Showing posts with label Green aviation. Show all posts
Showing posts with label Green aviation. Show all posts

Aviation and the Emissions Trading System: Will Europe Fail?

5:49 AM nero
Europe adopted a unilateral approach to including international aviation to its own regional Emissions Trading Scheme , a move which has ruffled many feathers especially of the powerful players in China, Russia and the United States. This week, China directed its airlines not to participate in the EU ETS.

The China Aviation Administration of China (CAAC) said the EU-ETS could hit Chinese carriers with additional carbon emission charges of up to RMB 17.6 billion ($2.8 billion) by 2020 and urged Chinese airlines not to pay a charge on carbon emissions imposed by the EU. The body also barred them from hiking freight fees or adding other fees accordingly without government permission.

Emissions Trading System: Will EU Fail?
 And now China has partnered with 25 other nations to oppose the EU ETS scheme, including Russia. At best, countries are likely to undertake retaliatory measures against EU airlines in their various markets resulting in a market distortion and more charges for airlines and travelers. Most countries support the global sectoral approach under International Civil Aviation Organization(ICAO) that ensures aviation emissions are accounted for only once but the EU decided to add aviation to its ETS citing slow progress at the CAO led process. It seems as opposition stiffens and country's resolve to countermeasures, a sort of trade war emerges and the EU's stance will be not be sustainable in the long term.

Many countries view EU's inclusion of their airlines into its ETS as a sort of "colonial" arrogance where Europe's still feels it can violate other countries' sovereignty and impose taxes on their airlines as it wishes. With opposition now being led by China, the United States and Russia, the opposition can only stiffen as many weaker countries, particularly those in Africa, Latin America and Asia, will be emboldened to challenges Europe's ETS. Europe will likely fail and something has got to give.

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Emissions Trading System: Europe Isolated

10:32 AM nero
The EU has been further isolated from the world by last month’s ruling to include aviation in the Emissions Trading Scheme (ETS) by the Court of Justice of the European Union (CJEU) according to Airlines for America (A4A). “This further isolates the EU from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change,” A4A said in an initial reaction.

A4A said the CJEU “did not fully address legal issues raised and has established a damaging and questionable precedent by ruling that the European Union can ignore the Chicago Convention and other longstanding international provisions that have enabled governments around the world to work cooperatively to make flying safer and more secure, and to reduce aviation’s environmental footprint.”
Hot Issue: The Emissions Trading System(ETS)
 A4A, together with two of its members—United Continental and American Airlines—initiated the legal challenge to the EU’s inclusion of aviation in its ETS in 2009 and said it will review its options to pursue in the English High Court.

IATA said it was disappointed at the CJEU’s ruling to uphold EU plans to include international aviation in its ETS from 2012 and noted the decision represents a “European legal interpretation of EU ETS.”
“The CJEU decision may reflect European confidence in European plans. But that confidence is by no means shared by the outside world where opposition is growing,” IATA’s DG and CEO Tony Tyler said.

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South Africa puts a finishing touch on its own carbon Taxes as Airlines adjust to the EU ETS

1:53 AM nero
South Africa is moving ahead with its own plans to introduce carbon taxes later in the year, a situation which will complicate matters and cut into the profits of the country's airlines, particularly South African Airways which will be forced to pay double carbon taxes now that it has to face Europe's unilateral Emissions Trading Systems.

The European Union has indicated that it will not back down with its plans to include non-EU airlines in its Emissions Trading Scheme (ETS). Most airlines have indicated that they will comply with the EU ETS, which came into effect on January 1st 2012. Airlines flying in and out of the European Union will be forced to purchase carbon credits to offset the carbon emissions they produce but the carriers are expected to pass most if not all of these charges to consumers, thus making air travel to Europe more expensive. Threats of boycott by some American and Chinese airlines will not materialize as the EU has threatened tough countermeasures for non compliance by airlines. There are also talk that this could spark a trade war as Chinese, Russian and even US government might impose retaliatory carbon taxes on EU airlines flying into those destinations.

Green Aviation: IATA  favours a global framework for handling aviation emissions under the leadership of UN's ICAO, but Europe, frustrated by the slow pace of deliberations , has instituted its own Emissions Trading System  that has infuriated many governments and industry stakeholders.
Under the Kyoto protocol, the United Nations’ International Civil Aviation Organization, ICAO was given the responsibility to manage the aviation industry's emissions. Many governments have proposed moving forward with this global framework of an emissions trading system that incorporates aviation under the leadership of ICAO but the EU has resolved to unilaterally move ahead with its own ETS scheme, a move that has infuriated many governments and industry stakeholders.

Green Airlines: Several African and global airlines have instituted "green programs" but they are a drop in the ocean. There is a need for a consensus based global framework for handling emissions by airlines.

What this disjointed ETS means is that global airlines flying into Europe will have to pay the EU fees to offset their carbon footprints in Europe while EU airlines do not pay any fees for their carbon footprints when flying to global destinations, a situation that naturally creates an imbalance. A scenario might in the future arise where every country or trading bloc will impose their own set of ETS systems which will lead to increased carbon offset fees as airlines will have to pay double carbon taxes to every country they fly to unless the system is harmonized under a global framework. Of course these fees will be passed over to passengers making air travel even more costly. That situation might arise soon as South Africa finalizes its carbon tax plan that includes the aviation industry.

South Africa's carbon offset plan illustrates the situation that many airlines will face in the future if every country or trade bloc institute their own set of emission trading systems and move way from the global framework under ICAO's leadership.

 I expect AFRAA to in due course release a statement on the adverse effects of the EU ETS on African airlines and their profitability.

IATA estimates that the ETS could cost airlines $1.2 billion this year.


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