Air Transport

The European Commission has admitted that aviation’s inclusion in the European Union’s carbon dioxide emissions trading scheme (ETS) is likely to slip from its 2007 target, as it faces possible legal challenges by US airlines.

Speaking at the International Air Carrier Association’s (IACA) annual general meeting in Palma de Mallorca, Peter Gammeltoft, head of unit for air transport within the EC’s directorate general for the environment, said national governments are expected to give the green light to the proposal to extend ETS to air transport, but that final entry into law could be as late as 2009.

Last week, airlines, airports, national governments and other stakeholders gathered in Brussels for the first working group to hammer out details of the scheme. Insiders described the initial meeting as “chaotic” and “bad tempered” as environmentalists clashed with transport ministers and representatives from power generators. The working group has to define the scope of the scheme (which flights are covered) and allocation methodology (how to calculate carbon burned and greenhouse gases emitted).

The definition of scope looks to be the most controversial, with carriers in the USA questioning the legality of any charges even for intra-EU sectors. The EC is studying applying the scheme to flights within the EU, all those departing EU airports or any flight that includes EU airspace. Gammeltoft says: “We would like to have as wide a scope as possible, for environmental reasons. We’d also like to avoid any impact on competitiveness for European carriers.”

However, if applied to all flights touching the EU, the ETS could be challenged as a breach of bilateral air services agreements and the Chicago Convention, which prohibits taxation of aviation fuel, Gammeltoft says. However, he believes that the lengthy International Civil Aviation Organisation appeal process and arbitration will deter all but the most politically motivated carrier. Additionally, since the scheme would only oblige airlines to buy additional carbon credits when expanding, the EC does not view it as a compulsory charge. But the risk of a US government-backed challenge is being assessed. “We will have to take the risks and likelihood of legal challenges into account when deciding the scope,” says Gammeltoft.

JUSTIN WASTNAGE/PALMA DE MALLORCA