Welcome. The Myths of CO 2 in the Airline Industry. by Dr. Raphael von Heereman Head of Aeropolitical Affairs

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Transcription:

Welcome The Myths of CO 2 in the Airline Industry by Dr. Raphael von Heereman Head of Aeropolitical Affairs RAeS Hamburg Branch, Junelecture, 14.06.07. Publication under: http://hamburg.dglr.de

Agenda 1. How is aviation seen in the public? 2. Worldwide CO 2 vs aviation CO 2 3. EU Commission s ETS proposal 4. Aviation enables globalization 5. Single European Sky: an alternative to ETS 6. UK Airport passenger duty for saving the environment 7. Conclusion Page 2

How is aviation seen in the public? TUIfly PPT_Templates Page 3

How is aviation seen in the public? Page 4

Worldwide CO 2 vs aviation CO 2 TUIfly PPT_Templates Page 5

CO 2 Aviation Emissions World-wide vs. Europe 30.000 %% 25.000 20.000 29.166 15.000 10.000 5.000 0 In Mio. t!"# 6.526 5.327 3.506 $ # Year 2005 213,2 52 $ # # %% 642 610 &% '' '' * = All flights starting and landing from EU Sources: http://www.iwr.de/klima/ausstoss_welt.html; BDI; www.asue.de; www.env-it.de; www.umweltdialog.de; DIW; TUIfly; IPCC Page 6

EU Commission s ETS proposal TUIfly PPT_Templates Page 7

Proposal of the European Parliament Combination of Fuel Tax + VAT + environment charges + ETS No growth above a base year. Aviation should face a rigorous cap Initial allocation amount to be fixed at EU level Full auctioning of initial allocation A separate dedicated (closed) scheme for aviation Multiplier Page 8

Overview: EU ETS proposal Aviation emissions will be capped for the whole aviation sector on the basis of the average yearly aviation emissions in the years 2004 to 2006. Starting with 2011 a fixed percentage of the total quantity of allowances will be allocated free of charge on a basis of a benchmark Thereafter: percentage will be reviewed in the context of the revision of the existing EU ETS The remainder of the allowances will be auctioned. A future Commission s Regulation will be issued to set timing and design thereto. Auctioning proceeds should be used to mitigate climate change impacts and to cover administrative costs of ETS. Page 9

Benchmarking Freely allocated allowances to the aviation sector will be distributed by benchmarking on the basis of the efficiency factor CO 2 /RPK Example : RPK (No of Pax x flight distance) x total distributed CO2 total RPKs The more efficient the more free allowances Page 10

Commission proposes two different phases Two phases : 01. JAN 2011: all flights between EU airports 01. JAN 2012: all flights arriving or departing from an EU airport Note: the proposed act has an EEA relevance (i.e. Iceland, Norway and Liechtenstein). Switzerland is not included in the EEA. Page 11

Consequences for 2011 Flights to Non EU such as Morocco, Egypt, Turkey and up to now Switzerland are not subject to the Scheme in 2011 FRA TFS 3237 km FRA FAO 1959 km FRA HER 2116 km Frankfurt Cyprus 2640 km Frankfurt - Morocco 2654 km Frankfurt - Tunisia 1470 km FRA CAI 2923 km Flights to Spain, Portugal, Greece needs allowances 5th freedom US - cargo flights within the EU would be included in the ETS Page 12

Consequences for 2012 NA EU VAE China $ #()* * Middle East capacity grows 20 40 % p.a. competing with EU traffic and jobs Emirates operates 79 aircraft, 89 orders (45 A380) and 44 options; Qatar operates 38 aircraft, 22 orders and 27 options; Etihad operates 11 aircraft; 30 orders and 12 options Page 13

New entrants and intention To ensure access to the market for new aircraft operators, a proportion of allowances will be allocated by auctioning. No free allowances are reserved for new entrants!!!!!!! New entrants have a serious competitive disadvantage All incumbent operators do receive free allowances Commission will re regulate competition? Page 14

Impact on Aviation Sector? Impact Assessment conclusion of the DG Environment: «Incorporating aviation into the EU-ETS would have only a marginal effect on the profitability of the aviation sector...» Impact Assessment conclusion of a study assigned by the DG Enterprise «..as demand for air travel decreases due to higher cost (and consequently higher ticket prices) demand for related industries also falls.» Page 15

Losses to European aviation and related industries Source: PwC )&16

The Basic Assumptions used in the EC Impact Assessment do not reflect Market Realities Cost of allowances needed for traffic growth will be over Euro 45 bill. in the period to 2022. Demand will be reduced as a result of the changes in the price of air travel caused by airlines passing on a part of the costs of allowances into ticket prices. The introduction of the EU ETS will result in a reduction in consumer choice in terms of the range and frequency of air services. regions and regional airports would be particularly affected. The introduction of the EU ETS will also result in a loss of consumer surplus of between Euro 55.9 mill. and Euro 123.7 mill. in 2011 growing to between Euro 426.2 mill. and Euro 2.18 bill. in 2022. Page +

Aviation enables globalization TUIfly PPT_Templates Page 18

The EU as the most dynamic and competitive economy without civil aviation? The Lisbon strategy to make the EU "the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010" was adopted by the European Council in 2000 and re-launched in 2005. In order to compete with the dynamic economies of Asia and North- America and to attract foreign direct investments global accessibility is crucial. This function is particular by the European airport sector and the aviation industry. (EU Kom- Working document Airport capacity, efficiency and safety in Europe, Introduction, page 1) Page 19

Civil aviation is an indispensable element to reach this aim Demand for Aviation is growing within the EU 27 Growth in aviation is important for EU integration with the 12 new member states where the economic level is well behind those of the EU 15 Air transport will play an important role to catch up with the EU 15 Improved Air Transport Links will help create a more mobile labor and good market between the EU 15 and the new member states To compete with the dynamic economies of Asia and North America - avoiding distortion in competition,#" - &.*/0 */1'2'+ Page 20

Civil aviation in Europe is an important and not negligible economic factor 4,1 Mio. Jobs in Europe by civil aviation (ATAG) 1,51 Mio. direct jobs (airlines; airports; ATM, civil aviation authorities etc.) 1,82 Mio. indirect jobs: Suppliers; Manufacturers; Call Center, Lawyers, GDS, 0,83 Mio. induced jobs: Tourism, Commerce, Service providers for direct and indirect job holders Civil aviation generates over 250 billion GDP or 8 % of the European GDP (AEA) Including the catalyst effects airline industry creates 7,5 million jobs or 1041 billion CEO of easyjet: Given that aviation CO 2 only accounts for 1.6 % of global greenhouse gas emissions, grounding every aircraft in the world would have a minuscule impact on climate change yet a vast impact on our economies Page )&1 21

United Nations World Tourism Organization: Increase Tourism to Fight Poverty 2007 should be a critical year to consolidate tourism as a key agent in the fight against poverty In acting within the Doha Development Round of the World Trade Organization, to increase tourism commitments and provide specific tools to help poor countries use tourism services to fight poverty and promote sustainable development. In acting on Climate Change, to build a pro development element into tourism and climate strategies, particularly for airline flights, taxation and emission trading. For International Development Agencies the World Bank Group, the Regional Development Banks and National Aid Agencies, to place Tourism amongst their key priorities for infrastructure and entrepreneurial support. Global tourism represents 3,8 % of the global GDP and employs 72 million persons. Page 22

Civil Aviation for sustainable development in developing countries Nature based eco tourism becomes a significant source of revenues and employments whilst helping to ensure the conservation of protected areas Air transport makes a significant contribution to sustainable development in Africa where 15 % of the total protected area worldwide is. Tourism has driven the expansion of the domestic economy and employment. E.g. Mauritius, Morocco, Tunisia, Egypt, Ghana Tanzania, Ghana and Senegal. Not surprisingly, these countries are also among the fastest growing African economies. There is a proven connection between tourism, investment and standard of living. The African non oil economies with the fastest growth in investment and the highest GDP per capita ten to be those with the largest share of tourism in GDP. Costa Rica has promoting eco tourism as a way of reversing a growing process of deforestation. 72 % of passengers (25 % of the population) arrived by air. Source: ATAG Page 23

Single European Sky: an alternative to ETS TUIfly PPT_Templates Page 24

Single European Sky would save up to 10 Mio. tons of CO 2 U.S. airspace 9,8 Mio km2 EU: airspace 10,5 Mio km2 Hubs 31 Hubs 27 1 ATC Organisation 47 ATC Organisation 21 En route center 58 en route center 1 operating system 22 operating system 1 program language 30 program languages 900 flights/controller 480 flights/ controller 380 US$ ATC cost/ flight 667 US$ ATC cost / flight Source: DFS Page 25

Current set-up of the European ATM generates unnecessary costs to users Fragmentation of air traffic management (2005): Flight inefficiencies in (2005): En-route ATM delays (2005): 1.4 billion 1.4 billion 1 billion The 3.8 billion is more than half of what users paid for European ATC in 2005 Unit costs nearly two times higher than in the USA The [UN] Intergovernmental Panel on Climate Change estimates that there is a 12 % inefficiency in global air traffic management. That means up to 73 million tons of wasted CO 2 emissions and nearly $ 13.5 billion in wasted costs Source: ELFAA Page 26

Unnecessary fuel burn and CO 2 Route: Djerba- Karlsruhe Distance: 1255 km Great Circle: 1054 Differenz: 201 km = 15 min Additional Fuel: 15 X 50 l X 0,60 Sum: 450 Faro Köln DIST 1093 GC 902 Differenz 191 Page 27

UK Airport passenger duty for saving the environment TUIfly PPT_Templates Page 28

Airport passenger duty British Parliament introduced by February 1st, the new airport passenger duty Economy class flights in Europe, including internal UK flights: 10 ( 15,00) Business and first class flights in Europe: 20 ( 30,00) Economy class long-haul flights: 40 ( 60,00) Business and first class long-haul flights: 80 ( 120,00) Meaning an extra billion revenues (1,5 billion ) On the other side, what is cost for: Long-term UK GDP will suffer by 400 million pounds )& 3

Another consideration of Airport passenger duty The Chancellor estimates through this measure a reduction of greenhouse CO 2 by 750,000 tons Intergovernmental Panel on Climate Change (IPCC) estimates that a tonne of CO 2 does 70 of damage to the environment Taking into consideration this valuation of 70 pound/ per tonne CO 2 this measure would bring a climate benefit of 53 million. But the UK Government will receive an extra billion. In a UK Briefing Giovanni Bisignani, CEO of IATA said: If I may be blunt, Mr. Brown is spending far too much of other people s money to support his green credentials. He also asked him, to which environmental projects will the billion pounds be allocated? No reply Page 30

Conclusion TUIfly PPT_Templates Page 3

Conclusion Aviation is no luxury but necessity to reach the aim of the Lisbon agenda Aviation is the key element of the future of EU 25 EU ETS will not be the solution to climate change A global rather than a regional or national solution is needed Aviation harms the environment less than it helps other EU goals Aviation enables globalisation 8 % GDP or 1-2 Mio. jobs at stake Single European Sky has the potential to save more CO 2 than ETS up to 10 Mio. tons or 8 %. Aviation assumes social responsibility towards third world countries Page 31

Thank you very much for your attention! Contact: Dr. Raphael von Heereman Head of Aeropolitical Affairs Hapag- Lloyd Fluggesellschaft mbh Phone: + 49 (0) 511 9727 645 Fax: + 49 (0) 511 9727 8626 Cel.: + 49 (0) 173 527 5020 Email: raphael.heereman@tuifly.com