Move to curb carbon emissions set to cost fast-growing Gulf carriers millions of dollars
Arab airlines will fight European Union plans to charge carriers for their carbon emissions, the region’s aviation trade body said, following in the footsteps of Chinese, US and Indian airlines.
The Arab Air Carriers Organisation, which represents airlines including Emirates, Etihad and Qatar Airways, said it will lodge an objection ahead of a meeting of the International Civil Aviation Organization (ICAO) in December.
The ICAO has already said it believes the planned carbon scheme is flawed and has urged the European trade bloc to review the plan in light of industry oppositions.
“AACO has requested its Civil Aviation Authority Commission to issue a similar declaration and to submit it to the ICAO Council,” Manal Diab, a director at the Beirut-based industry group.
“[We are] talking to Arab Civil Aviation Commission about this issue and we are still awaiting the decision of the ACAC to be taken on it.”
Under the EU's proposals to put a price on pollution, airlines will have to buy permits to help offset greenhouse emissions from jetliners operating in, to and from Europe.
Airlines will face fines of up to €100 for every tonne of carbon dioxide they emit above a fixed limit; part of an EU bid to cut pollution by five percent through 2020.
The scheme has spurred outrage among global carriers, who say the cost of compliance could run into millions of dollars in an already tough economy.
In protest against the law, due to take effect on Jan 1, the Air Transport Association of America, American Airlines and United Continental took their case to the High Court in London, which referred it to the European Court of Justice (ECJ) last year.
Air China and three other Chinese carriers said this week they planned to jointly sue the European Union over the planned charges – but Diab said he thought it unlikely that individual Arab airlines or countries would pursue similar legal action.
“I don’t think individual Arab states… will take similar action… taking into account the size of each country compared to the US,” he said.
The International Air Transport Association said it supported emissions trading in principle; “but only if it does not distort competition or be imposed extra-territorially.”
The EU plan is expected to take a significant toll on the balance sheet of fast-growing Gulf airlines. The region’s largest carriers - Etihad, Emirates and Qatar Airways – have rolled out ambitious expansion plans that include ramping up capacity on their European routes.
Emirates Airline, the largest international carrier, said in August the scheme could cost it up to $1bn.
Abu Dhabi’s Etihad Airways in August said the tax could cost it up to €500m ($719m) over the next eight years, based on “potential carbon prices as high as €60 per tonne”.
The aviation industry has become a “whipping boy” for environmental issues”, CEO James Hogan said in September, branding the scheme a dressed-up means for EU governments to net revenues.
“It is a revenue-generating tax, plain and simple. We cannot support legislation that unfairly penalises the industry,” he added. “The aviation industry should not be the whipping boy when it comes to the environment.”