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Cathay Pacific says EU emissions trading scheme is "extremely discriminatory"

11 Aug 2011

Cathay Pacific stated that applying the European Union’s carbon emission scheme to the aviation industry would be “extremely discriminatory and confusing for the passengers,” joining a string of international airlines that object to the scheme.

Chief executive of Cathay Pacific, John Slosar, said: “We understand and accept the principles that emissions should be priced. However, we do not support having independent regional systems.

“It is extremely discriminatory in that one airline may be taxed more than other airlines,” he added, referring to the varying levels of taxes depending on the duration of each flight. This could be confusing for the passenger since the additional costs of the scheme would ultimately be handed down to them. 

The EU’s Emissions Trading Scheme (ETS), launched in 2005, aims at reducing greenhouse gas emissions through a “cap and trade” principle, which places a limit on emissions and requires polluters to buy permits when exceeding the limit.

Currently, the scheme regulates emissions from “power stations, combustion plants, oil refineries and iron and steel works,” states the EU’s website. From January 1, 2012, all airlines flying in, out and within Europe will also be obliged to be included in the ETS system.

Cathay Pacific isn’t alone in voicing these concerns. The National Airlines Council of Canada (NACC), which represents Air Canada, Air Transat, Jazz Aviation and WestJet, also condemned the initiative. George Petsikas, president of the NACC, stated that the nature of the scheme is “flawed and illegal, which in actual fact undermines global efforts to combat climate change.”

The US Air Transport Association, the China Air Transport Association (CATA) and the Arab Air Carriers Organisation (AACO) have also expressed doubts at the legitimacy of the scheme. According to the CATA, the ETS scheme would cost Chinese carriers approximately US$123.6million per year adding another cost to the aviation industry, which is already mired in several taxes and bogged down by rising jet fuel prices. 

All these associations instead support a global approach. “It is a global issue and therefore needs a global solution,” said Christopher Pratt, chairman of Cathay Pacific.

Slosar added: “We support the Aviation Global Deal (AGD) Group, which looks to provide a uniform and transparent scheme for pricing emissions.” Other carriers supporting this group include British Airways, Air France-KLM, Qantas Airways and Virgin Atlantic.

For more details on the EU ETS, click here and for more information on the AGD Group, visit www.agdgroup.org

Alisha Haridasani

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