Europe sticks to its guns on the ETS
February 14th, 2012 by elisa

In an unpopular decision worldwide, the European Union has decided that its Emissions Trading Scheme (ETS) will not cease. Airlines fear that retaliatory measures by other countries will cause a trade war, with flights taxed more than once by different authorities, which will cost the customer enormously.

Europe claims that it is prepared to be flexible within its framework, but completely dropping the scheme is out of the question.

Speaking at the Aviation Leadership Summit at the Singapore Airshow, Siim Kallas, vice president of the European Commission said: “Europe will implement its system with difficulties, with conflicts, with court cases, whatever, the system will be introduced. We’re not trying to dominate the world. The EU has asked for years and years, there must be a world solution for carbon emission.”

He added: “We are serious about negotiating and we have people who are active in finding solutions.”

Under the scheme, airlines will be allowed a certain amount of carbon emissions, but over a certain limit they will then have to purchase ‘carbon credits’, if they do not cooperate, they will face hefty fines.

Chinese airlines have already been banned from joining the scheme by the State Council, with America and India also voicing their opposition. Representatives from at least 27 countries are due to meet in Moscow next week to discuss the situation and possible retaliation.

Singapore Airlines CEO Goh Choon Phong said an airline flying direct from Singapore to Europe pays more than an airline flying to an intermediate point and then on to Europe, which is one of the reasons for opposing the scheme.

Asia Pacific Airlines said  it fears that there will be a trade war between continents, which will leave airlines stuck in the middle of the battle.

Etihad Airways is the latest airline to introduce a new charge to its passengers to cover the cost of the ETS, charging $3 per passenger for flights into and out of Europe.

James Hogan, Etihad Airways president and chief executive officer said: “As an airline we are strongly opposed to the unilateral measures imposed by the European Union on our flights into and out of Europe, especially as they include areas outside European airspace.

“We have invested many millions of dollars to ensure we operate a young and highly efficient fleet but are still being penalised.”

Despite this opposition, many governments are in fact in favour of a carbon emission trading scheme, however they believe it should be worldwide and not imposed by the EU.

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