move.
“The measure is threatening more than 1,000 jobs (at Airbus) and another thousand through the supply chain,” Airbus chief executive Thomas Enders is quoted as saying.
The boss of EADS, the parent company of Airbus, Louis Gallois told reporters last week that China had suspended the purchase of planes made by European manufacturers because of the levy.
“The ETS issue… is turning into a trade conflict,” an Airbus spokesman told the Financial Times.
Resistance
In a draft of the letter seen by the BBC, the companies urge politicians to pursue a “compromise solution… which will mitigate third-country concerns whilst protecting the environmental integrity of the EU Emissions Trading Scheme”.
They believe that the proposals should be put on hold until a global plan for carbon emissions is agreed.
“Trying to impose a scheme on flights outside of Europe risks retaliatory action against EU airlines and EU trade at a time when the European economy is under severe pressure,” a spokesperson from BA said in a statement.
“The amount of resistance to the EU’s plans shows that the European Commission needs a Plan B in case there is retaliatory action,” the statement goes on to say.
The European Union has gone it alone with its ETS, which levies a charge on flights in EU airspace based on carbon emissions.
The opposition campaign is being led by Airbus and has the support of the chief executives of British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia.
Letters have been sent to leaders including Britain’s David Cameron, Germany’s Angela Merkel and France’s Francois Fillon.
Bosses of major European firms say carbon tax could cost thousands of jobs.
Some of Europe’s largest aviation firms have written to political leaders to warn about the effects of the EU’s plan to bring global airlines into the emissions trading scheme (ETS).The group sent letters to the leaders of France, Germany, Spain and the UK warning them that a trade war was imminent if the EU pushed ahead with the carbon tax.
They said that counter-measures and other restrictions on European airlines “are in preparation” that would have a major impact on the aviation industry. They added that China had suspended a €9.2 billion order for Airbus planes, which they said would threaten more than 1,000 jobs at Airbus and a further 1,000 jobs in related businesses.
The letters were signed by the bosses of Airbus, British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia. The heads of Safran and MTU, two makers of aerospace engines, also signed the letters.
China, Russia, the United States and other countries have complained about the EU’s plans to include airlines in the ETS, under which they would have to pay for every plane that enters or leaves an EU airport. The Chinese government has already banned its national carriers from participating in the ETS. The US is considering legislation to ban US-based airlines from participating.
The aviation companies said they “fully expect the list of suspensions, cancellations and punitive actions to grow as other important markets continue to oppose [the] ETS”. They added that it was a situation Europe “can ill-afford in the current economic climate”.
The companies urged the political leaders to “urgently request consultations” at EU level and to seek negotiations with China and others that have taken or are threatening action. They suggested the EU call for talks at the International Civil Aviation Organization (ICAO).
“The aim must be to find a compromise solution and to have these punitive trade measures stopped before it is too late,” they said.
“We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions,” the aviation firms said.
European airlines rally against EU carbon tax: source
By AFP
Mar 11, 2012
Airbus and six European airlines have written to four EU leaders attacking the carbon tax imposed by the European Union, a source close to the dossier told AFP Sunday.
Plane maker Airbus, British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia have written to the leaders of Britain, France, Germany and Spain to warn them about its economic consequences, said the source.
They argue the tax could cost them billions of dollars in lost orders and lead to the loss of the thousands of jobs.
French aerospace and defence group Safran and Germany’s MTU also put their names to the letters, to British Prime Minister David Cameron, French Prime Minister Francois Fillon, German Chancellor Angela Merkel and Spanish Prime Minister Mariano Rajoy. All four countries helped found Airbus.
“We question the unilateral nature of this measure,” said the source, adding that they wanted talks with all those affected, within the International Civil Aviation Organization (ICAO).
Their initiative was first revealed late Sunday in the Financial Times.
It comes after the head of the Airbus parent company EADS said Thursday that China had blocked purchases of Airbus planes by Chinese companies in reaction to the disputed tax.
Airbus was being subjected to retaliation measures, EADS chief executive Louis Gallois told reporters.
According to a report on the website of the French economic daily Les Echos, China’s decision to freeze Airbus orders could cost the European aircraft company up to $12 billion (nine billion euros).
In the letter to Fillon, Airbus chief Tom Enders warned that the tax threatened more than a thousand jobs at the heart of the business and a thousand more in industries supplying Airbus, Les Echos reported.
On Tuesday, the head of the International Air Transport Association (IATA) warned that the EU tax could provoke trade wars.
On Friday however, Denmark’s Climate Minister Martin Lidegaard said the EU would maintain the tax on airlines operating in its airspace so long as an international solution had not been found.
Denmark currently holds the EU’s rotating presidency.
The carbon tax imposed on airlines by the European Union came into effect on January 1, but carriers will begin receiving bills only in 2013 after this year’s carbon emissions have been assessed.
More than two dozen countries, including China, Russia and the United States, have opposed the EU move, saying it violates international law.
But the EU has said the tax will help it achieve a goal of cutting carbon emissions by 20 percent by 2020 and has insisted it will not back down on the plan.
It argues that the cost for airlines is manageable, estimating that the scheme could prompt carriers to add between 4.0 and 24 euros ($5.25 and $31.50) to the price of a round-trip long-haul flight.
China has blocked purchases of Airbus planes by Chinese firms in reaction to a disputed European carbon tax, the head of Airbus’s parent company, EADS, has said.
EADS chief executive Louis Gallois says Airbus is being subjected to “retaliation measures” by China.
The EU imposed a carbon tax on airlines which took effect on 1 January.
China has not commented, and it is not clear whether it is official policy or a negotiating ploy, analysts say.
There’s something very, very wrong with the claim being made by Airbus, along with 6 airlines and 2 engine manufacturers, that some A330 orders from Chinese airlines are “not being finalised” because of fears that the EU ETS will have an adverse impact on ticket prices.
Firstly, in January this year, Cathay Pacific’s CEO estimated that a one-way ticket from Hong Kong to Europe could go up by HK$50 or £4.11 pence. This will have absolutely zero impact on traffic and will be passed on to passengers in any event. A return ticket would therefore face an £8.22 pence surcharge – EU ETS costs will clearly not mean the end of air travel between Europe and China.
Secondly, there are 854 A330′s currently in service, with a 335 production backlog – they are built at a rate of 9 per month. Just like Boeing, Airbus requires a 5% deposit, often with further staged payments, as aircraft are built. Airlines order new aircraft to fit their acquisition/fleet commonality and replacement plans, alongside route development and growth forecasts. Production line slots will not easily be given up on a whim, particularly when switching to a rival manufacturer could be hugely problematic and very costly.
More importantly, the 5% deposits are also non-refundable. An A330 has a variant-dependent list price between US$200 to 225 million. Are we seriously meant to believe that Chinese airlines are prepared to throw away millions of dollars in forfeited deposits over a few pounds per ticket ETS surcharge? I don’t think so.
So what’s going on? It’s simple really: airlines and aerospace manufacturers despise the EU ETS and will go to any lengths to collapse the scheme, hence this kind of PR-inspired political pressure. It seems Airbus do not only make aircraft – they can also manufacture stories.
Jeffrey Gazzard
Board Member
Aviation Environment Federation
LONDON
Comment from an AirportWatch member:
What a wonderful exercise in double think – they urge the EU to suspend the ETS so that its environmental aims can be fulfilled through a global agreement, Thus the airlines are pretending to be eager for a solution that reduces emissions while at the same time doing everything they can to make sure there never is such a global agreement.
It is clear to me that this always was the airlines’ game plan – and that going along with the ETS initially allows them now to permanently derail it while not looking like the bad guys.
An aviation industry body calling itself The Sustainable Aviation Group has updated its 2008 Road-Map on how it hopes to continue growing as much as possible, and yet also magically keep its carbon emissions down. There are many assumptions about the extent of fuel efficiency from new planes and new engines; from better operational practices such as better air traffic control. And a huge hope that biofuels will be the salvation and provide immense carbon savings. In addition, they will depend to a huge extent on carbon trading with other sectors, so at least a quarter of their emissions will have to be compensated for by other sectors. And for all this they want a lot of government subsidy and assistance – which means money from the tax payer.
UK aviation industry plots roadmap to accommodate significant growth to 2050 without substantial CO2 increase
Thu 8 March 2012 (GreenAir online)
An alliance of UK aviation sectors committed to driving a greener long-term strategy for the industry says a significant growth in passenger and freight traffic to 2050 is possible without a substantial increase in absolute carbon emissions.
The Sustainable Aviation (SA) group http://www.sustainableaviation.co.uk/ – made up of airlines, airports, aerospace manufacturers and the national ANSP [see membership list ] – has updated its 2008 Road-Map to reflect revised traffic forecasts and the latest developments in aircraft and engine technologies, as well as progress made in aviation biofuels.
The group says the latest Road-Map takes into account its support for the global industry target of reducing emissions to 2005 levels by 2050 and recognising the significant role required of carbon trading in achieving this aim.
SA warns the UK government against imposing unilateral national targets and measures to restrain capacity or including international aviation emissions in UK carbon targets.
Currently, CO2 emissions from UK aviation make up around 5-6% of the worldwide [aviation] total and although this share will decrease as global growth rates are expected to be considerably higher due to rapid development in emerging markets, UK passenger numbers are still forecasted to grow at an average of around 2% per annum to 2050.
Citing Department for Transport (DfT) 2011 data, in the absence of any improvements in fleet fuel efficiency or in operational practices, and assuming no use of biofuels, SA expects carbon emissions from UK aviation would rise 150% between 2010 and 2050, implying an average annual growth rate of 2.32%. Overall CO2 emissions would rise in this scenario from 33.4 million tonnes in 2010 to 83.5 million tonnes in 2050.
Offsetting this growth are a number of developments that have taken place since publication of the previous Road-Map, such as the benefits from an earlier than previously anticipated introduction in the middle of this decade of re-engined single-aisle airliners from Boeing and Airbus.
SA also sees a higher level of ambition and renewed focus on European aerospace research and the rapid development of biofuels following certification of two main classes of blends in 2011.
The Road-Map has also been updated to reflect the global industry’s own targets announced in 2009, the annual 2% fuel efficiency improvement agreement reached at ICAO and the incorporation of aviation in the EU Emissions Trading Scheme.
The introduction of the ‘imminent’ generation of aircraft types will improve the fleet-average fuel efficiency of UK aviation by some 17% by 2050, says SA, with the bulk of this improvement delivered by 2040. It estimates the subsequent generation of aircraft types from 2025 onwards has the potential to improve fuel efficiency by a further 26% by 2050. Combined, the introduction of more fuel-efficient aircraft and engines between 2010 and 2050 should yield improvements of around 39%, calculates the industry group.
Other improvements in air traffic management, for example optimal flight profiles, and ground-based operational practices, such as improved taxiing techniques and APU substitution, have the potential to improve UK aviation fuel efficiency by a further 13.5% by 2050 relative to 2010, although SA has factored in a 9% improvement in its Road-Map.
SA estimates that by 2050 the use of sustainable fuels in UK aviation will offer between 15% and 24% reduction in CO2 emissions. This assumption is based on a 25-40% penetration of sustainable fuels into the global aviation fuel market, coupled with a 60% life-cycle saving in emissions compared to fossil fuel-derived kerosene. For the purposes of the Road-Map, SA has assumed an overall 18% reduction in emissions from the use of sustainable jet biofuels.
Taking together advances in aircraft, engine, ATM and operational technologies and procedures, the combined average improvement in fuel burn per tonne-kilometre is some 1.44% per annum, of which an average of 1.21% per annum is derived from the deployment of more fuel-efficient aircraft. This is improved still further, to 1.93%, when the impact of sustainable fuels is taken into account.
SA acknowledges that its projection of absolute CO2 emissions from UK aviation in 2050 is some 22% lower than the DfT forecast and also lower than that estimated by the UK government’s independent climate advisers, the Committee on Climate Change, but it believes that there are bigger gains to be made from new aircraft efficiencies and is more bullish about the prospects for sustainable fuels.
Even with this lower forecast, SA projections would appear to indicate that a substantial tonnage, perhaps as much as 20 million tonnes of CO2 in 2050, of UK aviation emissions will have to be offset through carbon trading in order to achieve the industry target of 50% net reduction of 2005 levels by 2050. [Out of 33.4 million tonnes in 2010 to 83.5 million tonnes in 2050 quoted above for UK aviation emissions. So about a quarter of their total emissions. AW].
Carbon trading is by far the most effective economic instrument to reduce net emissions in the aviation sector, believes SA. However, it adds, the climate impact of international aviation cannot be confined to the UK and must be addressed at a global level through appropriate bodies such as ICAO. Globally, it says, policy should be coordinated on a pathway towards a global target for aviation within an internationally-agreed carbon trading framework that would complement technological developments, operational improvements and the use of sustainable fuels.
The UK government is due to make a decision on whether international aviation emissions should be included in national carbon budgets, a move which SA strongly opposes.
However, the group calls on the government to provide additional help for UK research and development, support the drive towards an interoperable European air traffic management system, incentivise the production of sustainable fuels and prioritise a global deal on carbon trading. [ie. the industry wants public funds to assist them, from taxpayers].
Presenting the findings at the House of Commons, Matt Gorman, BAA’s Director of Sustainability and the current Chair of Sustainable Aviation, said: “This report shows that UK aviation can achieve economic growth to 2050 without a substantial increase in absolute CO2 emissions by implementing a series of simple measures.
“The industry also supports the international goal of halving net CO2 emissions by 2050 compared to 2005 levels. Achieving this will not only require the continued commitment and focus of the aviation industry itself but will also rely on action from governments.”
Aviation groups publish road map for meeting emissions goals
6 March 2012
Sustainable Aviation, an alliance of leading UK aviation groups, today publishes a report explaining how the aviation industry and government can accommodate significant economic benefit from aviation in the period to 2050 without a substantial rise in absolute CO2 emissions. SA also sets out its support for a reduction in net CO2 emissions to half of 2005 levels by 2050.
The report comes against a background of rising aviation demand, and the forthcoming publication of the UK Government’s Sustainable Aviation Review. Passenger numbers are expected to more than double by 2050 and air freight activity, vital to the UK’s trade with emerging markets, is expected to increase more than seven fold.
The report calls the aviation industry and government to take the following steps to ensure the emissions goals are met while satisfying rising demand for air travel:
Provide research and development support for new generation aircraft and engine technology. The UK’s leading position in the aerospace industry means that the UK Government can exert strong influence over global aviation’s carbon emissions by providing additional support for research and development here in the UK.
Improve air traffic management. Our report explains that the industry can take several simple steps to minimise emissions: using mains power, instead of aircraft engines, as generators, running engines less during taxiing, optimising the flight path and cruising altitude, devising steady patterns of descent, and reducing the need for aircraft to circle in the air before they land will all help reduce flights’ environmental impact.
Incentivise the production of sustainable fuels. Governments must provide positive incentives, through the provision of loans and guarantees that will attract private sector investment in biojet fuels to make their development more economically viable.
Prioritise a global deal on carbon trading. Governments should prioritise reaching an agreement on a global carbon emissions deal and make it happen.
Matt Gorman, BAA’s Director of Sustainability and the current Chair of Sustainable Aviation, said: “This report shows that UK aviation can support UK economic growth to 2050 without a substantial increase in absolute CO2 emissions by implementing a series of measures. The industry also supports the international goal of halving net CO2 emissions by 2050 compared to 2005 levels. Achieving this will not only require the continued commitment and focus of the aviation industry itself but will also rely on action from governments.”
Sustainable Aviation has published a report explaining how governments and the aviation industry can achieve the industry target of halving CO2 emissions by 2050, compared with 2005 levels. The report comes against a background of rising aviation demand, and the forthcoming publication of the UK Government’s Sustainable Aviation Review. Passenger numbers are expected to more than double by 2050 and air freight activity, vital to the UK’s trade with emerging markets, is expected to increase more than seven fold.
Several recent stories about climate change reveal that the rate of ocean acidification is speeding up, due to increased CO2 in the atmosphere creating carbonic acid in oceans, making their pH lower. The pH is currently dropping by about 0.1 per century. This ocean acidification harms organisms such as corals that rely on dissolved carbonate to make their shells. NASA has observed a massive new crack in the Antarctic ice shelf, which will eventually produce a vast 900 square metre iceburg, though it may not be calved off this year. Attempts to determine whether the Antarctic is losing ice have produced some conflicting data, but recent reports agree that the ice sheet is losing ice – and indeed that the rate of loss has been speeding up. The ice loss is largely in the Western Antarctica, particularly around the Antarctic Peninsula.
Billions of tons of water lost from world’s glaciers, satellite reveals
9.2.2012 (Independent)
by Steve Connor
The total volume of water that has melted from all of the world’s polar ice sheets, ice caps and mountain glaciers over the past decade would repeatedly fill Britain’s largest lake, Windemere, more than 13,000 times, according to one of the most comprehensive studies of the Earth’s frozen “cryosphere”.
Using a unique pair of satellites that have monitored the disappearing ice over the entire surface of the globe, scientists estimated that some 1,000 cubic miles of ice has disappeared between 2003 and 2010 – enough to cover the US in one-and-a-half feet of water.
The survey found that the melting of the cryosphere has been responsible for raising sea levels by about half an inch over the same period, equivalent to a rise of about 1.5mm a year. This was on top of sea-level increases due to the thermal expansion of seawater caused by rising ocean temperatures.
Data gathered by the Gravity Recovery and Climate Experiment (GRACE), a joint satellite project run by Nasa and the German government, also found that the amount of ice melting from the mountain glaciers and ice caps that were not in Greenland or Antarctica was actually significantly smaller than previous estimates had suggested.
Instead of contributing nearly 1mm of sea level rise per year as previously suggested, some of the Earth’s glaciers and ice caps, especially in the Himalayas and other mountain ranges in Asia, were melting significantly slower than expected, contributing about 0.4mm of sea level rise per year – less than half the amount predicted.
One explanation for the previous overestimates could be that most of the glaciers that have been studied intensively are at lower altitudes and therefore more prone to melting. Higher glaciers are colder and less susceptible and yet only 120 glaciers out of 160,000 glaciers and ice caps have been directly measured from the ground.
The GRACE satellite experiment, however, covered the entire globe and found that all the world’s glaciers and ice caps combined, apart for those in Greenland and Antarctica, had lost about 148 billion tonnes of ice, or about 39 cubic miles, annually between 2003 and 2010. The individual glaciers on the fringes of Greenland and Antarctic contributed an additional 80 billion tons over the same period, the study published in Nature found.
“This is the first time anyone has looked at all of the mass loss from all of the Earth’s glaciers and ice caps with GRACE,” said John Wahr, professor of physics at the University of Colorado at Boulder, who was part of the research team that analysed the satellite data.
“The Earth is losing an incredible amount of ice to the oceans annually, and these new results will help us to answer important questions in terms of both sea-level rise and how the planet’s cold regions are responding to global change.”
Professor Jonathan Bamber, of Bristol University, said: “Melting glaciers are an iconic symbol of climate change… they seem to have been receding, largely uninterrupted, almost everywhere around the world for several decades.”
1,000 Cubic miles of ice has disappeared between 2003 and 2010 from polar caps.
Gigantic Antarctic crack mapped for the first time
March 1, 2012 (Canberra Times)
NASA’s Operation IceBridge discovers a major rift in western Antarctica, which could produce an iceberg more than 800 square kilometers in size.
In a scene straight out of a science-fiction disaster movie, space agency NASA has revealed what a vast crack across Antarctica looks like up close.
The 2004 disaster movie The Day After Tomorrow opened with a the Antarctic iceshelf cracking before extreme global weather, and now NASA has it live and on YouTube.
In October 2011, researchers flying in NASA’s Operation IceBridge campaign made the first detailed, airborne measurements of a major iceberg calving event while it was in progress.
A section of the massive crack in an Antarctic glacier – which measures 250m at its widest point – that has been mapped by NASA.
By February, IceBridge’s team had mapped the crack in Antarctica’s Pine Island Glacier in a way that allowed glaciologists to fly through the icy canyon.
The animation was created by draping aerial photographs from the Digital Mapping System – a still camera with very precise geolocation ability – over data from the Airborne Topographic Mapper, a scanning laser altimeter that measures changes in the surface elevation of the ice.
Both instruments were flown on NASA’s DC-8 research aircraft and the data was collected on October 26 last year.
The crack formed in the ice shelf that extended from one of West Antarctica’s fastest-moving glaciers.
The path of the crack in the animation stretched roughly 30 kilometres in length (the actual crack was much longer), with an average width of about 80 metres. It was 250 metres at its widest.
The canyon ranged from 50 to 60 metres deep, with the floor being roughly at the water line of the Amundsen Sea.
Radar measurements suggested the ice shelf was about half a kilometre thick, with only a third of it above water.
NASA said scientists had been waiting for the crack to propagate through the rest of the ice shelf and release an iceberg, which they estimated could span 900 square kilometres.
If it did not split off soon, however, the sea ice that formed with the onset of southern winter might keep the ice chunk trapped against the coast for a while.
Almost 70% of the globe’s fresh water is stored as ice in Antarctica, mostly in the huge ice sheet covering the continent. As well as this land-based ice, the sea ice that encircles the continent grows to a wide expanse in winter and almost entirely melts away during the summer.
Scientists trying to resolve these two trends have suggested that the sea ice growth could be happening because the ozone hole over Antarctica is affecting weather patterns in the region. They think changes in weather may be enhancing offshore winds, which spread the sea ice out by pushing it away from the continent. Another theory is that the amount of freshwater in the Southern Ocean has increased, diluting the salt content of the seawater, altering ocean circulation patterns and aiding sea ice growth.
But increasing sea ice is only a small part of the Antarctic story. Scientists have also used satellite observations of the land-based ice sheet to measure whether the Antarctic ice sheet has been losing or gaining ice.
Attempts to answer the question came up with estimates ranging from an increase of about 100bn tonnes of ice per year since the 1960s to a loss of 200bn tonnes a year over the same period. However, more recent reports agree that the ice sheet is losing ice – and indeed that the rate of loss has been speeding up.
Ice loss is not uniform over the whole of the ice sheet. Eastern Antarctica was initially found to be relatively stable, with most of the ice being lost in Western Antarctica, particularly around the Antarctic Peninsula. These regional differences in ice loss fit with the pattern of temperature change over the ice sheet.
• This article was written by Carbon Brief in conjunction with the Guardian and partners
Humanity’s greenhouse gas emissions may be acidifying the oceans at a faster rate than at any time in the last 300 million years. The sheer speed of change means we do not know how severe the consequences will be.
Bärbel Hönisch of Columbia University in Palisades, New York, and colleagues used the chemical record preserved in rocks to gauge previous ocean acidification events.
The best match for current changes was the Palaeocene-Eocene thermal maximum of 55 million years ago, when vast amounts of methane were released into the atmosphere causing rapid global warming, ocean acidification, and mass extinction. But even then, it took at least 3000 years for ocean pH to drop by 0.5. “That is an order of magnitude slower than today,” Hönisch says.
The 300-million-year period that Hönisch and colleagues studied includes the biggest extinction of them all: the end-Permian extinction. This event, 252 million years ago, wiped out up to 96 per cent of marine species. But it probably had other causes.
Acidification is not the only threat to the oceans from greenhouse gases, says Nicolas Gruber of the Swiss Federal Institute of Technology Zurich in Switzerland. Marine life also faces a threat from rising water temperatures andless dissolved oxygen.
“We have to think about these effects co-occurring,” Gruber says. While we have information on the consequences of each individual factor, we have no idea what the combined effect will be.
Russia has threatened to cap EU airline flights over Siberia as part of possible retaliatory measures approved by more than 20 countries at a recent meeting in Moscow. Valery Okulov, Russia’s deputy transport minister, said each country could choose whatever measure it wanted, in line with its own laws, to try to stop the EU including airlines in its ETS. He said Russia would look at limiting EU airlines’ use of routes over Siberia, and give preference instead to carriers from Japan, China and other Asian nations. ”We are calling on the European Union to do whatever it takes to prevent a trade war,” he said. “We intend to get EU’s carbon trading measures either cancelled or postponed.”
But the alliance of opponents, which includes the US, China and Japan, backed away from some of the more extreme steps they had been discussing ahead of a two-day meeting in Moscow that ended on Wednesday, such as reopening existing EU trade deals to pressure European industries.
The Moscow meeting also revealed the make-up of the countries fighting Brussels has changed since their efforts kicked off in India in September.
The US, China, Brazil, India, Japan and Russia have stayed steady opponents since then. But several others involved in earlier protests did not sign the Moscow declaration, including Canada, Egypt and Qatar.
And the number of Moscow signatories would have been smaller but for the presence of newer opponents, such as the former Soviet states of Armenia and Belarus.
And although officials from 23 countries signed a declaration listing eight measures they might adopt, they said they would only “consider” such actions.
The alliance of opponents aims to stop the bloc’s imposition of charges on carriers for their carbon pollution.
The retaliatory steps include imposing new taxes on EU airlines, and suspending talks about giving European carriers more flying rights outside the bloc.
But the alliance of opponents, which includes the US, China and Japan, backed away from some of the more extreme steps they had been discussing ahead of a two-day meeting in Moscow that ended last Wednesday, such as reopening existing EU trade deals to pressure European industries.
And although officials from 23 countries signed a declaration listing eight measures they might adopt, they said they would only “consider” such actions.
Connie Hedegaard, the EU climate commissioner, has repeatedly insisted Brussels will not back down to opponents of its boldest move yet to force the rest of the world to comply with its ambitious climate rules.
Writing on Twitter on Wednesday, she said: “Wonder if the next meeting hosted by Saudi Arabia will give a climate-friendly answer to the key question: what’s your concrete alternative?
Environmental campaigners said the Moscow meeting’s failure to agree on co-ordinated measures suggested the opponents’ efforts were fizzling out.
The outcome of the meeting showed “cooler heads may have prevailed and, if so, they are to be commended”, said Annie Petsonk of the US Environmental Defense Fund.
The officials gathered in Moscow agreed to meet again in Saudi Arabia in the summer.
EU bullish as opponents confirm aviation trade war threats
February 24, 2012 23 of the countries meeting in Moscow to oppose the ETS signed a joint agreement that sets out 8 “counter measures” that signatories could take to try to force the EU to ditch ETS plans. [6 of the signatories, Cameroon, Chile, Cuba, Guatemala, Paraguay, Uganda, have no carriers covered by the EU ETS]. The 23 countries would “consider” measures and actions if the EU failed to respond. Canada, Egypt and the UAE abstained from the final agreement. An earlier draft suggestion on re-opening existing wider trade agreements was dropped from the final text. EU data shows the ETS will have a negligible impact on ticket prices, adding €1.34 to the cost of a flight from London to New York or €0.76 to the cost of a flight from London to Moscow. Despite threats of trade wars and retaliation, the EU remains adamant it will not change or postpone its legislation. Click here to view full story…
India, Russia oppose EU carbon tax
February 23, 2012 A meeting of 30 countries opposed to the ETS has taken place in Moscow. 29 of them, but not India, agreed a declaration listing 8 retaliatory steps against the EU unless it excludes their airlines from charges when flying to or from Europe. These measures include legal action, suspending talks with European carriers on new routes, reviewing bilateral service and open skies agreements with European countries and imposing retaliatory levies on EU airlines. They can choose whichever they want. Connie Hedegaard says Brussels would not suspend the ETS for aviation. The next meeting of the countries opposed to the ETS would be held in summer in Saudi Arabia. EU officials have said they may be willing to “moderate” their stance on ETS, if a deal for an equivalent global system can be reached through ICAO. Airlines do not need to buy their carbon permits until April 2013. Click here to view full story…
A senior parliamentary committee of MEPs has agreed controversial measures to let the EU Commission cut the supply of carbon permits in the bloc’s ETS, in a bid to prop up CO2 prices lingering below €10, even below €8. The industry committee of the EU Parliament passed an amendment to the Energy Efficiency Directive to allow the EC take measures by the end of the year that “may include withholding of the necessary amount of allowances” from the 2013-2020 phase of the EU carbon market. Before becoming law the bill still needs approval from the full Parliament and the Council of 27 environment ministers. Sandbag welcomed this move and said politicians must remove at least 1.4bn permits to get the market in carbon to work properly. “Today’s vote is a significant step in that direction.”
European Parliament gives mandate for fixing the EU Emissions Trading System
posted by Damien (Sandbag)
28th Feb 2012
This morning MEPs in the Industry, Research and Energy Committee gave the Commission a clear mandate to intervene in the EU ETS to correct for the impacts of the Energy Efficiency Directive and to preserve the incentives for low carbon investment.
Sandbag welcomes this development, and hopes to see political support for recalibrating the ETS grow within the parliament and council in the coming months.
Damien Morris, Senior Policy Advisor at Sandbag said, “The EU emissions trading scheme could be a powerful tool for both energy efficiency and low carbon growth in Europe but at present it is dying under the weight of too many emissions permits. Politicians control this market and they can and must fix it by taking away at least 1.4bn permits. Today’s vote is a significant step in that direction.”
EU Parliamentary committee agrees set-aside measures
Brussels,
28 February 2012 (Commodities Now)
A senior parliamentary committee of MEPs on Tuesday agreed controversial measures to let the EU Commission cut supply of carbon permits in the bloc’s Emissions Trading Scheme in a bid to prop up CO2 prices lingering below 10 euros. The industry committee of the EU Parliament passed an amendment to the Energy Efficiency Directive to allow the EC take measures by the end of the year that “may include withholding of the necessary amount of allowances” from the 2013-2020 phase of the EU carbon market.
Before becoming law the bill still needs approval from the full Parliament and the Council of 27 environment ministers.
“Today’s vote provides a strong mandate for the Parliament in its negotiations with the Council on the final legislation,” said Claude Turmes, the Green MEP who steered the bill through the industry committee, in a statement.
Turmes said the committee agreed text beefs up the bill that is designed to ensure the bloc meets a 2020 target to cut primary energy consumption 20 percent.
The bill seeks to impose binding measures on governments to renovate public buildings and force power companies to cut final energy use 1.5 percent a year.
Just one of the 18 compromise amendments was rejected by the committee, giving the parliament a more unified voice that some observers reckon will strengthen its negotiating hand with member states.
FAST TRACK
The MEPs gave the green light to back a fast-track plan for parliamentary envoys to begin talks with EU governments before a full vote in parliament, increasing the chances that a bill can be made law in the first half of the year.
Denmark, a proponent of strong efficiency measures and chair of discussions between member states, has pledged to complete the bill before its term as holder of the rotating EU presidency expires in July.
But while the bill is slated to be passed before July, it is unclear whether the so-called set-aside provision will survive. Member states are divided on whether to impose extra carbon costs on their industries amid tepid economic growth.
The European Commission is also split on whether to impose a set-aside, despite Climate Commissioner Connie Hedegaard being in favour.
Antonio Tajani, who heads the Commission’s Industry department, on Tuesday cautioned against intervening in the cap-and-trade scheme.
“In the middle of a crisis one cannot demand impossible things from the industry,” said Tajani at a briefing to journalists before the parliamentary committee vote.
“The pricing of allowances should be left to the market. The prices would recover by themselves as soon as the economy would pick up.”
New York Times editorial, supporting the EU ETS. It says the CO2 from airplanes accounts for about 3% of the world’s greenhouse gas emissions, a share projected to go up as air traffic rises. And that Europe hopes it will avert any increase in emissions and lead to a modest drop, beginning with a 3 % cut this year compared with a 2004-6 baseline. And ”passengers are not looking at charges much greater than what it now costs to check a single bag. This seems a small price to pay for encouraging more efficient airlines and beginning to address global warming.”
The carbon dioxide from airplanes accounts for about 3 percent of the world’s greenhouse gas emissions, a share projected to go up as air traffic rises. The European Union is now requiring airlines that fly into or out of Europe to pay a fee for these emissions. This is a smart response to an urgent problem. The United States and the other nations opposing the program should either come up with a better idea — soon — or drop their objections.
Under the scheme, essentially a cap-and-trade system, airlines will be given an emissions ceiling and allocated permits. They will have to buy new permits only if they exceed the ceiling. This will put a premium on operating more efficiently. And Europe’s hope is that it will avert any increase in emissions and lead to a modest drop, beginning with a 3 percent cut this year compared with a 2004-6 baseline.
The United States, Russia, China and 20 other nations opposed to the plan met in Moscow last week to plot a response. Though no specific actions were agreed, there was much belligerent talk, and even a list of possible retaliatory actions, including levies on European-based airlines that fly internationally. Russia suggested that it might withdraw permissions for European airlines to fly over Siberia on routes from Europe to Asia.
For the sake of their own financial survival, many airlines are trying to become more efficient. But like the power industries, many of which have vociferously resisted cap and trade, they want to change on their own schedule, and without the threat of penalties.
Governments are clearly listening to their airlines. Many, notably Russia and China, also bristle at what they see as an insult to their sovereignty. The Obama administration says it would prefer a global agreement under United Nations auspices. That would be great. But Europe argues, with some justification, that talks aimed at such an agreement have been going on fruitlessly for 15 years, while the problem of climate change continues to grow.
It is not yet clear how many airlines, if any, will exceed their allotment, and by how much. Some of them have already added small surcharges — $3 in the case of Delta Air Lines — in anticipation of having to pay something when the E.U. presents the bill.
The cost estimates are all over the lot. The E.U. expects a first-year increase of $2.60 in the price of a ticket between Europe and China. The International Air Transport Association says increases could be in the $20 to $45 range. Either way, passengers are not looking at charges much greater than what it now costs to check a single bag. This seems a small price to pay for encouraging more efficient airlines and beginning to address global warming.
23 of the countries meeting in Moscow to oppose the ETS signed a joint agreement that sets out 8 “counter measures” that signatories could take to try to force the EU to ditch ETS plans. [6 of the signatories, Cameroon, Chile, Cuba, Guatemala, Paraguay, Uganda, have no carriers covered by the EU ETS]. The 23 countries would “consider” measures and actions if the EU failed to respond. Canada, Egypt and the UAE abstained from the final agreement. An earlier draft suggestion on re-opening existing wider trade agreements was dropped from the final text. EU data shows the ETS will have a negligible impact on ticket prices, adding €1.34 to the cost of a flight from London to New York or €0.76 to the cost of a flight from London to Moscow. Despite threats of trade wars and retaliation, the EU remains adamant it will not change or postpone its legislation.
More details have emerged from the Moscow meeting of more than 25 countries opposed to the EU’s aviation emissions trading scheme (ETS), outlining how governments plan to ensure airlines’ inclusion in the scheme is “canceled or postponed”.
A copy of the final agreement, obtained by BusinessGreen, sets out eight “counter measures” that signatories could take to force the EU to ditch plans that effectively impose an emissions levy on all flights in and out of the bloc.
Crucially, the signatories, which include Russia, the US, China, Brazil and India, agreed that they could use legislation to “prohibit airlines/aircraft operators of that state from participating in the EU ETS”.
The agreement also sets out a raft of retaliatory measures, including proposals to impose additional charges on EU airlines, mandate EU airlines to hand over data, review existing bilateral aviation agreements, and suspend current and future negotiations on new routes and landing rights.
Separately, the document includes a number of lobbying measures, such as plans to call on European airlines to step up complaints to the EU, file a formal dispute resolution request with the International Civil Aviation Organisation (ICAO), and consider whether the EU scheme is consistent with World Trade Organisation (WTO) rules.
However, an EU source told BusinessGreen the bloc has no intention of backing down and would welcome further negotiations at the ICAO.
“Our position remains the same: we want an international agreement that has the same level of ambition as our scheme – we want this to go to the ICAO,” he said, adding that the bloc has yet to have concrete confirmation from any country that retaliatory measures will be taken.
There have been reports that the Chinese government has banned airlines from taking part in the scheme, while Russia indicated yesterday that it could take similar steps. But the EU maintains that it has not had any formal confirmation from either country that bans will be imposed.
The spokesman’s comments were echoed by EU climate change commissioner Connie Hedegaard, who used Twitter to challenge opponents of the EU ETS to put forwards a “concrete, constructive alternative”.
There was also evidence yesterday that the Moscow agreement has been watered down slightly, after the US, wary of a full-blown trade war, insisted that a threat to re-open other trade deals with the EU was removed from an earlier draft, also seen by BusinessGreen.
In addition, despite reports that almost 30 states attended the Moscow meeting, only 23 signed the final agreement, while a number of countries, including Canada, Egypt and the UAE, apparently abstained.
The EU hit back against the agreement yesterday when it released new data showing that the s
Speaking to BusinessGreen, one carbon trader said he is confused as to “what all the fuss is about”.
“We are talking about extremely small sums. Ryanair has put a surcharge on flights because of the scheme but it is about 25 pence,” he said. “There is also a study from MIT which suggests that airlines could actually generate a windfall profit from the scheme with the free allocations.”
Meanwhile, airlines are increasingly worried at the prospect of a trade war that could disrupt new routes and result in further levies, as well as forcing them to either break the law in the EU by not complying with the ETS or break the law in their home states by taking part in the scheme.
A spokeswoman for the Association of European Airlines toldBusinessGreen that the industry urgently wants the EU and its opponents to sit down and agree a new global regime for tackling emissions.
“The last thing the industry wants is a cycle of retaliation,” she said. “We need to stop this vicious circle and get to a concrete solution. The EU’s regional approach is not right, but the non-EU countries are not right to pursue retaliatory measures. We want to see a solution at a global level that is delivered within a reasonable time frame.”
Coalition of states comes up with basket of countermeasures over EU ETS but falls short of a coordinated attack
Thu 23 Feb 2012 (GreenAir online)
Of the 26 or so countries who met this week to discuss measures to derail the EU’s inclusion of third country airlines and operators into the EU ETS, 23 of them signed a joint declaration calling on the EU and its member states to cease application of the directive and said they would “consider” measures and actions if the EU failed to respond.
Even though the tone of the declaration is less confrontational than some expected, it is thought Canada, Egypt and the UAE abstained from the final agreement. The “coalition of the unwilling”, as it has been dubbed, has come up with a list of eight possible measures the signatories could take in retaliation, including filing an Article 84 dispute application at ICAO and prohibiting their carriers from participating in the EU carbon reduction scheme.
An earlier draft suggestion on re-opening existing wider trade agreements and negotiations with the EU was dropped from the final adopted text.
The declaration issued yesterday said the unilateral inclusion of international civil aviation in the EU ETS was an obstacle to the progress of work underway at ICAO to address international aviation emissions, and there had been a lack of constructive dialogue from EU states to address non-EU concerns expressed in the declaration signed after the previous Delhi meeting last September and subsequently adopted by the ICAO Council.
The agreement – signed by the United States – also stressed the importance of the Kyoto Protocol and the relevant provisions of the United Nations Framework Convention on Climate Change (UNFCCC).
It was signed by representatives from Armenia, Argentina, Belarus, Brazil, Cameroon, Chile, China, Cuba, Guatemala, India, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Russian Federation, Saudi Arabia, Seychelles, Singapore, South Africa, Thailand, Uganda and theUnited States. Six of the signatories (in italics) have no carriers covered by the EU ETS.
The basket of actions and measures proposed were:
- Filing an application under Article 84 of the Chicago Convention for resolution of the dispute according to the ICAO Rules for the Settlement of Differences;
- Using existing or new state legislation, regulation or other legal mechanism to prohibit airlines/aircraft operators of that state from participating in the EU ETS;
- Holding meetings with EU carriers and/or aviation-related enterprises in their respective states and apprise them about the concerns arising out of the EU ETS and the possibility of reciprocal measures that could be adopted by the state, which may adversely affect those airlines and/or entities;
- Mandating EU carriers to submit flight details and other data;
- Assessing whether the EU ETS is consistent with the WTO Agreements and taking appropriate action;
- Reviewing bilateral service agreements, including Open Skies with EU member states, and reconsidering the implementation or renegotiation of the ‘horizontal agreement’ with the EU;
- Suspending current and future discussions and/or negotiations to enhance operating rights for EU airlines/aircraft operators; and
Imposing additional levies/charges on EU carriers/aircraft operators as a form of countermeasure.
The wording of the draft declaration allowed for the inclusion of the announcement that a named state would file an Article 84 application in ICAO but a decision does not appear to have taken place at the meeting. A letter from each of the signatories that was due to be sent to the EU and its member states also did not make it to the final agreement. The draft of the strongly-worded letter said that due to the intransigence of the EU, the sender would not participate in the EU ETS and would be initiating necessary measures to prevent its carriers from joining the scheme.
The coalition of states said they would convene a next meeting in Saudi Arabia in the summer.
On Twitter yesterday, EU Climate Commissioner Connie Hedegaard challenged the opposing states to come up with “a concrete, climate-friendly alternative” to its aviation emissions-reduction scheme.
That no formal coordinated measures or actions were taken in Moscow, only states should “consider” them, was picked up the US NGO Environmental Defense Fund (EDF), who had previously protested at the involvement of the United States in the meeting. “Today’s failure to reach agreement on a coordinated attack indicates cooler heads may have prevailed and, if so, they are to be commended,” said Annie Petsonk, International Counsel at EDF.
She suggested the coalition had heeded recent comments by ICAO Secretary General Raymond Benjamin that an Article 84 intervention would distract ICAO in efforts to design and obtain a global agreement on market-based measures to address aviation emissions. “Had an Article 84 case been launched, that surely would have called into question the seriousness of the claims of the industry and some nations that they truly want a solution in ICAO,” she said.
Petsonk criticised the Moscow participants for not inviting civil society groups to the meeting in order to present “a balanced discussion”, believing the airline industry, through IATA, had been represented.
Following the meeting, the Association of European Airlines (AEA), which represents 33 scheduled network carriers, expressed concern over the implications for the industry with the threat of retaliatory action.
“This situation is totally unacceptable,” said Ulrich Schulte-Strathaus, AEA Secretary General. “Airlines must not be taken hostage by politicians or be forced to compete with serious market distortions. We urgently need both sides to focus on the core objective – managing global aviation emissions – rather than on winning a battle of sovereignty.”
He noted that although there were diverging views on the sovereignty implications of the EU ETS, both sides of the dispute broadly agreed that a global approach through ICAO was best.
“It is not right to attempt to force the EU to change their law,” he said. “Nor is it right to impose European standards on the rest of the world. ICAO is, without doubt, the way forward. Countries must move away from retaliation and counter-retaliation and instead come up with concrete, short-term actions towards a resolution. Then ICAO can deliver.”
A meeting of 30 countries opposed to the ETS has taken place in Moscow. 29 of them, but not India, agreed a declaration listing 8 retaliatory steps against the EU unless it excludes their airlines from charges when flying to or from Europe. These measures include legal action, suspending talks with European carriers on new routes, reviewing bilateral service and open skies agreements with European countries and imposing retaliatory levies on EU airlines. They can choose whichever they want. Connie Hedegaard says Brussels would not suspend the ETS for aviation. The next meeting of the countries opposed to the ETS would be held in summer in Saudi Arabia. EU officials have said they may be willing to “moderate” their stance on ETS, if a deal for an equivalent global system can be reached through ICAO. Airlines do not need to buy their carbon permits until April 2013.
Nearly 30 countries opposed to a European Union carbon tax on airlines, agreed on countermeasures that could trigger off a global trade war.
India, Russia, the U.S., China and 25 other countries meeting in Moscow adopted a declaration that lists eight retaliatory steps that may be taken unless the E.U. abrogates its law which requires airlines flying to Europe to pay for greenhouse gas emissions under the E.U. Emissions Trading System (ETS).
The potential measures include lodging court suits against the E.U., barring national airlines from participating in the ETS, suspending talks with European carriers on new routes, reviewing bilateral service and open skies agreements with European countries and imposing retaliatory levies on E.U. airlines.
Russia’s Deputy Transport Minister Valery Okulov said the signatory countries were free to choose which measures to use.
“Every country will pick the most effective and reliable measures that will help cancel or postpone the implementation of the E.U. ETS,” Mr. Okulov, told a news conference.
Mr. Okulov said Russia will apply two measures: it will ban its airlines from taking part in the ETS and will refuse to grant European airlines additional flights over Siberia.
China has already issued orders to its airlines not to participate in the ETS and the U.S. Congress is due to consider a similar ban.
Out of 33 countries that attended the Moscow conference, 29 signed the final declaration. Diplomatic sources said that India, like other signatories, was opposed to the unilateral E.U. move, and would decide which measures to take after its delegation returns to New Delhi on Wednesday.
Mr. Okulov expressed the hope that the E.U. would rescind its decision before next year when airlines would be required to pay the new tax. However, E.U. climate commissioner Connie Hedegaard said that Brussels would not suspend the rule requiring all airlines to buy pollution permits.
An all-out trade war could result in substantial increases in the cost of tickets as the number of flights to and from Europe could be reduced. Experts have estimated that for Russians air travel to Europe could become €5 to €40 more expensive.
Under the E.U. new rules, 85% of the airlines’ carbon permits in 2012 will be handed out for free, while 15% will be sold to airlines at auction. Certificates for one ton of emissions would cost €14 [current carbon price] ; the fine for ignoring the rule – €100 per ton and the companies that refuse to pay would be banned from crossing the E.U. borders.
The next meeting of the countries opposed to the E.U. law would be held in summer in Saudi Arabia.
Russian officials also said it was considering a ban on its airlines taking part in ETS – China has already ordered its airlines not to take part. Russia could also impose limits on EU-based airlines flying through its Siberian airspace.
The current price of a tonne of CO2 is about €8-9. Therefore the cost of the ETS to airlines is very much lower than they had previously estimated, based on a higher carbon price. Point Carbon has calculated airlines covered by the scheme will have to pay around €500 million for the required permits to cover a potential shortfall of 59 million tonnes of CO2 this year, at an average estimated price of €8.50 per tonne. This may end up being even lower, at €300 million, which is described as a “drop in the ocean” compared to fuel. The carbon price will probably be low next year too. Non-EU airlines will be expected to pay for just a quarter of the total EU ETS aviation costs in 2012, or around €75 million of the €300 million overall cost. So Point Carbon estimates Chinese airlines will have to pay about €1.9 million in 2012, not hundreds of millions of €s. The cost per passenger for a trans-Atlantic flight is about €2-3, and a Barclays Capital analyst is quoted as saying “it is really hard to see what all the fuss is about”.
Despite a rebound in the price of European carbon prices late last week, analysts at Thomson Reuters Point Carbon have halved their estimate made last September of the cost of the EU ETS to airlines.
Point Carbon has calculated airlines covered by the scheme will have to pay around €500 million ($660m) for the required permits to cover a potential shortfall of 59 million tonnes of CO2 this year, at an average estimated price of €8.50 ($11.25) per tonne.
Barclays Capital put the overall 2012 cost even lower – around €300 million ($400m) – which an analyst described as “a drop in the ocean” compared to the cost of jet fuel.
Meanwhile, Middle East carrier Etihad has announced a carbon surcharge of $3 per passenger for flights into and out of Europe from March 1, following similar surcharges being imposed by Qantas and major US carriers.
Research carried out by Point Carbon and consultancy RDC Aviation predicts aviation emissions covered by the EU ETS will be around 242 million tonnes (Mt) in 2012, compared with the 2004-6 baseline 221 Mt.
With the cap set at 97%, and 85% of the total allowances being allocated for free, this leaves the industry needing to purchase 59 Mt, reported Point Carbon senior analyst Andreas Arvanitakis at the recent Aviation Carbon 2012 conference. He added the €500 million bill could be considerably reduced still further if airlines properly planned their carbon strategies, for example by purchasing cheaper Certified Emission Reduction (CERs) units.
Arvanitakis said he expected the price for EU allowances (EUAs) to remain low and stable during Phase 3 (2013-2020) of the EU ETS and was currently forecasted to be around €12 per tonne based on the current overall 20% EU emissions reduction scenario, but added this would change if the overall cap was tightened.
According to the Barclays Capital analyst, non-EU airlines will be expected to pay for just a quarter of the total EU ETS aviation costs in 2012, or around €75 million ($100m) of the €300 million overall cost.
“With these costs likely to result in passenger fares going up by little more than €2-3 per transatlantic flight, it is really hard to see what all the fuss is about,” a Reuters report quotes the analyst.
If the forecasts prove correct then the airline industry’s estimates of 2012 EU ETS costs will have been greatly exaggerated.
Two months ago, IATA estimated the cost could be as much as €900 million in 2012, based on an average price of €13 per tonne, rising to €20 or much higher in 2020. China’s air transport association puts the 2012 EU ETS bill for its member airlines alone at about 800 million yuan, around €95 million.
Earlier this month, Qantas Airways said it was estimating it would have to pay A$2.3 million ($2.47m or €1.85) in 2012 for its necessary EU ETS allowances and from February 15 would be adding a surcharge of A$3.50 ($3.76 or € 2.82) each way to fares for flights to and from London and Frankfurt. At the same time and on the same routes, the airline said it would be increasing its fuel surcharge by A$60 ($65 or € 48.75) per passenger per flight.
The total fuel surcharge on its European flights now stands at A$350 per flight.
Carbon costs will also be applied to the airline’s domestic routes from July 1 as the Australian carbon pricing system comes into effect with a starting price of A$23 ($24.70) per tonne, a level that will remain until 2015. The estimated cost impact on the Qantas Group (which includes Jetstar) is in the region of A$110-115 million ($118-124m) in 2012/13.
The cost pass-through for Qantas and QantasLink services will be based on flight sector length, with surcharges ranging from A$1.82 to A$6.86 per passenger per sector. Jetstar is adopting a different policy of increasing fares by a flat A$10 to include both fuel and carbon prices.
“The additional cost of carbon isn’t something we can absorb. As a result, we have decided to be transparent in providing our customers with the actual details of what that cost will be on top of their ticket,” Qantas’ Group Manager Environment and Carbon, Andrew Sellick, told the Aviation Carbon 2012 conference. “We will be passing on the actual cost – there is no profiting whatsoever, so from an EU ETS perspective it is after taking into account our free allowances.”
He added that the EU ETS carbon surcharge would be reviewed regularly depending on EU carbon prices but conceded that it may not always be possible to pass on the full cost in future due to strong competition on the European routes.
Announcing a $3 per passenger EU ETS surcharge for flights into and out of Europe and a 3 cents per kg for cargo shipments, Etihad Airways CEO James Hogan said the airline was strongly opposed to the EU scheme.
“We have invested many millions of dollars to ensure we operate a young and highly efficient fleet but are still being penalised,” he said. “Our efficiency is reflected in the relatively low additional charge and we will continue to be transparent in keeping our customers fully informed of this carbon charge.”
Without specifically naming the EU carbon scheme as the reason, major US airlines announced last month they would be imposing a $3 surcharge on flights to and from Europe (see article).
A recent paper by MIT’s Department of Aeronautics and Astronautics said the economic impact of the EU ETS on US airlines is likely to be small.
£76m potential emissions trading bill in 2012 for top 20 UK registered airlines tiny compared to fuel subsidies of £8.9bn
posted by Rob
23rd Feb 2012 (Sandbag)
The inclusion of aviation emissions into the EU emissions trading scheme (ETS) sees airlines paying for the green house gases emitted during flights. Starting from the 1st January 2012 all flights taking off from and landing at airports in the European Union have to surrender emissions permits to match volume of emissions produced during the flight. In 2012 airlines will be given 85% of their allowances for free, falling to 82% annually from 2013 to 2020. The UK is a key European aviation hub and all airlines landing and taking off here will be affected by the new environmental legislation.
In a briefing on aviation and the EU ETS Sandbag have calculated that the potential cost to the top 20 airlines in the UK – accounting for 28% of total emissions captured in the trading scheme – will be around £76m in 2012.
Aviation receives a subsidy by not having to pay any tax on their fuel which gives it a competitive advantage over for example rail. Sandbag estimates that this subsidy saves these same 20 operators around £8.9bn per annum.
Despite the scale of the financial impact being dwarfed by on-going subsidies, resistance to the inclusion of aviation emissions into the ETS has been fierce. There is growing pressure on the EU from, airlines, aviation trade groups and countries – notably the USA, China and India – who object to the EU taking action unilaterally.
Airlines and trade groups alike have reiterated the need for a global solution to dealing with growing emissions from the aviation sector, nevertheless, the International Civil Aviation Organisation’s (ICAO) has failed to implement a global emission reduction framework for the sector. Voluntary commitments by ICAO to achieve a global annual average fuel efficiency improvement of 2% until 2020 have been deemed insufficient by the EU.
The EU’s inclusion of aviation in the ETS serves as a good framework for other countries to take action to curb rising emissions from the aviation sector. Care has been taken to protect rapidly growing airlines and those serving low volume routes.
The ETS also contains provisions to exclude counties that are implementing ‘equivalent measures’.
Looking at the UKs top 20 emitting airlines it’s possible to estimate how much the EU ETS will cost airlines in 2012 versus a theoretical tax on Kerosene:
Top 20 UK registered airlines emitted 59.6m tonnes CO2 in 2012. Top 20 UK registered airlines likely to face a 2012 ETS bill in the region of £76m An alternative tax on kerosene could cost up to £8.9bn in 2012 for the UKs top 20 emitting airlines
China’s airline CO2 costs greatly overstated: analysts
3 Feb 2012 (Point Carbon)
Europe’s carbon market will cost China’s top airlines a total €1.9 million ($2.6 million, 16 million yuan) this year, a fraction of the 800 million yuan that Chinese airlines say they will have to fork out to comply with caps, Thomson Reuters Point Carbon analysts said.
Almost 15 years after Kyoto protocol assigned responsibility for dealing with aviation’s CO2 to ICAO, there is finally a sense of urgency. The EU has offered to exclude flights coming into Europe from the ETS if ICAO comes up with a global deal better than Europe’s initiative. T&E asks what would a credible global deal on aviation emissions look like? It would have to have three features:
1. A global market-based measure should be based on fuel use or emissions, not on the amount of passengers or freight.
2. It should reduce aviation emissions & substantially contribute to global climate finance. The current ETS price of €7/tonne CO2 fails.
3. It must work for vulnerable countries as well as for the climate. Some revenue could compensate poor countries for the impact of air travel & pay a global climate fund.
If you listen carefully through the cacophony surrounding the inclusion of aviation in Europe’s Emissions Trading System, there is progress. Important progress.
The verdict of the European Court of Justice cleared the legal hurdle, which even more clearly exposes this fight for what it really is: a political power struggle between the most important economic blocs on the planet.
The entry into force of the scheme on 1 January 2012 prompted a score of airlines to announce increases in their fares, confirming economists’ predictions that costs would be passed on, but more importantly, making any suspension of the scheme all but impossible. If this happened, imagine the series of lawsuits of angry consumers wanting their money back!
And last but not least, aviation’s entry into the ETS has prompted Icao to set itself a deadline to come forward with a global scheme by year’s end. Almost 15 years after the Kyoto protocol assigned responsibility for dealing with aviation’s climate impact to Icao, there is finally a sense of urgency in the air. Icao has convened a set of emergency meetings over the next months to discuss – once again – emissions levies and emissions trading. In line with tradition, the aviation industry has a seat at the table and civil society does not, despite our insistence on equal treatment.
The EU has wisely reacted by offering a huge carrot: if Icao does indeed come through with a global deal that is better than Europe’s initiative, Europe is more than happy to change the most controversial aspect of its law: the inclusion of flights coming into Europe.
Some developing and emerging countries (and oil exporters of course) will cry foul at a global solution, saying they should not be held responsible for aviation emissions, referring to the Kyoto-era principle of ‘common but differentiated responsibilities’ that divides the world into countries with and without reduction obligations. That black-and-white division has never really worked in aviation: it would for example exempt Singapore and Dubai, two of the biggest aviation hubs each with a very global airline. Global developments in the past 14 years have made this principle ever less credible, and indeed the Durban climate conference ended with the ambition to strike a deal that binds everyone. Icao came up with the idea of exempting all countries with less than a 1% contribution to global traffic. This does not work either, because it would exclude 169 of Icao’s 191 member countries and lead to huge distortions, not least in Europe.
So what would a credible global deal look like? It would have to have three features:
First, in order to be environmentally effective, a global market-based measure should be based on fuel use or emissions, not on the amount of passengers or freight.
Second, it should be significant enough to reduce aviation emissions and substantially contribute to global climate finance. The current ETS price of €7 per tonne of CO2 clearly fails in this respect; we can only hope the politicians who have set it up now vote to make it really work.
Third, everything should be done to make the deal work for vulnerable countries as well as for the climate. There are various ways to achieve this. Part of the revenues could be used to compensate poor countries for the impact of air travel. A recent World Bank report says that would claim about 40% of revenues. Another significant part of the revenues should go into a global climate fund to contribute to the $100bn pledge made at the Copenhagen climate conference. Another option is a clever de minimis scheme, i.e. an exemption for low-traffic routes to vulnerable destinations. The EU’s ETS already has such a scheme – it’s not perfect but way better than Icao’s 1% formula mentioned above.
The ball is now in Icao’s court. It should play it.
@AirportWatch
