CHANGING THE RULES OF ETS IS NOT THE WAY FORWARD AND WILL HARM AVIATION ONCE MORE

The Association of European Airlines (AEA) expresses its strong concerns about the latest proposal of EU Climate Action Commissioner Connie Hedegaard to artificially inflate the price of carbon allowances under the EU’s Emissions Trading Scheme (ETS). The implementation of the new proposal would have a further detrimental effect on the European airlines facing a forecasted loss of 1.5 billion euro in 2012.

On 25 July, the European Commission presented a package of three documents aimed at strengthening the carbon market and, in the final analysis, raising the price of carbon by modifying the 2013-2020 calendar for auctions of emission allowances under EU ETS. Commissioner for EU Climate Action Hedegaard claims that, due to the economic recession which continues to ravage European business activity, the already available unused allowances are depressing the carbon price.

AEA, representing Europe’s 33 network airlines, believes that this proposal fundamentally changes the principles of trading with ETS quotas. ETS has been defined as a ‘market-based measure’, in other words the trading should take place on a free market. Intervening now is like changing the rules of a game, which has already started. Just like other industry associations who are currently criticising this latest move of the Commissioner, the Association of European Airlines says that its members need stability and regulatory predictability. This proposal goes completely in the other direction and will harm industries like aviation which are vital in the recovery of Europe’s struggling economies.

We also fail to see how this package can fit into the European Commission’s ambitions in its growth and jobs agenda (‘Europe 2020’).

“Aviation industry is demanding a global solution for ETS since we have already seen retaliation from non-EU countries that are very, very upset by Europe’s ETS scheme”, says Athar Husain Khan, acting Secretary General of the Association of European Airlines. “The declarations of Commissioner Hedegaard might have further impact on the negotiations on a global level. The so-called ‘coalition of unwilling’ including 15 non-EU states opposing the EU ETS are gathering on 31 July to discuss possible actions against the scheme which is perceived by them as a pure tax and not as an environment-friendly initiative. The fact that the Commission now wants to artificially manipulate the price setting mechanism of ETS gives these non-EU States even more arguments. There is a lot at stake and it is essential that policy-makers also realise this threat.”

“We regret that in future Lufthansa will no longer provide a connection between Munich and these two capital cities in Asia. Given the current two-runway system at our Munich base, we will soon reach our limits in terms of expanding our flight schedule,” said Thomas Klühr, a member of the Lufthansa German Airlines Board, Munich & Direct Services. In future, Lufthansa will only be able to achieve traffic growth where there is still sufficient infrastructure.

Over the next few days, passengers who are already booked on flights from Munich to Singapore will be rebooked on a Lufthansa flight departing from Frankfurt, at no extra charge, and will be informed accordingly. Passengers for Jakarta will be rebooked on connecting Star Alliance flights.