BRUSSELS – LOW-COST airlines claimed on Monday they will not make windfall profits from a trading programme intended to limit their greenhouse gas emissions.
The European Union (EU) wants all airlines that fly within its borders to trade pollution permits beginning in 2011, forcing them to buy more permits if they want to operate more or longer flights.
The EU’s cap-and-trade programme gives companies a permit to pollute that they can sell to other companies if they use cleaner technology or emit less carbon dioxide (CO2). Businesses with more permits than they need can potentially profit.
But EU governments and lawmakers plans to force airlines to buy 15 per cent of available permits to avoid any profiteering – something the European Low Fares Airline Association say is unlikely to happen.
A report ordered by the British government last year claimed that all airlines would be able to pass on extra costs to customers, giving carriers less incentive to make real cuts to how much CO2 they emit. To combat this, it called for more permits to be sold to companies.
The association says members such as Ryanair Holdings, Europe’s biggest budget carrier, will instead be unfairly loaded with high costs because they will have to buy the permits.
They cited a study they commissioned by Ernst & Young and York Aviation that they commissioned. It forecast a cost of euro4 billion (S$8.13 billion) per year for low-cost carriers if they had to buy just 3 per cent of all permits. The airlines claim this will wipe out future profits and stop them from expanding.
The global airline industry also complains that governments are ignoring airlines’ efforts to become more fuel-efficient and are threatening them with extra costs instead.
Mr Giovanni Bisignani, the director general of the International Air Transport Association, said on Monday that airlines are generating enormous CO2 savings by shortening routes, managing fuel more carefully and improving air navigation.
He complained that ‘governments think green and see cash.’
‘We get tax after tax, conceived in the name of the environment, which rob the industry of the cash to invest in technology,’ he said in a speech he delivered in Amsterdam.
But EU officials say the industry has not moved fast enough and rules are needed to help Europe reduce greenhouse gas emissions by a fifth by 2020, to limit the effects of global warming.
Air transport has surged in Europe over the past two decades as low-fare airlines emerged, encouraging people to fly more often and in greater numbers. Aviation emissions have nearly doubled since 1990 – even though they emit far less than major polluters in the power generation sector. — AP
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