Tuesday, September 13, 2011

Cargo Group Says New Emission Rules Will Tax Air Freight

TIACA Protest That Trading Scheme is Fatally Flawed
Shipping News Feature

EUROPE - The International Air Cargo Association (TIACA) is urging the European Union to suspend implementation of its controversial Emissions Trading Scheme (ETS) for aviation and to instead pursue a global agreement of aviation carbon emissions through the International Civil Aviation Organization (ICAO). TIACA say that the scheme is inefficient and will effectively tax air freight customers unjustly.

In a letter to EU Climate Action Commissioner, Connie Hedegaard, TIACA’s Industry Affairs Committee states four main concerns over the upcoming legislation, which from January 1st 2012 would require any airline landing or taking off inside the EU to take part in the regional bloc's emissions trading scheme. The four points are:

1) EU ETS is a violation of international law and treaties: By directly regulating conduct outside of EU airspace, the EU ETS encroaches upon the sovereign authority of each State over its own airspace. The Chicago Convention also prohibits any levies on international flights except on a cost basis “related to the provision of facilities and services for civil aviation.”

2) EU ETS will impose massive new taxes on aviation: According to IATA, the cost to airlines of purchasing the necessary carbon allowances will rise from $1.3 billion in 2012 to $3.5 billion in 2020. There is no requirement that EU Member States must use these revenues to reduce carbon emissions, either from aviation or any other sector – nor that they dedicate the money to any environmental effort at all.

3) EU ETS is unlikely to improve the environment: Ironically, the EU ETS will cripple the industry’s ability to continue investing on its own in greener technologies. In recent years, the industry has made impressive progress in reducing emissions, largely through utilization of more efficient aircraft and operating procedures. Furthermore, the industry has actively supported development of sustainable alternative aviation fuels and implementation of next-generation, more efficient air traffic management systems. The cost of EU ETS emissions allowances will divert crucial monies away from investment in such initiatives. In addition, the EU ETS may lead to some unintended consequences such as encouraging carriers to fly less direct routing that could increase aviation carbon emissions. For example, a direct flight from Hong Kong to Amsterdam has 5% lower emissions than the same flight with a stopover in Moscow. However, the stopover would sharply reduce the airline’s emissions charges – thereby benefiting the airline’s bottom line, but not the environment.

4) EU ETS ignores the essential global nature of aviation: Aviation is intrinsically an international industry. It is the transportation mode that ties together the globe most expeditiously, and many airlines and aircraft operate across borders. The EU has seemingly ignored this reality in taking a regional approach to the issue.

Oliver Evans, Vice Chairman of TIACA and Chair of the Association’s Industry Affairs Committee, commented:

“A better way forward is to take a global approach. TIACA strongly supports ongoing efforts by the aviation sector to improve carbon efficiencies. Furthermore, TIACA endorses the industry-wide emissions goals articulated by the Air Transport Action Group (ATAG), including carbon neutral growth from 2020 and a 50% net reduction in carbon emissions by 2050 relative to 2005. TIACA also supports the 'four pillar' approach of the International Air Transport Association (IATA) for achieving these goals, focused on technological development, operational improvements, infrastructure upgrades, and economic incentives.

“We firmly believe that aviation emissions must be addressed through a global framework and that the appropriate body for developing such an approach is the International Civil Aviation Organization (ICAO). The Kyoto Protocol designated ICAO as the body with authority to set international aviation’s greenhouse gas policy and we urge all ICAO members to expedite negotiations to expand on, complete and implement such a global framework to address aviation carbon emissions.”

TIACA’s Chairman, Michael Steen, added:

“Aviation is one of the fastest improving technological sectors in human history. Since the beginning of the jet age nearly 40 years ago, technological advances have enabled the industry to dramatically reduce the environmental impact of airplanes, resulting in a 70% reduction in fuel consumption and therefore carbon dioxide emissions (which are directly proportional to the amount of aviation fuel consumed). In addition, today’s airplanes are 30 decibels quieter – or a 90% reduction in the noise footprint when compared to original commercial jets.

“Air cargo is a mature and responsible industry that plays an indispensable role in world commerce, accounting for 35% of world trade by value. We sincerely hope the Commissioner will take on board our strong views and the alternative way forward proposed by our industry.”