Why The EU Airline Carbon Fees Are Great News

Despite the handwringing now from airlines about the European Union carbon fee, the cost is negligible when shared and the money is spent on clean energy.

It was no surprise to the airline industry when the world’s first global carbon pricing began this month, with the EU’s imposition of a carbon cost on all fights that land in or take off from Europe. All airlines have known since 2008, when the EU announced the new rule, that in January 2012 they would have to join the EU cap and trade program if they emitted over 10,000 tons of CO2 a year. (Small aircraft were excluded.)

europe airline carbon fees

image via Shutterstock

By 2009, each airline was required to submit a greenhouse gas emissions monitoring plan. And since 2010, they have all had to monitor emissions and submit verified reports, as we reported last April.

Under the “cap” part of the EU cap and trade program, the European Trading Scheme (ETS), all affected flights must reduce their emissions to 97 percent of a baseline of the emissions from 2004 to 2006, in the first year. That ratchets down each following year. (This is exactly why we’ve seen so many stories about the surge in interest from airlines in aviation biofuels like “Lufthansa To Lift Off With Biofuels” and “United Airlines Makes Successful Flight Using Synthetic Jet Fuel.”)

During the phase-in period there is a free allocation of 85 percent of the permits for this year; so the fee will be lower for the first year. Each year, the cap will be reduced, raising more funds, as a carbon emissions fee on every ton of CO2 emitted.

Standard & Poor’s calculated, “As of Jan. 21, 2011, the weekly average jet fuel price was about $890 per metric ton. With 1 tonne of jet fuel generating 3.15 tonnes of CO2 and a current carbon price of about 15 euros per tonne of carbon dioxide, we calculate that the additional carbon cost would be the equivalent of adding about 47 euros (about $64), or about 7 percent, to the cost of a tonne of jet fuel.” (Currently the ETS carbon price is about half that. The carbon price varies, depending on demand.)

Susan Kraemer enjoys writing to publicize the many great solutions for climate change that we can find if we just put our minds to it. She covers renewable policy and clean energy for CleanTechnica and GreenProphet and green building at HomeDesignFind. She recently moved home to Waiheke Island where her writing is now powered by the 80% renewable electricity that powers New Zealand.

    • adapa

      Actually, this is bad news and here are some reasons:

      1.  Large airliners are more fuel efficient per passenger than small aircraft (otherwise it would be cheaper to fly around in private jets).  This means that the average airline passenger will have to pay a carbon tax in the form of increased ticket price while the wealthy people who fly around in private jets will not (although they can afford to).

      2.  Airlines are already doing all that they can to reduce fuel consumption in order maximize profits or minimize losses.  This added red tape will provide no further benefit and will just unnecessarily kill trees to make paper work.

      3.  Synthetic jet fuel is still composed of hydrocarbons and will produce just as much carbon dioxide as jet fuel made from petroleum.

      • Pete Danko

        Interesting comments, adapa. Thanks for posting.

        I think your second point is an especially strong one, especially in an era of high petroleum prices. In a sense, the market might already be taxing commercial air travel.

        However, on your first point, that large airliners are more fuel efficient per passenger than small aircraft — that either seems to be a non sequitur or an argument for taxing private jets on their carbon emissions. (Or are you suggesting that the carbon tax will cause people to switch to flying privately instead of commercially? That prospect seems quite unlikely.)

        As for point three, an airplane using aviation fuels that blend biofuel with conventional fuel certainly emits less carbon than one using simply conventional fuel. The questions are whether such cleaner fuels can be produced at scale in some economically viable way, and whether the process of making a particular biofuel — of which there are many — can itself avoid being a greenhouse gas producer. Solazyme, which grows algae to make biofuel, claims the fuel it made that powered a U.S. Navy helicopter has at least least two-thirds less greenhouse gas emissions than petroleum-based fuels in a life-cycle analysis. More on that here: http://www.earthtechling.com/2011/07/can-aviation-biofuels-justify-the-hype/

        • adapa

           The first point that I was making is that if they are going to tax large airliners, then they should also tax small airplanes.  Otherwise, it would be hypocritical.  This is especially true when you consider the people who are in positions to make these rules are more likely than average people to fly on private jets.

          However, I do concede the point that you are making about bio-fuels.