Airline Bean Counters Need To Count Emissions Carefully

 - August 27, 2010, 7:45 AM
European airlines will soon need to start verifying their emissions levels to ensure accurate allocation of ETS carbon credits.

Airlines that will be subject to Europe’s new emissions trading scheme (ETS) beginning in January 2012 should start verifying their recorded emissions for 2010 as early as next month, according to ETS experts. Even though emissions reports covering 2010 do not need to be submitted to European Union member state authorities until the end of March 2011, this first-time verification process could prove tricky. Nevertheless, airlines need to submit precise figures because regulators will use the 2010 emissions levels as the basis for allocating annual free carbon credits that carriers will use through the initial period of ETS, from 2012 through 2020.

According to ETS Aviation, even medium-sized airlines stand to earn around €96 million ($122 million) worth of free carbon credits, but only if they get their calculations for this year correct. “Minor errors in recording and reporting will cost airlines a fortune,” warned the UK-based company, which offers the Aviation Footprinter software as a means of automating the ETS monitoring, reporting and verification process. Air Seychelles has just become the latest carrier to sign up for the service.

ETS Aviation believes that the free carbon credits could cover as much as 80 percent of an airline’s emissions costs from 2012. It estimates that a medium-sized carrier will generate 400,000 metric tons of carbon dioxide in 2010 and bases the €96 million carbon credit value on average carbon credit prices of €30 per ton on the open market. Some carriers have complained that the severe disruption to flying resulting from the closure of European airspace due to the presence of volcanic ash clouds earlier this year could result in abnormally low emissions totals for 2010 and therefore result in an unfair allocation of carbon credits for coming years.