Despite opposition from a number of countries to the inclusion of non-EU aviation operators within the EU Emissions Trading Scheme (ETS), the European Court of Justice (ECJ) rejected a lawsuit challenging the legality of including emissions from flights to and/or from Europe within the Scheme. Therefore, from 1 January 2012, all such flights will be covered by the EU ETS and aviation operators will be required to monitor, report, and surrender allowances for the emissions generated by these flights.
Dr. Ashley Steel, head of transport at KPMG, said: “For aviation operators with flights departing and/or arriving in Europe, this will place a significant compliance burden with associated costs. However, by proactively managing this burden and putting in place a holistic carbon management strategy, supported by robust and efficient policies, systems and processes, it may possible for the impact on aviation operators to be mitigated in part.
“Nonetheless, this will place an additional cost pressure upon the sector at a time when air operators are already being squeezed by the recent increase in UK Air Passenger Duty and continuing global economic turmoil.
“For the European carbon market, when viewed alongside yesterday’s first successful vote in the European Parliament to withhold some 1.4bn of emissions allowances from 2013-2020 (although this proposal is unlikely to survive in its current form), the ECJ decision may potentially provide some relief from the recent downward pressure on prices.
“It is important to note that this is not the end of the matter. We would anticipate opponents of the scheme to continue pursuing their resistance to the Scheme through unilateral domestic legislation and multilateral action at the International Civil Aviation Organization.”
For further information please contact:
Arti Mohan, Corporate Communications
Tel: 020 7694 8735
Mobile: 07768 858 085
KPMG Press Office: 020 7694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.