Embargo: 00:01 Thursday 9th February 2006
Contact: Owen Williams 020 7219 8659
EU MUST BE CLEAR ABOUT RISKS OF INCLUDING AVIATION IN EMISSIONS TRADING SCHEME
Aviation Emissions are not currently a major environmental problem but will become one as air travel continues to grow. A report published today by the House of Lords EU Committee supports moves to ensure that aviation pays for the cost of its emissions and to include aviation in the EU emissions trading scheme.
However the Committee warns that there are some big and difficult issues to resolve before the proposals are finalised. There is no apparent longer term policy framework to ensure that environmental, aviation and economic growth policies are compatible, and to enable the aviation industry to plan its investment strategy in new aircraft and new technologies.
The report believes that the EU proposals have underestimated the likelihood that rationing of carbon use by airlines will, in the long term, significantly increase the costs of air travel and have a major lifestyle impact on EU citizens and an economic effect on business. This is highlighted by the contrast in environmental and aviation policies, with the EU seeking to limit aviation growth while the UK government predict aviation growth of 3.7% annually to 2030 and are planning the development of new airports to handle this growth. There is also a failure to recognise the effects on other industries of an increase in carbon prices if aviation joins the EU emissions trading scheme.
The Committee believes that the effects on the competitiveness of the European aviation industry and of the EU in the global economy of the EU going it alone on aviation emissions have not been sufficiently thought through. There could also be a big impact on Europe's low cost airlines that have transformed leisure travel.
Commenting, Lord Woolmer, Chairman of the Committee said:
"The European Union is right to recognise that aviation emissions will be a major environmental problem in the future. Currently their impact is overstated but it is right to be thinking seriously now about how future problems can be avoided.
"However we have concerns about a lack of clarity in the EU's approach and a failure on their part to recognise that including aviation emissions in the trading scheme will have a large impact on prices of air travel both for consumers and companies using air freight. It is simply not realistic for them to claim that the impact on prices will be negligible.
"Carbon prices are likely to rise, not only for airlines but other industries in the trading scheme such as energy producers. This will inevitably lead to higher fuel and heating costs for the public.
"Aviation meets business and leisure demands, do the EU want to see the growth in this industry continue and how is that compatible with reducing emissions? These are the questions the EU is failing to address and it is this uncertainty that we are most concerned about.
"It is time the debate was held in an open and frank manner with the potential negative effects on the economy and competitiveness made explicit so that sustainable and consistent policies are developed."
Other conclusions of the report include:
Any Emissions Trading Scheme for aviation should include all flights departing EU airports. This would cover both intra-EU flights and those heading to third countries which respectively account for 40% and 60% of the EU's aviation related CO2 emissions. But there is doubt whether the EU can impose it policies upon airlines from outside the EU.
Aviation CO2 allowances should not initially be auctioned off to airlines unless basic CO2 emissions for all industries were put up for auction in Phase 2 of the EU Emissions Trading Scheme.
Emission permits allocated free of charge should be distributed according to a benchmarking system to reflect and encourage best practice on aircraft emissions.
With the effects of including aviation in the Emissions Trading Scheme likely to impact on industry and national economies far beyond the aviation industry The European Commission and the UK Government should conduct a rigorous assessment of the issues before further policy commitments are made.
Notes to Editors
1. The report is published by The Stationary Office:
Including the Aviation Sector in the European Emissions Trading Scheme, House of Lords, EU Sub-Committee on the Internal Market, 107th Report, HL Paper 10, ISBN 010400813X, Price £17.50.
2. The full report will available shortly after publication on the internet at:
3. Government predictions of growth in air traffic of 3.7% per annum until 2030 is mentioned in paragraph 36 of the report and is taken from the Governments Aviation White paper from December 2003.
4. The Committee received evidence from a wide variety of sources including: The European Commission, British Airways, The European Low Fares Airline Association, The Tyndall Centre for Climate Change and Elliott Morley MP, Minister for Climate Change and The Environment
For copies of the report or to request an interview with Lord Woolmer on Wednesday 8th February (under embargo) or Thursday 9th please contact: Owen Williams, Press and Publicity Officer (Committees) on 020 7219 8659.