Industry Committed to Emissions Reductions
Europe Should Abandon Misguided ETS Plans
27 September 2011 (Hong Kong) - The International Air Transport Association (IATA) reiterated the air transport industry’s commitment to its ambitious agenda to reduce CO2 emissions and urged the European Union (EU) to abandon its misguided plans to include aviation in the EU Emissions Trading Scheme (ETS) commencing in 2012. IATA invited governments to join industry as committed partners in a global approach to reducing aviation’s carbon emissions that could also include a global ETS or other compensation measures.
“The industry’s value chain is united around ambitious targets and a clear strategy to reduce its carbon footprint. To achieve the positive economic measures, technology improvements, more efficient infrastructure and better operations necessary to meet our targets, governments need to be much more proactive stakeholders and real partners,” said Tony Tyler, IATA’s Director General and CEO in a speech at the Greener Skies conference in Hong Kong.
Airlines, airports, air navigation service providers and manufacturers are committed to improving fuel efficiency by 1.5% annually to 2020, capping net carbon emissions from 2020 with carbon-neutral growth and cutting net emissions in half by 2050, compared to 2005.
“These are challenging targets. Airlines represent 2% of global manmade CO2 emissions. This year that is estimated to be some 650 million tonnes of CO2 emitted while carrying 2.8 billion passengers and 46 million tonnes of cargo. By 2050, the industry aspires to carry 16 billion passengers and 400 million tones of cargo with some 320 million tonnes of CO2 emissions,” said Tyler.
The industry has agreed on a four-pillar strategy to achieve emissions reductions that has also been endorsed by governments through the International Civil Aviation Organization (ICAO). The four pillars are (1) investments in technology, (2) more efficient infrastructure, (3) more efficient operations and (4) positive economic measures.
“IATA is not opposed to emissions trading. We support the concept 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. It is distracting governments from focusing on the real solution—a global approach through ICAO,” said Tyler.
Tyler noted that the EU’s plans challenge national sovereignty. “Europe’s plans contravene international law with the extra-territorial application of taxes. What right does Europe have to charge an Australian carrier for emissions over China? It is an attack on sovereignty that is being challenged by governments. China, India and the US are among states formally opposing the EU ETS. And the US is even processing a bill that will prohibit its carriers from participating. While the EU sees its actions as supporting a positive environmental agenda, the rest of the world sees it as an attack on sovereignty,” said Tyler.
The EU’s plan has several other flaws:
· Distorted markets. Connections via hubs closer to Europe will have a competitive advantage. “Think of it from the perspective of Hong Kong. A direct flight to Europe will be charged on its emissions for its entire journey. But a connection through the Middle East or other closer hubs will be only charged for the last leg of the journey. This is an unacceptable market distortion,” said Tyler.
· It will lead to a layering of taxes. Failure to coordinate in a global scheme will lead to a layering of taxes and air passengers could be faced with the burden of compensating for their carbon emissions several times over. “We already see it in Europe with the UK Air Passenger Duty and copycat departure taxes in Germany and Austria. All were implemented using environment as the justification. But there is no guarantee that any will be eliminated when the ETS takes effect,” said Tyler.
· Allocation of funds: “There is absolutely no guarantee that any of the monies collected will be used for environmental initiatives. It is simply a punitive tax,” said Tyler.
“Managing carbon emissions is a global problem. Aviation is a global industry. And we need a global solution. All roads lead to ICAO. It is time for Europe to refocus on a Plan B that is centered on a global solution through ICAO,” said Tyler.
Tyler also responded to EU Climate Action Commissioner Connie Hedegaard’s comment that the issuing of free ETS allowances would enable aviation to invest 20 billion Euros in clean technologies between now and 2020. “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. Aviation cannot afford expensive regional mistakes - all parties urgently need to get back around the table to agree a global approach under the leadership of ICAO,” said Tyler.
Governments Must be Partners in Reducing Emissions
“While we support emissions trading as a possible option in the medium term, our long-term vision is to reduce emissions, not pay for permits. Economic measures are a medium term tool until technology, operations and infrastructure solutions are fully developed. And to do so, we need governments to support and strategically invest in more efficient infrastructure and low carbon technology,” said Tyler.
Air Traffic Management
IATA is working with industry and government partners to deliver emissions reduction through more efficient operations. Most recently the iFlex initiative to formalize more efficient air traffic management on the Johannesburg to Atlanta route resulted in per flight savings of 2.9 tonnes of CO2 and 8 minutes flying time. Several projects in the Asia-Pacific region have similar goals. For example, IATA is working to introduce more flexible routes over the Pacific that will shorten flying times by 10 minutes and save 750,000 tonnes of CO2.
“And we are thinking even bigger. Along with the air traffic management mega-projects of NextGen in the US and the Single European Sky with its promised 16 million tonne CO2 reduction, it is time for Asia to start thinking of a Seamless Asian Sky. The region is growing rapidly. Coordinated efforts now by industry and government will avoid a future mess that will be costly to fix,” said Tyler.
Sustainable biofuels for aviation are a rapidly evolving. At least six airlines have carried commercial passengers on flights powered by biofuels. Over their lifecycle, sustainable biofuels could reduce the industry’s carbon footprint by up to 80%.
“Biofuels could be a game changer. But despite the quick progress to date, some major hurdles still remain, such as bringing big oil on board and getting the policy framework of fiscal and legal incentives to encourage their commercialization. We need positive economic measures that result from strategic government decisions to support the growth of green economies - including aviation,” said Tyler.
Speaking in Asia, Tyler noted the potential of biofuels for the region. “The partnership of Air China, Petro China and Boeing in a biofuels program is significant. The combined resources of these companies make this an important step forward. Governments in the region should seize the opportunity to develop sustainable biofuels industries that could generate new economic opportunity across the region. It’s time for governments to seize this fantastic opportunity to stimulate the growth of green economies,” said Tyler.
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· IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
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