Friday, January 13, 2012

EU ETS .... Is It Worth It

The  EU seems ready to bring the airline industry to a stand still over the Emission Trading Scheme (ETS).

ETS is not a bad idea and the airline industry should share the burden, nobody objects to that. The airline industry along with aircraft and engine manufacturers have always striven to produce more fuel efficient aircraft to meet invariably the ever fluctuating and rising oil prices and the effort is still going on with aircraft like the B787 and A350 producing efficiencies and reduction of emissions approaching 20%.

The EU has introduced an ETS that affects all airlines operating within Europe and in and out of Europe regardless of nationality or country of registry, and to add to the problem the funds levied by the EU governments do not have to be used to fund research or projects related to aviation or even the environment. It is only recommended that governments fund these projects, and with the euro zone debt crisis and a looming recession we all know where the funds will go to the general budget.

Several countries during the last ICAO meeting requested the EU to suspend its ETS and look at a global ETS that is more equitable. The EU rejected that proposal and insisted that it will go ahead with its planned scheme. The European Court of Justice rejected a law suit, that ETS infringes on the sovereignty of other nations and contravenes the Chicago Convention in regards to the taxation of international aviation, on the basis that the EU is not a signatory to the Chicago Convention, as if the EU member states are not.

Countries (China, India, Brazil, USA, Russia, Japan and the list goes on and on) opposing the EU ETS have prohibited their airlines from participating and the EU declared that they will ban any airline, not participating, from operating into Europe.

Really, and the EU thinks that the rest of the world will turn the other cheek and accept. There will be a reciprocal ban against all EU airlines., and Europe will be the biggest loser.

I am sure things will not get to that point and cooler heads will prevail and an acceptable solution will be reached, hopefully.

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