Lufthansa lambasts implementation of EU’s emission trading scheme

Lufthansa has sent out warning signals regarding implementation of the European Union's Emission Trading Scheme (ETS) in the aviation industry saying that "too many problems remain unresolved." It further said prospects were that the initiative would be a "fiasco" when it went into effect at the beginning of next year.

"All of the scheduled deadlines have so far been missed and numerous legal and technical questions remain unanswered-just as 2012 tickets are beginning to go on sale and only eight months before the 'official kick-off'," Lufthansa said in its latest "policy brief" issued Monday. "The aviation industry therefore still has no way of knowing what the major economic parameters will be."

Pointing out that the EU directive mandating airlines' inclusion in the ETS was supposed to be enacted into law by each of the body's member nations by February 2010, "Yet most governments have so far failed to do so owing to the complexity of including the international transport sector in emissions trading," the statement said. "It certainly cannot be said that the directive is being implemented in a uniform manner which preserves competition."

One major problem, Lufthansa points out, is that emission allowances are based on 2010 traffic figures. "However, that year was marked by airspace closures due to the volcanic eruption in Iceland. The result will be significant distortions in the allocation process," the airline stated. "The European Commission must urgently abandon this benchmark and present a fair solution once and for all."

The statement also said that the issues surrounding the ETS "are exacerbated by the continued lack of clarity" on whether it is legal to impose the scheme on non-EU carriers. "Numerous non-EU states have announced that they will withdraw from the emissions trading scheme and it is still not known how the EU will deal with these [attempts to reject the ETS]. The European Commission is considering simply revoking the traffic rights of airlines, a highly dubious move."