IATA has rejected suggestions by the European Union that the issuing of free emissions permits to airlines under Europe's emissions trading system (ETS) will enable airlines to invest €20 billion ($27 billion) in clean technologies.

In unveiling the EU's plan to award 85% of emissions allowances to aircraft operators free of charge in the first year of ETS, dropping to 82% in the 2013-20 period, EU climate action commissioner Connie Hedegaard yesterday said that the free allowances would permit airlines to invest €20 billion over the next decade in modernising their fleets and improving fuel efficiency.

But IATA director general Tony Tyler today responded: "If that were the reality, we wouldn't be complaining. But it's not.

"The well-known fact is that airlines will be net purchasers of carbon emissions permits for the foreseeable future. The starting cost is $1.2 billion in 2012. To put that into perspective, the industry's projected 2012 profit is $4.9 billion."

IATA is calling for the EU ETS to be scrapped in favour of finding a global solution through ICAO.

"We support the concept [of emissions trading] as a possible mechanism for the fourth pillar of our environment strategy. But the EU's unilateral and regional approach to ETS could not be more misguided," said Tyler.

"It is distracting governments from focusing on the real solution - a global approach through ICAO."

Source: Air Transport Intelligence news