From New Year’s Day, airlines operating in Europe became subject to emissions restrictions – now the EU’s controversial new trading scheme has come into force. How, asks Mike Scott, does it affect the industry?
On 1st January 2012, the aviation industry in Europe found itself, for the first time, subject to emissions restrictions when the industry was included in the European Union’s Emissions Trading Scheme (EU ETS).
Airlines have been given a certain amount of emissions allowances to cover flights in and out of the EU and if they exceed that quota, they will have to buy permits in the open market. This is a culture shock for the sector and the protests from airlines and governments outside the EU have been loud and long.
The US Congress has sought to pass a law forbidding US airlines from complying with the requirements of the ETS, while the US Air Transport Association (ATA) took the EU to the European Court of Justice in an attempt to prevent the scheme applying to them. “ATA challenges EU ETS because it is a unilateral measure, which has not been agreed by countries outside the EU, yet nevertheless applies EU law to third country carriers in third country airspace,” the ATA told the court. A preliminary ruling suggests the court is likely to rule that the scheme is legal and does not violate international treaties.
There have also been protests from other countries including China, India and Russia, and a resolution was passed recently at the International Civil Aviation Organisation (ICAO) calling on the EU to halt its plans on the grounds that because of the global nature of the airline industry, a global plan to tackle climate change is needed.
“Market-based measures require international consensus because of the nature of aviation,” says Ulrich Schulte-Strathaus, secretary general of the Association of European Airlines. The EU does not disagree with this – it, too, would much prefer a global solution. However, it is easy to see the calls for a worldwide scheme as simply an excuse for inaction.
ICAO and the International Air Transport Association (IATA) have been calling for a global initiative since the EU’s plans were announced in 2008, yet still no global scheme is forthcoming. “Firm action is needed,” Climate Commissioner Connie Hedegaard pointed out earlier this year. “Emissions from aviation are growing faster than from any other sector, and all forecasts indicate they will continue to do so under business-as-usual conditions.”
ICAO does have a “roadmap for action” but it merely invites its members to submit – by June 2012 – action plans outlining “the specific voluntary measures they intend to take in order to improve efficiency”. The confrontational nature of the debate is not helping matters. “Europe is right to demand concrete action and deliverable environmental results, but its approach lacks essential international buy-in,” says Schulte-Strathaus, while “non-European countries are also right to call for a global approach, but they need to back up their words with concrete actions which genuinely deliver for the environment.”
So is this failure to address the problem symptomatic of an industry that does not care about dealing with climate change? And how will the need to think about carbon emissions affect the industry? Operationally, it is not a problematic issue, says Gavin Manerowski, chief executive at MH-Carbon, a company that sells voluntary carbon credits. “Airlines are always planning their future fuel requirements and hedging future fuel costs. They will simply look to buy credits at the same time as they buy their fuel – and they will pass this cost on to the customer.”
In many ways, the aims of the ETS are totally aligned with the focus of the industry, which faces an extra $1.6 billion in costs every time the oil price rises by $1 per barrel, according to IATA. Reaction to the emissions plan suggests both that the industry does not take the issue of emissions seriously and that the relationship between aviation companies and Brussels are characterised by conflict.
In reality, the two sides are working together on a range of measures to make flying more environmentally-friendly and they have been doing so for years.
Clean Sky is a joint venture between the European Commission and the European aviation industry that is re-examining all aspects of aviation, from the design of engines and wings in long-haul jets to how helicopters work. Other work streams are examining issues such as how to make aircraft more recyclable, how to reduce the power requirements of auxiliary power systems and how to make aircraft lighter. The €1.6 billion initiative aims to cut CO2 emissions by 50%, NOx emissions by 80% and external noise by 50% by 2020.
“Speeding up new, greener design is essential to protect our environment. It should be kept in mind that aircraft have a 30-year service life, and that new aviation design takes more than a decade to develop. The accelerated research process that Clean Sky offers represents an unprecedented opportunity for rapid progress in the introduction of green technology into aviation,” says a spokesman.
Meanwhile, the entire industry, from engine manufacturers such as Pratt & Whitney and Rolls Royce to airframe builders including Boeing and Airbus to regulators in charge of passenger safety have been working together to introduce biofuels with feedstocks ranging from algae to sugarcane to waste cooking oil into the fuel mix. Just last month, for example, China Airways ran a trial flight using fuel made from jatropha and the first aviation biofuels have gone through the rigorous certification regime required for jet fuel.
Tony Tyler, IATA’s CEO, says biofuels represent the future of aviation. “With the potential to cut aviation’s carbon footprint by up to 80% over the lifecycle of the fuel, sustainable biofuels have the potential to be a game changer,” he said. “But they are still expensive and supply is limited. In other words, we need to commercialise them.” A recent test flight by Alaska Airways using a 20% biofuel blend paid $16 a gallon for the biofuel, compared to just $3.15 a gallon for the conventional jet fuel.
Improvement measures do not just apply to the hardware of flying – the industry is increasingly aware of the improvements to fuel efficiency that can be made by changing the way aircraft are operated – from the moment they leave the terminal to when they touch down.
Fuel and emissions savings can be made by towing aircraft out to the taxiway, by optimising route management and by using “continuous descent” techniques that allow aircraft to coast in to land rather than using their engines. Jill Brady, chair of Sustainable Aviation, a coalition of UK airports, airlines, engine and airframe manufacturers and air traffic management bodies, highlights an initiative last year testing a “Perfect Flight” between Heathrow and Edinburgh. Every stage of the journey was calibrated to achieve optimal performance. The flight used around 350kg less fuel and one tonne of CO2 (about 11%) less than the norm for the route.
Another collaboration between the EU and the industry – known as the Single European Sky – aims to make savings on an average flight of 8 to 14 minutes; 300 to 500 kg of fuel; and 948kg to 1575kg of CO2. Europe’s airspace is massively over-regulated because it has been arranged on a national basis resulting in 34 air traffic authorities covering an area that in the US is covered by one system. This has resulted in extra costs of €2 billion – €3 billion.
“There is a lot going on when it comes to sustainability in aviation,” says Jeroen Kruijd, an aviation expert at PwC. “Airlines are very committed to reducing emissions.” Despite all the “noise” around the EU ETS, all airlines will be planning to meet their compliance requirements, he adds. “This is a very compliance-driven industry and they will do what is needed to meet their legal requirements.”
However, Dave Covell, a principal at environmental consultancy Environ, says that the supply side of the industry – from engine makers to fuel suppliers – is “light years ahead of their customers, the airlines”. “The industry is getting there in terms of taking carbon into account, but performance is very variable.” The UK airline FlyBe, for example, has energy ratings for its aircraft on its safety information leaflets, while airlines such as BA currently allow customers to offset the emissions from their flights on a voluntary basis.
At the moment, though, the industry is in the early stages of dealing with carbon, even to the extent of lacking the data it needs to tackle it effectively. “The information provided between different airlines is very different so it is very hard to compare the sustainability of different airlines,” says Kruijd. “Airlines need to report on all their sustainability issues and there are calls for a global standard on how airlines report. I believe the industry is capable of doing that – I am not pessimistic at all.”