The clock may have been stopped for a year, but time is still passing. ‘Stopping the clock’ was a big gesture from the EU. With the world saying it was the EU’s decision to include aviation in its Emissions Trading Scheme (ETS) that was preventing global action to tackle aircraft’s contribution to climate change, the EU said ‘OK, we’ll suspend our action for a year to create the chance for a global agreement.’ Yet so far, little progress has been made and the blame heaped on the EU’s ETS looks more and more like the empty excuse we always thought it was.
Airlines are making so-called ‘windfall profits’ of up to €1.3bn by charging passengers for permits to pollute which they are no longer obliged to hand over to European countries. That is the main conclusion of a study by the Dutch consultancy CE Delft carried out for T&E. T&E, in a statement, called for airlines not to retain these windfall profits - which would, they say, be a betrayal of passengers’ contributions to fight climate change. Instead, the campaign group called for any such profits to fund developing countries’ efforts to deal with the effects of climate change.
Flying in the face of industry claims about the unbearable cost  of including aviation in the EU Emissions Trading System (ETS), air carriers will generate up to an estimated €1.3bn in windfall profits in 2012 alone, a new study by independent consultancy CE Delft reveals.
A new study shows that the aviation industry will receive substantial additional windfall profits from the proposed ‘stopping of the clock’ for flights to and from Europe under the EU Emissions Trading System (ETS). Airlines should not retain these windfall profits – that would be unjust, self-serving and a betrayal of passengers’ contributions to fight climate change - but give them to the UN’s Green Climate Fund established to assist developing countries tackle the impacts of climate change.
The European Commission has proposed a one year “stop the clock” derogation for the aviation portion of the EU Emissions Trading System (ETS) Directive to provide ‘breathing space’ for the International Civil Aviation Organisation (ICAO) to come to a global agreement on regulating international aviation emissions. The derogation applies to all flights to and from Europe (including EFTA states and Croatia) except intra-European flights.T&E regrets that the Commission has been put in this difficult position through international pressure, particularly from the US.
In October 2012 the European Commission launched a public consultation on 'Review of existing legislation on VAT reduced rates'. T&E has been campaigning to abolish the reduced rates for international passenger transport for years due to the harmful competitive distortions caused by those rates and the implicit subsidy it provides for passenger transport, especially in the aviation sector.
The coalition of American aviation interests that challenged the EU’s right to introduce emissions trading to air transport has abandoned its legal action. A group of six NGOs welcomed the decision, but said the airline coalition’s failure to accept December’s ruling by the European Court of Justice suggests the Americans may be moving the battlefield elsewhere.
United, American Airlines, and their trade association, Airlines for America, gave up on a lost cause, a late and ill-conceived legal challenge to the European Union’s landmark law limiting global warming pollution from aviation.
This briefing highlights quotes from two IATA reports, from 2001 and 2007, that show the aviation industry initially supported the concept of emissions trading for aviation, going as far as calling it a "no brainer" that would "maximise gain". However, more recent quotes from the organisation's CEO show that now the EU has led efforts to actually introduce such a scheme, IATA has changed its mind and launched an all-out attack against it.