Air Transport

A potentially divisive split over the scope of the proposed European Union emissions trading scheme (ETS) has emerged, with international aviation bodies counselling a limited intra-European pilot, while the continent’s low- cost carriers insist it should extend to those carriers flying outside the EU.

The EU launched its greenhouse gas emission trading scheme early last year targeting heavy industry. While the plan originally excluded aviation, European governments now feel secure enough to work towards including it.

Speaking at a European Aviation Club emissions seminar in Brussels, International Air Transport Association policy manager Andreas Hardeman said competitive distortion remained a sensitive issue and that a limited scheme within EU airspace would increase “acceptability” of an extended ETS. “In order to minimise such distortions, the EC should start with the inclusion of intra-EU flights only. IATA cannot support inclusion of flights to or from third countries at this point.”

Proposals for an extended ETS have already met fierce opposition from the USA. It says the EC may be breaching the 1944 Chicago civil aviation convention if it includes emissions from flights by non-EU airlines from EU airports. “In order to lower legal and political barriers, IATA would strongly advise the EC to seek prior agreement with third countries,” said Hardeman.

EasyJet business development manager Chris Essex, representing the European Low Fare Airline Association (ELFAA), pointed to a new ELFAA-commissioned report, which warns that a limited intra-EU trading scheme would affect its members’ short-haul networks. “We have to recognise that there are different business models in the airline industry,” he said.

“An EU-only ETS would lead to an average 5-8% increase in prices and could lead to a reduction in passenger demand of up to 12%. A full-service carrier would meanwhile suffer a reduction of up to 3%,” Essex added.

The ICAO Committee on Aviation Environmental Protection is due to deliver its guidance on emissions levies at the next ICAO regular session in February 2007. The EC has formed a stakeholder working group to examine an effective ETS and devise a formula for charging extra-EU operations.