Airlines and IATA blast EU ETS decision

New Delhi: The International Air Transport Association (IATA) has blasted the decision of the European Council of Justice and Home Affairs Ministers for rubber stamping and sealing into law Europe's decision to bring air transport into the European Emissions Trading Scheme (ETS) from 2012.

''Crisis is not the time for rubber stamps. But that is exactly what the Council of Justice and Home Affairs Ministers used today-without a word of debate-to seal into law the EUR 3.5 billion cost of bringing airlines into the European ETS.   It's Brussels acting in a bubble-even in the middle of a global economic crisis,'' said Giovanni Bisignani, IATA's director general and CEO.

The EU is trying to counter the aviation industry's small but rapidly-growing contribution to climate change though a legislative proposal it issued in December 2006 to include the sector in the EU's emission trading scheme (EU ETS). 

The proposal seeks to impose a cap on carbon dioxide (CO2) emissions for all planes arriving or departing from EU airports, even though it allows airlines to buy and sell 'pollution credits' on the bloc's 'carbon market'.  On 24 October, just ahead of the weekend, EU justice ministers accorded their approval to a deal between the Council and Parliament earlier this year in June. This deal will require all flights - both internal to the EU as well as international ones - to participate in the Union's carbon cap-and-trade scheme from 2012.

The EU plans to achieve its agreed long term target of cutting total carbon dioxide emissions by 20 per cent by the year 2020. However, the EU's decision to approve the proposal into law without discussion in the face of the global economic downturn that was set off by the financial crisis in the West was severely criticised by international airlines.

''IATA does not oppose emissions trading. Positive economic measures are part of the industry's four pillar strategy to address climate change. Along with economic measures, we need to improve efficiency with technology, operations and infrastructure.  While Brussels has been fast to introduce its regional ETS scheme, it has been slow to improve efficiency. We need the same urgency to deliver an effective Single European Sky that would save billions of Euros in cost and 16 million tonnes of CO2 annually. That we have been waiting decades for this is Europe's biggest environmental embarrassment,' said Bisignani.

Bisignani highlighted the need for a global approach that is fair and effective. 

''In the most recent G8 declaration, Prime Minister Berlusconi, Prime Minister Brown, Chancellor Merkel and President Sarkozy  supported ICAO's leadership to deliver a global solution for aviation and the environment. Now we need to see some supporting action. The best way to a global solution is through ICAO's Group on International Aviation and Climate Change (GIACC). Brussels must support the success of this process,'' said Bisignani.

Earlier, Bisignani said ''Crisis is not the time for rubber stamps. But that is exactly what the Council of Justice and Home Affairs Ministers used today - without a word of debate - to seal into law the €3.5 billion cost of bringing airlines into the European ETS. It's Brussels acting in a bubble - even in the middle of a global economic crisis." 

IATA also noted the inclusion of aviation in Europe's general review of its ETS programmes.  

''Reviewing the effectiveness of emissions trading where programmes have been operational has value. But what enlightened decisions can we expect from a review that will conclude even before today's decision takes effect in 2012?'' questioned Bisignani.  

''Far better that we address this on the basis of experience than speculation.''

European airline traffic has been dropping on account of the recent downturn in the world economy for the first time since the 1980s, according to the Association of European Airlines (AEA), (not including events such as 9/11). Bottom lines of almost all involved in the aviation business are under pressure. 

AEA secretary general Ulrich Schulte-Strathaus was quoted as saying that the numbers are unlikely to improve in the near future as the economic slowdown kicks in amidst inflation, powered on by high fuel prices and a steep decline in business and consumer confidence. 

He was quoted as saying that the EU's timing could not be any worse, and that the haste in finalising the programme without any impact assessment with the design elements of the Emissions Trading Scheme, which high auctioning levels have transformed into a barely disguised kerosene tax.

He said that this added to a proliferation of national taxes would make both the airlines and the passengers pay for their ''carbon footprint several times over." 

Airlines as well as other energy intensive industries have been trying to get the EU to see their viewpoint by saying that the EU plans to tighten its carbon 'belt' will close shop for many European factories as companies would have no option but to evacuate their operations and jobs. The beneficiaries are likely to be countries with cheaper labour and less restrictive environmental legislation.

The looming recession seems to be weighing down on airlines, with a number of nations voicing concerns for industry exemptions to planned EU climate rules. EU legislators and environmentalists argue that the looming recession should not be used as an excuse to stall the EU's climate efforts, saying that while economic crisis wear themselves out, the climate crisis is here to say, and has to be faced.

Amongst the proposed compromises between the EU and industry groups is a plan that will allow the EU to continue on its path to save the climate from change, while it increases support to industry. A week ago, the EU leaders said they would consider a financial support plan to help the auto industry move technologically to a low-carbon economy. Reports suggest that similar air programmes should be applied to other industries as well.