Slide 1: Aviation and the EU ETS
Aviation and the EU ETS April 2010
Slide 2: Background - the environmental challenge for airlines
Background - the environmental challenge for airlines Aviation is currently responsible for less than 2% of global greenhouse gas emissions. However, the external challenges are becoming more onerous: Aviation emissions are growing rapidly Governments see aviation as a soft target for taxation
Slide 3: easyJet
easyJet easyJet has grown to become Europe‟s third largest intra- European airline The business model is focused on a single mission – short-haul operations using „150‟ seater new technology aircraft in point-to- point markets Operating a distributed network across Europe 185 aircraft flying
Slide 4: Aviation and Eu ETS
Aviation and Eu ETS The EU published the Directive on the inclusion of aviation in EU ETS in January 2009 and the legally binding implementing guidelines for the Monitoring & Reporting were adopted by the European Parliament in April. Operators will receive emission allowances, giving them the r
Slide 5: The Benchmark
The Benchmark Airlines will receive free permits in accordance with their share of the Revenue Tonne Kilometres (RTKs) flown in 2010 RTK is a measure of how much you fly (in tonnes – passengers are converted into weight) and how far you fly it – effectively a measure of economic output RTKs ca
Slide 6: Where we are in the process
Where we are in the process Airlines assigned to Commission calculate Regulator Regulator acknowledges verified Member State ETS benchmark used to publishes final emissions report regulators allocate allowances allocations to and number of each operator Operators surrender equivalent allowances to b
Slide 7: How ETS affects airlines – macro level
How ETS affects airlines – macro level Two key factors determine the cost of ETS for airlines: The business model The number of free permits they receive - a function of how well they perform on the benchmark The extent to which free permits cover emissions - which depends on the total amount
Slide 8: How ETS affects airlines – route level
How ETS affects airlines – route level The two key drivers to environmental efficiency are seat density and load factor Example: the same modern aircraft flown on the same route easyJet A319 Traditional airline A319 156 seats 124 seats (source: Airbus) 85% load factor 68.9% load factor (source: AEA
Slide 9: Where is ETS Going?
Where is ETS Going? Non-CO2 impacts Very unlikely ETS will be adjusted to take account of aviation non-CO2 emissions The EU Commission has already signalled it will take a different approach to these impacts Possible future global framework to manage aviation emissions The Copenhagen summi
Slide 10: Summary
Summary easyJet takes its environmental responsibilities seriously Investments in new technology are critical to ensuring a sustainable future easyJet is supportive of a well designed ETS for aviation easyJet’s business model can and will adapt to a carbon constrained world 10
Slide 11: Key Elements of the Directive
Key Elements of the Directive Key design element Proposal Geographic scope All departing and arriving flights at European airports. Coverage of climate impacts CO2 only. Additional legislation to address NOx emissions was to be proposed by the end of 2008. Allocation method 85 per cent of the aviati
Slide 12: Key Elements of the Directive
Key Elements of the Directive Decision on allocation rules Harmonisation at EU level. Special reserve Creation of a reserve for new entrants and fast growing airlines from within the cap, 3% of the total capped allowances for that phase. Allocated to new operators and those whose activity data shows