Air Transport

Proposals to include aviation into the European Union emissions trading scheme (ETS) are "costly" and "unworkable" according to a group of air transport associations.

In a recent study by consultancy firm Ernst & Young, six European air transport associations argued that the current proposal to include aviation into the ETS will jeopardise the long-term viability of the European industry.

The six European bodies, which represent a broad cross section of Europe’s airlines, welcome the inclusion of aviation in the EU ETS, but have called for the European council and parliament to revisit the assumptions on which the ETS proposal is based.

The group says: “The independent impact assessment shows that the European Commission has based its proposal on unrealistic assumptions. It dangerously underestimates the wide-ranging repercussions of the proposal on European aviation.”

Commenting on the report findings, the bodies claim that only a third of the costs of the scheme will be recoverable from passengers and shippers rather than the majority claimed by the Commission. They also say the industry is more price-sensitive than assumed by the Commission, leading to potential lost business.

Under the proposals aviation will have to purchase allowances to cover up to 45% of its emissions by 2022.

The groups says this makes it the only sector in the scheme to pay for its growth, and they argue will reduce the sector’s ability to invest in environmentally-friendly technology.

Costs of purchased fuel allowances will be substantial, claim the group, totalling an estimated €45 billion over the period 2011-2022.

Aircraft operators’ profitability will be cut by more than €40 billion over that timeframe, weakening their financial stability and affecting smaller players with relatively little environmental impact.

The airline bodies also reiterate their concerns that the move will put European operators at a competitive disadvantage against their non-European counterparts.

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