Budget airlines push for end to carbon market exemption for long-haul carriers

Slovakia is fully dependent on nuclear fuel from Russia. [motive56 / Shutterstock.com]

Low-fare airlines have called on EU lawmakers to scrap the exemption which allows European long-haul carriers to avoid paying for carbon emissions on flights outside of Europe.

In a joint statement, Ryanair, easyJet, Jet2, and WizzAir criticised the Emissions Trading System (ETS) rules for aviation, arguing that the legislation leaves the bulk of emissions from flights departing from EU airports outside of the EU’s carbon market.

The EU ETS obliges airlines to buy allowances for each tonne of CO2 they emit, but only applies to intra-EU flights. International aviation emissions are covered by the UN’s CORSIA, a global carbon offsetting scheme, which is considered less stringent than the EU carbon market.

The joint statement was backed by clean mobility NGO Transport & Environment (T&E), who called it an “anomaly” that there are flights departing from EU airports that are not covered by the EU ETS.

“It’s absurd that people flying to Madrid or Budapest have to pay carbon taxes but far more polluting trips to New York or Singapore are exempt,” said William Todts, executive director at T&E.

According to figures released by air traffic agency EUROCONTROL, in 2020 some 6% of long-haul flights were responsible for around 52% of European aviation’s CO2 emissions.

Given that more than half of emissions are generated by flights of over 4000km, there is no justification to exempt long-haul flights from climate measures, argued Ryanair CEO Michael O’Leary.

“While all airlines claim to be committed to decarbonisation, actions speak louder than words. It is crucial that legislative proposals, such as the Fit for 55 package, apply equally to all flights, regardless of destination or distance,” said O’Leary.

Threat to competitiveness

Legacy airlines have come out strongly against proposals to include long-haul flights in the EU carbon market, arguing it will harm the competitiveness of the EU aviation industry and reduce their ability to invest in innovative low-carbon aircraft.

They also contend that the policy may lead carriers to reroute flights and operations outside of the jurisdiction of the green measures – a phenomenon known as “carbon leakage”.

These concerns are shared by MEP Henna Virkkunen, a lawmaker with the centre right EPP Group and a member of the European Parliament’s industry and transport committees.

“We have to find out the most efficient tools to reduce emissions without hampering our competitiveness. Creating European rules for global industries, such as the aviation industry, cannot lead to air traffic to move into hubs outside the EU in the future,” Virkkunen told EURACTIV.

“With the ETS we need to ensure a gradual transition to safeguard our competitiveness. The European aviation industry needs sufficient time to adapt to the transformation of the sector as a whole,” she added.

However, concerns around carbon leakage are overstated according to József Váradi, Wizz Air Group’s CEO.

“We should not get sucked into unfounded carbon leakage claims made by the big European legacy carriers,” he said.

“If they had their way, their inefficient, hub and spoke long-haul operations would be exempt from the policy. Carbon does not stop at the EU border,” he added.

A study by T&E published in January found that the risk of carbon leakage due to the ETS is low, as additional fuel, staff, and aircraft costs linked to stop-overs outside of the EU would erode any economic advantage.

[Edited by Benjamin Fox]

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