Green Aviation

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Survey of Airline Readiness for EU ETS

At the recent ”Airline ETS Masterclass” held on June 1 and 2 in London, a survey of airline participants was conducted during to event to assess how ready they are for the upcoming EU ETS. The survey was carried out jointly by the event organisers Green Aviation International and Price Waterhouse Cooper Advisory NV.

Here is a summary of the findings:

- Airline views are almost equally split on whether ETS will affect their competitiveness. Similarly whether they will pass on the costs of ETS on to passengers.

- Only 55% think that the EU Member States understand the airline industry’s needs.

- Surprisingly almost 90% of the airlines think that they will be ready to submit their plans by 31 Aug 2009, however, many still have much work to do since only 70% are familiar with the reporting and monitoring requirements.

- Significantly 25% of airlines are concerned that they may not be able to meet the 2.5% data accuracy threshold, requirement for during the monitoring period.

So, whilst there are positive signs that this group of airlines have chosen to learn about ETS requirements and prepare, to meet the deadline to submit their plans by 31 August, 2009 ere should be major concern amongst the EU and their Member States that they are simply not doing enough to assist the airline community. Moreover it could be that the data requirements are simply too difficult to deal with adequately in time, since the ETS requires significant changes to business processes, systems for some carriers.

Detailed summary available at: 

ETS_Readiness_Survey.pdf

ETS Deadline re-iterated

Asserting that aviation is the “fastest-growing emissions source among modes of transportation,” a European Commission official reiterated yesterday that all airlines that operate to the EU must submit plans for monitoring and reporting carbon dioxide emissions by Aug. 31 to relevant authorities in EU member states in advance of a 2010 “pre-compliance phase” for the Emissions Trading Scheme that includes aviation from 2012. Read the full article at ATW Online

EUA prices to breach €70

The failure of the EU to meet its 2020 renewable energy targets could see EU allowance (EUA) prices hitting €70 ($93) by that date, according to consultancy ICF International. And wholesale power prices in the bloc are set to double over 2010-20, ICF predicted in its latest European Power & Carbon Markets Outlook report.

This follows comments last year by the International Energy Agency Chairman last year, at a time when EUA prices reached a high of €34, that carbon prices would “need to reach a level of at least €143” per tonne in order to ensure that global temperatures are contained to a 2 degree increase.

“Despite recent lows of €8 per tonne, carbon is beginning to show signs of again reaching levels where many industries, including airlines, need to start accounting for it in their long term planning” commented Andrew Pozniak, Senior Director of Green Aviation International. “Airlines also need to be putting huge pressure on the legislators to incentivise, or force, the fuel suppliersto come up with effectively carbon-neutral or non-carbon fuels.”

He cautioned that “but that’s the future. Right now the airline CFOs need to ensure that in their the preparations for the EU ETS they develop an effective carbon price strategy. For example they can already invest in highly cost-efficient CER projects that will deliver them up to 15% of their total CO2 allowance needs. Or if they have cash available, the airlines can already purchase EUAs on the open market at much lower prices than last year - and probably much cheaper than waiting for an upturn in the economy that will only drive demand for EUAs upwards.”

Sir Richard Branson shares his vision!

NEW! Check Carbon Market Prices!

You can check the link below the current and historic prices of CO2 on Europe’s biggest exchange, ECX. 

December 2012 carbon prices ALREADY being traded today and it is important that airlines already recognise that a carbon market exists, as well as the huge potential volatility in market prices. Such volatility could costs airlines literally tens of millions of Euros / Dollars, even hundreds of millions, if they do not prepare for the ETS early enough. 

We predict that in 2012, as the airlines are required to join the EU Emissions Trading Scheme, it will coincide with an existing forecast shortage of carbon project deliveries in to the market place, accerbated by the lack of credit to finance these projects which need to deliver by 2012. This shortage may more than offset the reduced demand for carbon due to lower industrial production as a consequence of he recession. Put another way, there will be a large imbalance between supply and demand and this shortage of carbon available to buy in the marketplace will, in our opinion, drive up prices to the €30-€50 range in 2012-13 timeframe. Peaks of €34 were already achieved in 2008. Learn more as to how you can prepare at our dedicated page.

Carbon 2012