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Stakeholderoverleg Werkgroep Luchtvaart Brussels, 17 January 2008

Stakeholderoverleg Werkgroep Luchtvaart Brussels, 17 January 2008. Nadia Gerard (Brussels Airlines) Brussels, 17 January 2008 speaking of behalf of BATA/IACA. IACA Members:. BATA Members:. Emissions Trading Scheme (ETS). Legislative Process

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Stakeholderoverleg Werkgroep Luchtvaart Brussels, 17 January 2008

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  1. StakeholderoverlegWerkgroep LuchtvaartBrussels, 17 January 2008 Nadia Gerard (Brussels Airlines) Brussels, 17 January 2008 speaking of behalf of BATA/IACA

  2. IACA Members: BATA Members:

  3. Emissions Trading Scheme (ETS) • Legislative Process • Dec 06: Commission’s proposal to include aviation in the EU ETS • Nov 07: European Parliament vote in first reading • Dec 07: Council general approach (Environment Ministers)

  4. ETS: Design Elements and Definitions • Implementation date • Geographical scope • Type of greenhouse gases: CO2 (possible other effects covered through a “CO2 multiplier”) • “Allowance”: permit to emit 1 ton of CO2 • “Baseline”: reference period used to determine the cap • “Cap” : the amount of CO2 allowances to be allocated to the entire airline sector under the scope

  5. ETS « Cap and Trade » • Cap - airline sector is allocated a limited amount of CO2 allowances. These allowances are distributed to individual airlines: • Partially through auctioning • Remainder for free, based on benchmarking • Trade - each airline can buy its missing CO2 allowances from: • Other airlines • Other ETS markets • Alternative Kyoto schemes (CDM/JI)

  6. ETS Design: « Start / Scope » (*) “non-discrimination”: no application to Community carriers if 3rd country carriers are not included within a given geographical scope.

  7. ETS Design: « Baseline »

  8. ETSDesign: « Cap »

  9. ETS Design: « Auctioning »

  10. ETS Design: « Trade »

  11. ETS Design: « Benchmarking » (*) passenger/cargo conversion factor based on international regulations

  12. ETS Design: « Multiplier »

  13. ETS: Cost Impact 1 allowance = € 30

  14. Total C02 emissions in 2017 352 mio tons Buy from non-aviation sector €9.4 billion 2004-2006 emissions 218 tons 196 tons 90% €1.5 billion 25% auctioning Buy from auctioning 147 tons 75% free allowances 75% free allowances ETS in 2017 (according to European Parliament) CAP TRADE Total cost = €10.9 billion

  15. Non-aviation allowances TRADE • Each airline can buy non-aviation allowances up to +/- 15% of its total emissions But • Efficiency factor: further reduction of 3.5% per year of airline emissions compared to efficiency factor • Only airlines who have met efficiency target can buy from the non-aviation market (up to the limit of +/- 15%) • As long as there are no measures to address NOX, airlines able to access non-aviation allowances will have to surrender two non-aviation allowances to cover 1 ton of C02 (multiplier effect) Buy from non-aviation sector Buy from auctioning 75% free allowances

  16. Airline industry favors ETS … • ... if it is well designed, affordable and includes the following parameters: • only CO2; no multiplier • non-discriminatory • allows growth for the aviation sector • an open system linked to existing ETS market • easy to manage. • Parliament’s design fails to fulfil all these requirements.

  17. Consequences of Parliament’s design • Pressure on airline margins: downsizing, bankruptcies and job losses • Loss of connectivity (fewer routes on offer) • A halt to the growth; loss of competitiveness • A unsaleable ETS package to third countries • Unfair competition EU and non-EU airlines. • => Where’s impact assessment ???

  18. Summary of ETS design proposed by IACA/BATA • Scope: no discrimination within the given scope • Baseline: average of 2008, 2009, 2010 • Cap: 125% of baseline • Auctioning: as in existing ETS sectors • Trading system: open • No multplier

  19. IACA Members: BATA Members:

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