Fri 6 June 2008 – Associations representing European airlines have queued up to condemn last week’s vote by the European Parliament’s Environment (ENVI) Committee to hold fast to its original proposals on the inclusion of aviation into the EU Emissions Trading Scheme. Airlines have described the Committee’s strict position on allowances and capping as “punitive”, whereas environmental campaigners have welcomed the vote.
The European Regions Airline Association (ERA) led the attack on the MEPs. “Europe’s citizens need to be aware that their interests are not always well-served by certain sectors of the European Parliament. European air transport already has to bear record high fuel prices and the proposals supported by the Environment Committee would, if enacted, be catastrophic for many intra-European air services. Conversely, they would yield negligible environmental benefits,” said Mike Ambrose, ERA’s Director General. “The original proposals put forward by the European Commission have now been hijacked by extremism in the Committee.”
The vote has highlighted the differences between Parliament and its co-legislator, the Council of Ministers. The main points of contention are:
· MEPs want 75% of allowances to be free when aviation enters the ETS, with all to be paid for by 2013; the Council wants 90% to be free and no commitment to ending free allowances.
· MEPs want the limit on airline emissions to be set at 90% of what they were in 2004-6 up to 2012, with an agreement now on further reductions for the period 2013-20; the Council wants the level set at 100% of 2004-6.
· MEPs want a ‘multiplier’ requirement whereby airlines must buy two permits for every tonne of CO2 emitted because of the additional climate impacts – so-called radiative forcing – caused by aviation; the Council and the Commission want further studies on the issue carried out first.
· MEPs want revenues generated by the sale of allowances earmarked for environmental research and investment; the Council of Ministers and national governments are opposed.
“The ETS could be a potentially effective tool to address CO2 emissions,” said Peter Hartman, Chairman of the Association of European Airlines and CEO of KLM. “However, the airline industry is undergoing fundamental changes in its business environment. It makes no sense whatsoever to forge ahead with a scheme designed for a business model which is changing out of all recognition. Rather than rush into ill-considered measures, it is imperative that our policy-makers take into account these new circumstances and properly evaluate the impact of their proposals.
“The ETS has been shaped by the misconception that aviation is the fastest-growing source of CO2 emissions. This was never the case, and is even less so now. I sincerely question whether our emissions will be growing at all in the foreseeable future. The evolution of ETS has been based on long-term extrapolation of trends which no longer exist, and are not expected to reappear.”
Sylviane Lust, Director General of the International Air Carrier Association, which represents airlines serving the leisure industry, called the MEPs’ proposals a “destructive package” and said: “We are appalled at the extremism of the ENVI Committee in adopting such a radical ETS design. Voting for such a scheme in the context of today’s high fuel prices and economic downturn is a sign of ignorance, or denial, of the economic realities facing airlines today.
“We call on the European Council to hold firm on their common position which already sets ambitious targets for the airline sector to address their environmental responsibilities.”
The European Low Fares Airline Association (ELFAA) called on MEPs to be true to the intention of ETS and use it to cap emissions and not raise revenue. John Hanlon, Secretary General of ELFAA commented: “There is a huge risk that the legislation will impose unnecessary costs that do nothing to achieve its environmental objectives. The European Parliament must refrain from imposing costly measures that have no environmental benefit but could deprive airlines of the financial means to invest in new planes. Europe needs strong airlines that can afford to invest in the latest technology to reduce emissions.
“Low-fares airlines have been very supportive of the idea of bringing aviation into the EU ETS and fully agree with the environmental objectives of the proposal. However, the European Parliament has to realize that the wrong outcome could make it harder for aviation to achieve its environmental goals.”
In a letter to the European Commission, European Parliament and UK ministers, British Airways’ Chief Executive Willie Walsh said: “These legislative proposals will all place a disproportionate burden on European airlines, with a consequent loss of competitiveness, and therefore jobs. We cannot take our aviation industry, and the economic benefit it brings, for granted.
“This is especially pertinent when considering the level of auctioning to be applied to aviation within the EU Emissions Trading Scheme. Our support for the inclusion of aviation into the EU ETS is being severely tested as the potential price of our inclusion is rising exponentially with no environmental justification.
“British Airways is willing to account for its external impacts. However, in the face of increasing competition and a global economic downturn, we will not be able to accept or withstand a continued series of uncoordinated fiscal penalties, some of which bring little or no environmental benefit.”
The airline estimates the MEPs’ changes to the original Commission proposals will increase the cost of the scheme for EU airlines from 45 billion euros ($70bn) to 115 billion euros ($180bn) over the first 11 years.
However, the MEPs on the Environment Committee found support from environmental NGOs, although many feel even the Committee’s proposals do not go far enough. “What is clear is that Parliament is not just wanting stricter standards, but a set of standards that will actually reduce aviation’s environmental impact,” said European Federation for Transport and Environment policy officer João Vieira. “The terms ministers and officials want for airlines will do little or nothing to reduce aviation’s environmental impact. We now need leadership from our MEPs.”
Friends of the Earth (FoE) Transport Campaigner, Richard Dyer, said: “We are delighted that MEPs have voted in favour of strengthening plans to bring aviation into the ETS. Air travel is one of the fastest growing sources of carbon dioxide emissions in Europe – it must be tackled if we are serious about combating global warming. EU ministers must now show that Europe is genuinely committed to taking a lead on global warming by backing these proposals too.”
FoE also contends that in addition to the ETS, Member States should maintain or introduce other measures, like taxes, to address the climate change impact of aviation.
A fuller report on the Environment Committee’s proposals was covered in a recent GreenAir Online article following an interview with its rapporteur, Peter Liese.
During the course of this month, representatives from Parliament and the Council will meet to hammer out an agreement before a second reading of the directive takes place before the full Parliament early in July.
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