Monday, April 11, 2011

Lufthansa: Airlines' inclusion in EU ETS in danger of becoming 'fiasco'

Lufthansa said that "too many problems remain unresolved" regarding implementation of airlines' inclusion in the EU Emissions Trading Scheme, leaving open the prospect that the initiative will become a "fiasco" when it goes into effect at the beginning of next year (ATW Daily News, Oct. 12, 2010).

"All of the scheduled deadlines have so far been missed and numerous legal and technical questions remain unanswered—just as 2012 tickets are beginning to go on sale and only eight months before the 'official kick-off'," LH stated in its latest "policy brief" issued Monday. "The aviation industry therefore still has no way of knowing what the major economic parameters will be."

The EU directive mandating airlines' inclusion in the ETS was supposed to be enacted into law by each of the body's member nations by February 2010 (ATW Daily News, Nov. 25, 2010). "Yet most governments have so far failed to do so owing to the complexity of including the international transport sector in emissions trading," LH pointed out. "It certainly cannot be said that the directive is being implemented in a uniform manner which preserves competition."

One major problem, LH contended, is that emission allowances (ATW Daily News, March 8) are based on 2010 traffic figures. "However, that year was marked by airspace closures due to the volcanic eruption in Iceland. The result will be significant distortions in the allocation process," the airline stated. "The European Commission must urgently abandon this benchmark and present a fair solution once and for all."

The issues surrounding the ETS "are exacerbated by the continued lack of clarity" on whether it is legal to impose the scheme on non-EU carriers (ATW Daily News, March 22), LH asserted, adding, "Numerous non-EU states have announced that they will withdraw from the emissions trading scheme and it is still not known how the EU will deal with these [attempts to reject the ETS]. The European Commission is considering simply revoking the traffic rights of airlines, a highly dubious move."

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