EU carbon tax ‘penalizing’ Gulf airlines despite having a young and fuel-efficient fleet
Mr. Georges Hannouche, has strongly opposed the “unilateral” initiative of the new carbon tax- Emissions Trading Scheme (ETS) - imposed by the European Union on the flights into and out of Europe which was nothing short of “penalizing” the Arabian Gulf carriers despite having a young and fuel-efficient fleet.
“Many people in our region believe, and it’s my personal opinion as well, that our airlines have invested millions in a young and fuel efficient fleet but are still being penalized. We should strongly oppose to such unilateral initiatives,” he said during a presentation on Green Airports at the opening day of the Green Aviation and Logistics Conference at the Dusit Thani Hotel in Dubai on Wednesday, February 22, 2012.
Mr. Hannouche, who is the CEO of Bayanat Airports Engineering and Supplies, said the Gulf airlines will start charging passengers additional fees as early as March 1. Etihad Airways will increase the fuel surcharge by US$3 (AED11) per passenger and $0.03 per kg for cargo shipments. The increase will take effect for travel from March 1.
Emirates, one of the world’s fastest growing airline with the youngest fleet in the industry, estimate that over €40 million in the year 2012 and well over half a billion Euros in the nine-year period to 2020 will have to be passed on to its customers. About a quarter of Emirates' global operations are in Europe.
He said: “Additional costs per passenger are estimated at €1.50 – €3.50. Whether this can be passed on to the customers depends upon the competitive position of the airlines.”
He said the carbon tax would have far-reaching impact on the aviation industry in the Middle East region considering the fact that the number of commercial aircrafts will increase from the present 950 to 2440 by the year 2029. The Middle East region will record 7.1 per cent increase in passenger transport numbers annually until the year 2029, while it will be 6.8 per cent annual growth for the freight segment.
Mr. Hannouche said the Intergovernmental Panel on Climate Change (IPCC), a scientific intergovernmental body established in 1988 by the United Nations, has estimated that aviation is currently responsible for around 3.5 per cent of anthropogenic climate change. The IPCC estimate that the scenarios for 2050 will be between 5 – 15 per cent.
He said: “The aviation industry is doing a great deal to limit its environmental impact, although it is not the major contributor to the problem. There are not many industries like the aviation which is operating 20 percent more efficiently now than 10 years ago with ambitious plans to improve further by the year 2020. Implementing green technologies, developing new initiatives in the bio-fuel field, using modern and fuel efficient fleet will certainly have a big impact on limiting the greenhouse gas emissions.
He added: “The UAE authorities are looking seriously into environmental issues. I am confident that the UAE will set the pace towards Green Airports in the region.”
Mr. Hannouche said the international airlines and countries like the US, China, India and many other countries are looking at ‘coordinated retaliation’ if the Europe tries to enforce these measures. In 2008 the European Union passed legislation to include aviation in the EU-Emissions Trading System EU-ETS.
From 2012, overall CO2 emissions of the aviation industry are capped: initially at 97 per cent of 2005 emissions levels, and from 2013 onwards at 95 per cent. All operators flying to and from the EU will have to surrender one allowance for every ton of CO2 emitted on a flight to and from (and within) Europe. The expected growth of aviation sector’s emission is 130 percent by 2012 compared with 2005 levels.
He said the aircraft operators flying more modern fleets have a substantial advantage. Specific emissions are often proportionally higher on short distances. Occupancy rates especially in the baseline period will also have a substantial effect.