Farnborough Air Show

Bisignani blasts EU ‘greed’ over emissions trading tax

 - July 16, 2008, 11:14 AM

IATA director general Giovanni Bisignani lambasted European governments for their alleged greediness for environmentally inefficient taxes here yesterday.
“I challenge the French presidency to turn Europe’s biggest environmental embarrassment into a success story,” Bisignani said during an industry forum on sustainable aviation hosted by the SBAC. The airline lobbyist was referring to the planned inclusion of aviation into the EU’s emissions trading scheme (ETS). “Governments act fast when they decide on new taxes,” he said. Adding up the UK’s air passenger duty, the cost of the ETS and other taxes in the Netherlands, “This is enough!” he exclaimed.

Bisignani noted there is no guarantee the “e3.5 billion [$5.42 billion] collected from CO2 allowance auctioning in the ETS will be spent on the environment. IATA supports the principle of emissions trading–as long as it is fair, global and effective,” he said. Therefore, the EU ETS should not apply to intercontinental flights, as the EU has no right to rule international skies, he claimed. From 2012, the ETS is to include any flight that lands in or takes off from an EU airport.

Bisignani again insisted EU governments have been very slow in making the Single European Sky a reality. Airlines still have to cope with “a mess of 35 air traffic control service providers,” he lamented. He thus blamed EU governments for missing an opportunity to save a claimed 12 percent of CO2 emissions by improving air traffic management (ATM).

Challenging the ETS, Cathay Pacific CEO Tony Tyler told EU governments, “Put your house in order first! You have been too slow in ATM harmonization.” The ETS brings market distortion on long-haul flights, he asserted. There is a general concern in the European airline industry that more flights will simply bypass Europe to avoid the ETS.

Other regions of the world should improve, too, Bisignani said. For example, he sees inefficient procedures in China’s Pearl River area translating into an extra 20 minutes for each flight. He also urged the FAA to go ahead with NextGen, the much-touted future-generation ATM system, now.

There, he was joined by Traver Gruen-Kennedy, chairman of the alliance for sustainable air transportation. This newly formed lobbying group has “NextGen now” as its motto. He sees the environmental challenge as a rare opportunity. “Increasing capacity, stimulating the economy and helping the environment can be done simultaneously,” he said.

British Airways’ CEO Willie Walsh expressed some support for the ETS, albeit partly challenging the way it has been devised. It remains the most environmentally and cost-effective tool to curb CO2 emissions, he said. He added CO2 offset programs, as that offered to BA passengers, “raise the public’s knowledge of the ETS principles.” Measured in seat-kilometer emissions, he pledged BA will decrease its average CO2 emissions from 110 grams now to 83 grams by 2025.

“Politicians and environmentalists have the choice between returning aviation to elitism or working with us, considering the benefits aviation brings to all countries,” Airbus’ CEO Tom Enders said. He also challenged the host of taxes and compulsory auctions governments are planning. “Airlines’ money will no longer be available to replace old, fuel-inefficient aircraft,” he said.

Airbus and Boeing unusually sang the same tune. Scott Carson, Boeing Commercial Airplanes’ CEO, agreed with Enders’ speech and added, “We must do a better job in communications, reaching out to the general public.” He was alluding to the fact the forum was purely an industry event, “preaching to the choir.”