Contact: James Igoe
Deloitte
Public Relations
+44 (0)20 7303 8247

The European Union announced today that the aviation industry is to be included in the European Trading Scheme (ETS). The ETS provides industry with a quota of greenhouse gas emission permits and allows companies to trade these rights.  However, until now the aviation industry has been excluded.

Commenting on today’s decision, Robin Pratt, transport economics consulting director at Deloitte said:

“Today’s announcement marks a milestone in the journey towards making Europe’s air transport sector more sustainable.

“However, despite long-standing British support for such a move, the lead times involved in getting European consensus and planning for the new arrangements mean that they will not directly affect airlines and passengers until around 2011, the end of Phase 2 of the EU-ETS.  British passengers are likely to pay their “green levies” via the Chancellor’s Air Passenger Duty until then.

“However, the inclusion of aviation in the EU-ETS could pave the way for much more important developments after 2012, when non-EU international flights will be included in a third Phase of the scheme.

“The details of this later scheme, including the ways in which it might link with emerging trading schemes in the US, are still to be developed. As the IPPR observed this week, the "devil will be in the detail", with winners and losers determined by the mechanisms used for allocating allowances and carrying them over between Phases.

“Over the same period though, the future shape and impacts of EU/US aviation "open skies" liberalisation is likely to emerge, while the European Commission has also promised new legislation on airport charges and is studying how to introduce slot trading. All these international developments, alongside national tax policies and prevailing fuel prices, are likely to influence the commercial responses of individual airlines to the new emissions trading rules."

Ends

Note to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT. 

Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. 

The information contained in this press release is correct at the time of going to press.