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The battle over clean European skies

The battle over clean European skies

By Hpanchal on September 27, 2011

CONSEQUENCES LOOM

Representatives from the National Airlines Council of Canada and IATA filed written observations in the U.S. carriers’ court case. In the document, officials detail what impact the new law will have on the aviation industry. The cost of compliance seems to be a big sticking point, with money going to the EU instead of being devoted to new, environmentally conscious technology.

“The costs imposed, moreover, could actually lead to an increase in aviation emissions. By diverting revenues from the airlines, the EU ETS will, if anything, actually slow down the replenishment of their fleets with more fuel-efficient and GHG-friendly airplanes,” attorneys representing IATA and the NACC wrote.

In an added wrinkle, the attorneys brought up a few unintended consequences of the law. They wrote that carriers may simply choose to fly their most fuel-efficient planes into the EU, reserving older members of their fleet for other routes. Instead of solving the carbon-emission issue, this just pushes it off on other countries.

Finally, the attorneys believe, carriers will simply change their routes in order to be less vulnerable to the environmental changes. The ETS only applies to the last leg of the flight coming into the EU or the first leg leaving Europe, so carriers could simply add another stop to their flights. “Because airlines will only have to purchase allowances for those flights using EU airports, long flights to Europe will more frequently be routed through Middle Eastern and other nearby, non-EU hubs,” the attorneys wrote. “The EU ETS, then, actually creates perverse incentives for inefficiencies that could increase overall GHGs.”

AAPA’s Herdman agrees that there will be a few unforeseen consequences to the EU ETS. The new law could impact trade with Europe or could affect Toulouse, France-based Airbus’ business. Of course, the threats of individual carriers could be so much bellyaching, but then again, these words might have a real impact on the health of Europe moving forward. “A number of countries have indicated that they view this as a trade dispute,” he says. “That leads to retaliatory measures that may be related to the same industry, or they might be totally unrelated, but simply targeting interests from whatever state is in the crosshairs.”

Herdman concludes that if the EU ETS is enforced as it currently stands on the books, the aviation industry will owe the EU a lot of money. “It’s pretty clear that the total number of emissions will still grow for aviation even if other sectors are able to shift to non-carbon-based fuels and thereby ease their emissions,” Herdman says. “As a sector, we’re likely to be net buyers of certificates.”

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