Airlines carbon fight escalates further

26 countries set to take anti EU ETS battle to ICAO to avoid paying for pollution: House of Representatives votes to forbid US carriers taking part in scheme

EU ETS plans to charge world airlines for pollution are set to be challenged at the International Civil Aviation Organisation.

26 countries, including Russia, India and Japan, will tell the International Civil Aviation Organization (ICAO) that the EU measure “violates the cardinal principle of state sovereignty” enshrined by international air agreements since the second world war when the ICAO was set up, outlawed charging fuel taxes and set up the ‘Freedoms of the Air’

The EU’s inclusion of aviation in its six-year-old emissions trading scheme from January will “curb the sustainable growth of international aviation”, the 26 countries claim, in a paper prepared for a meeting of ICAO’s governing council that starts on Monday.

Other countries could also introduce “competing schemes”, the countries say, “bringing about a chaotic situation adversely affecting the sustainability of air transport”.

One of the last big disputes before ICAO was also over an EU environmental measure: a 1999 decision to clamp down on aircraft noise that the US said unfairly favoured European-built Airbus aircraft over older US Boeing jets.

ICAO cannot force the EU to ditch its plans, but it may be used in order to apply further pressure to Brussels in regard to its boldest move to date to force countries outside Europe to abide by its carbon pollution rules.

The US House of Representatives last week voted to stop US airlines taking part in the scheme. The Republican congressman who sponsored that decision, John Mica, headed a delegation to ICAO this month to urge member states to oppose the EU’s plans.

US airlines have also launched a legal challenge against the move – but suffered a setback this month when an interim opinion by the European Court of Justice’s advocate-general dismissed most of their arguments.

Connie Hedegaard, EU climate commissioner, has insisted the bloc will not back down about a measure environmental campaigners have long pushed for.
 “This is a better deal than a fuel tax; it’s a better deal for passengers; and it’s a better deal in the fight against climate change,” Jeff Gazzard of the London-based Aviation Environment Federation told the Financial Times.

The FT reports fresh research calculates that the financial impact of the scheme – which has been estimated at anything from a €17bn ($24bn) cost to a €20bn profit for the airline industry – will be relatively small compared to other industry charges.

Out of pocket costs “represent less than a quarter of a per cent of revenue from the routes covered by the EU ETS in 2012 and [about] half a per cent in 2020,” said the Bloomberg New Energy Finance consultancy.

“At current carbon prices this translates to an out-of -pocket cost of €762m in 2012 and €2,170m in 2020.” These amounts were “dwarfed” by other recent aviation charges in Europe, such as the UK air passenger duty and German air passenger tax, BNEF said.

Valere Tjolle
Valere is editor of the Sustainable Tourism Report Suite 2011 Get your copy at a special offer price: HERE