Panagiotis Karamanos & Michael O’Connor* Environmental Experts, in EU-India Collaboration...
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Panagiotis Karamanos & Michael O’Connor*Environmental Experts, in EU-India Collaboration
“Institutional Capacity Building for the Civil Aviation Sector in India,”
from Athens International Airport
June 24, 2011*This document represents the views of the above authors only
Climate Change and the European Union’s Emission Trading Scheme
The Challenge for Indian Airlines
1. European Union’s approach to climate change
2. Aviation and the Emission Trading Scheme
3. Responsibilities of Indian airlines
Discussion
European Union’s response
Ratification of Kyoto Protocol by all EU Member States in 2002
EU target: 8% reduction distributed amongst its Member States (e.g. Germany -21%, UK -12.5%, Greece +25%)
Generally aggressive position on climate change compared to other developed nations as shown by 2020 targets: Reduce GHG emissions by at least 20% vs. 1990
Increase share of renewable energy to 20%
Increase energy efficiency by 20%
Comprehensive policy and instruments to back up 2020 targets including the world’s largest Emission Trading Scheme (ETS) for GHGs
EU Emission Trading Scheme Established through Directive 2003/87/EC
Covers 10,000+ installations (>20MW) ~50% of EU’s CO2
Member States set National Emission Caps and allocate allowances for free and increasingly by auction
Participants exceeding their allowed emission quota may purchase allowances from other, cleaner participants, purchase approved emission reduction credits through Clean Development Mechanisms or Joint Implementation projects, or pay a fine
1st Trading Period: 2005-2007 completed
2nd Trading Period: 2008-2012 in progress
Annual monitoring, verification & reporting of emissions
CO2 Emissions by Sector
2%
2%
11%
15%
33%
24%
13%
Road Aviation Chemicals & CementLand Use Change & Forestry Light, Electricity, Heat Other Energy & IndustryOther Transportation
Multiple contributors & stakeholders Airport operators 5% of the 2% share (i.e. 0.1% of
the
emissions) is attributable to airports
Greater airport community (handling, cargo, retail, etc.)
Passengers (business, tourism)
International Civil Aviation Authority (ICAO) and local Civil Aviation Authorities
Airlines
Aircraft manufacturers
Engine manufacturers
What are airports doing about climate change?
Airport Carbon Accreditation ““ACI EUROPE and its ACI EUROPE and its
members commit to reduce members commit to reduce carbon emissions from carbon emissions from airport operations fully airport operations fully
within their own control with within their own control with the ultimate target to the ultimate target to
become carbon neutral.”become carbon neutral.”
Level 1: Mapping Ankara, Antalya, Bologna, Budapest, Chisinau, Cork, Dublin, Dubrovnik, Farnborough, Istanbul, Izmir, Portuguese Airports, Prague, Shannon, Toulouse-Blagnac Airport
Level 2: Reduction Athens International Airport, Brussels, Charles de Gaulle, Frankfurt, Hamburg, Kristiansand, Manchester, Orly
Level 3: Optimisation
Amsterdam, Heathrow, Gothenburg, Munich, Zurich
Level 3+: Neutrality
Göteborg Landvetter, Linate, Malpensa, Oslo, Stockholm, Trondheim, Umea
Levels of accreditation & participants
Athens International Airport
Accredited at Level 1 (Mapping) in 2009
Upgraded to Level 2 (Reduction) in 2010
Emission reduction target:
25% reduction in CO2 emissions (Scope 1 and 2)
by 2020 using 2005 as a baseline year
Climate Change Corporate Action Plan since 2008:
Conversion of vehicles to LPG / purchase of hybrid vehicles
Investment in energy-saving technology (hardware & software)
50% recycling rate target for 2012 / use of recycled materials
Vravrona wetlands protection programme
8MW photovoltaic park under construction
Multiple contributors & stakeholders Airport operators 5% of the 2% share (i.e. 0.1% of
the
emissions) is attributable to airports
Greater airport community (handling, cargo, retail, etc.)
Passengers (business, tourism)
International Civil Aviation Authority (ICAO) and local Civil Aviation Authorities
Airlines
Aircraft manufacturers
Engine manufacturers
What about aircraft emissions?
In 2009 the States belonging to the International Civil Aviation Organisation (ICAO) agreed to the following: a global goal of 2% annual improvement up to 2050
further explore more ambitious emission reductions including carbon-neutral growth
development of a global CO2 standard for aircraft
development of a framework for market-based measures, such as emissions trading, in international aviation
further financial and technical assistance to States
submission of States’ action plans which outline their policies and actions as well as annual reporting of aviation fuel consumption.
What about airlines?
IATA’s (International Air Transport Association) 4-pillar strategy calls for improvements in:
Technology (airframe design and materials, engine efficiency, alternative fuels, etc.)
Operational Efficiency (aircraft and ground operations)
Infrastructure (Air Traffic Management, airport capacity)
Economic Instruments (emissions trading, emissions charges)
Challenge: to be environmentally effective and economically feasible
Inclusion of aviation in EU ETS
EU is implementing the first ETS to address aviation
Aviation included in EU ETS through Directive 2008/101/EC
All (European and foreign carrier) flights landing at or taking off from airports in EU Member States
De minimis: airlines with less than 1 round-trip flight to / from the EU per day are exempt as well as some types of flights (training, military, research, etc.)
Inclusion starts in 2012 and continues through next period: 2013-2020
Inclusion of aviation in EU ETS Benchmark set at average of 2004-2006
emissions in order to account for considerable growth in aviation since 1990
Emissions cap: 97% of benchmark in 2012 decreasing to 95% in 2013
Allowances allocation (2012): 85% free/15% auctioned
Allocation is determined by an airlines’ share of tonne-kilometers 2 years earlier, e.g. 2010 share for 2012
Participants exceeding their allowed emission quota may: purchase allowances from other participants (airlines and thermal
installations)
purchase approved emission reduction credits
or pay a fine
Indian carriers & EU Administering Member State
UK
Air India, Jet Airways India
France
Go Airlines, Indigo, Jet Lite India Ltd
Cyprus
Kingfisher Airlines
Requirements for Indian airlines
For those Indian airlines flying into / out of European airports meeting the criteria for inclusion in the EU ETS must have already:
submitted an annual emissions and tonne-kilometer monitoring plan in August 2009 for approval by the relevant EU Member State
started monitoring emissions and tonne-kilometer data since January 2010
submitted externally verified emissions and tonne-kilometer data for 2010 by March 2011 (and every March thereafter)
receive free allowances based on benchmark calculation in February 2012
2012 and beyond
Source: VerifAvia
A simplified exampleof how the EU ETS works
How are 2012 allowances allocated?
Average 2004-2006 emissions: Average 2004-2006 emissions: 200,000 200,000 tonnestonnes
2012 Cap: 2012 Cap: 194.000194.000
Free allowances: Free allowances: 165.000165.000
Auctioned allowances: Auctioned allowances: 29.00029.000
How will the 165,000 free
allowances be allocated between
airlines?2010 Tonne-Kilometers = 2010 Tonne-Kilometers = Σ Σ (Payload x (Payload x
Distance)Distance)
Calculate Tonne-Kilometers of Air Greece: Calculate Tonne-Kilometers of Air Greece: 500,000 TK 500,000 TK ((50 50 %)%)
Calculate Tonne-Kilometers of CleanAir: Calculate Tonne-Kilometers of CleanAir: 300,000 300,000 TK TK ((30 %30 %))
Calculate Tonne-Kilometers of PropellAir: Calculate Tonne-Kilometers of PropellAir: 200,000 TK 200,000 TK ((20 20 %%))
TOTAL Tonne-Kilometers:TOTAL Tonne-Kilometers: 1,000,000 TK1,000,000 TK
2012 Free Allowances: 2012 Free Allowances: 165,000165,000
Air Greece:Air Greece: 82,50082,500
CleanAir:CleanAir: 49,50049,500
PropellAir: PropellAir: 33,00033,000
How much did my airline emit in
2012?
Airline Fuel Consumption(tonnes CO2)
Emissions
Air Greece 26,190 82,500
CleanAir 12,000 37,800
PropellAir 15,000 47,250
Emissions = Mass of Fuel Consumed
x 3.15 tonnes CO2 per tonne Fuel
Does my airline have enough allowances for
2012?
Airline Emissions Allowances Status
Air Greece 82,500 82,500 OK
CleanAir 37,800 49,500 Sell
PropellAir 47,250 33,000 Buy/Invest
Concluding Remarks
Inclusion of aviation in EU ETS is a reality
Rules are relatively clear
EU ETS is somewhat flexible
Several Indian airlines are required to participate
Actual impact to be evaluated in 2013 and beyond