September 29, 2005

Airlines, U.S. cool to EU emissions trading scheme

By Jeff Mason

BRUSSELS (Reuters) - International airlines and the United
States are giving a cool reception to the European Union's
plans to bring aviation into its greenhouse gas emissions
trading scheme.

The European Commission recommended on Tuesday that all
carriers that take off from an EU airport, regardless of
nationality, should be included in the scheme in an effort to
curb increasing emissions of gases that cause global warming.

But the International Air Transport Association (IATA) said
the EU proposals would distract from forming a global answer to
the problem of airline emissions through the International
Civil Aviation Organization (ICAO).

"A European solution is no solution at all. Unilateral
regional efforts will only distract from this process," IATA
Director General Giovanni Bisignani said in a statement this

ICAO member states were committed to "deciding a course of
action on aviation emissions" in 2007 and defended the
industry's environmental record, he said.

The United States, the world's largest aviation market,
also feels action should be taken on an international scale, a
U.S. official in Brussels said.

"The legal basis for the Commission proposal to require
participation by non-EU airlines seems to us unclear, and there
are serious questions about whether such a proposal would be
consistent with international obligations," said the official,
who asked to remain nameless.

"The EU is free to take this kind of action with respect to
its own airlines but we feel that requiring the participation
of non-EU airlines in this kind of scheme should await the
developments of the guidance from ICAO."

European airlines, however, are more resigned to the move
and prefer it to the other proposals the Commission had
studied: taxes and charges.

"When we're talking about market instruments, then we are
much more favorably inclined to emissions trading than we are
to taxes and charges," said David Henderson, spokesman for the
Brussels-based Association of European Airlines.

"We want to be able to continue to grow and to serve a
growing market and if, as seems likely, we can only do that
through some kind of structure system like this, then so be

EU airports and Europe's third-largest carrier British
Airways have also publicly supported the scheme.

The current system, launched in January, puts a limit on
the amount of carbon dioxide (CO2), the main gas blamed for
global warming, that big polluters like power plants can emit.

Companies buy more rights to pollute if they overshoot
their target or sell them if they come in below the cap.

Officials have said aviation would not enter the scheme
until 2008 at the earliest because any formal proposal from the
Commission must go through the EU legislative process.