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            september 18, 2019

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GACAG calls on EU to suspend application of EU ETS ‘tax’ to aviation


The Global Air Cargo Advisory Group (GACAG) urged the EU to draw back from implementing the EU Emissions Trading Scheme (ETS) for aviation. Implementation, which is scheduled to take effect this month, will spark a divisive and ultimately costly dispute with the international community and the global aviation industry, including the air cargo sector and its customers, says GACAG.
GACAG is responding to the recent European Court of Justice Decision (21 December 2011) regarding Airlines for America’s legal challenge to the unilateral application of the EU ETS to international aviation. The Decision effectively paves the way for the EU ETS to be implemented for the aviation sector in 2012. 
The EU’s intention to apply its Emissions Trading Scheme has drawn a strong rebuke from many countries, including the United States, India and China, who have challenged the EU ETS on legal and policy grounds. They have urged the EU and its Member States to suspend application of the EU ETS and to return to multilateral efforts to develop international C02 emission standards within ICAO and other appropriate international fora. 
Chris Welsh, Secretary General of the Global Shippers’ Forum (GSF) -one of the GACAG’s four founding members - and Chairman of the GACAG Sustainability of the Air Cargo Industry Task Force said, “The Global Air Cargo Advisory Group wholeheartedly agrees with this position. We believe the EU should fully support the agreed ICAO framework for developing appropriate market based measures (MBMs), including the possibility of emissions trading schemes, voluntary and other efficiency based measures.   The absence of an international framework will be chaotic and will unnecessarily cost the air cargo industry and its customers tens of millions of dollars at a time when the global economy is so fragile, and when every effort is being made to stimulate global demand. 
“International aviation is not a luxury; it is part of a complex international supply chain upon which global trade is dependent. Every day essential products such as pharmaceuticals, healthcare equipment and fresh produce are shipped by air. Consumers can expect to pay more for these items plus many others at a time when they are already struggling with economic uncertainty and rising costs. Every effort is now needed to stimulate demand and employment in a flagging global economy.   World-wide demand for air cargo services, considered by economists to be a barometer of the state of the global economy, shows the recovery is weak.  This is an indication that consumers simply will not be able to pay higher prices. This will have a direct impact on manufacturers, growers and the entire freight forwarding and logistics industry.  The E.U. needs to fully evaluate the wider economic consequences of its actions before pressing ahead with the EU ETS.” 
His comments came as GACAG reinforced the views of its other members – the International Federation of Freight Forwarders Associations (FIATA), the International Air Transport Association (IATA) and The International Air Cargo Association (TIACA) - that the correct way forward would be for the International Civil Aviation Organization (ICAO) to develop a global agreement on aviation carbon emissions. This would be in keeping with the recommendations of The Kyoto Protocol which designated ICAO as the body with authority to set international aviation’s greenhouse gas policy.  
Despite mounting international pressure from governments and businesses, including from within the E.U., the European Union still seems intent on moving forward with the ETS.  
“The ETS will curtail investment by the air cargo industry that could otherwise be invested in new technologies and efficiency measures to reduce carbon emissions. We hope that the EU will listen to growing concerns by industry and consumers and work with industry representatives in developing alternative options for reducing carbon emissions in the most cost-effective way without undermining the fragile state of the European and wider global economy,“ Welsh added. 
GACAG members have highlighted key concerns about the ETS to the Climate Action Commissioner at the EU, stating it was in violation of international law and treaties. They have also said that imposing massive new taxes on aviation is unlikely to improve the environment.

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