EU Emissions Trading Scheme and Aviation: Quo Vadis?

Abstract

The inclusion of aviation into the EU Emissions Trading Scheme (EU ETS) may have more surprises in store for small and medium-sized carriers than those airlines will appreciate. It is not the large international carriers with their climate change managers and environmental departments that have EU ETS on their agenda for years but, in particular, third country carriers or companies in business aviation that might get hit harder than others. Compliance with the new set of rules and procedures will be a challenge and the prework dimension should not be underestimated. Unfortunately, the time frame is tight and the policymakers and its administration do not seem to be too expeditious when it comes to enacting the necessary laws, regulations, and guidelines and providing the support the industry is requesting. On the other hand, the potential of the EU ETS concerning a distortion of competition, in particular, for European carriers, is not determined yet. It is feared that traffic from the United States to Asia will switch routes via the Gulf States, that is, not touching European airports and thus avoiding any extra costs. This would not only result in longer routes but also simultaneously have the counterproductive effect of creating more emissions. Therefore, although the concerted European action is a needful forerunner and acceptance in general is growing, a global approach is required more than ever and the industry’s hopes are high for the UN climate conference in Copenhagen in December this year.