Lufthansa CEO calls for ‘sidelining’ EU ETS

The chief executive of Europe’s largest airline urged European Union officials to back down from their steadfast insistence on including airlines its Emissions Trading Scheme (EU ETS), warning that time is running short to avoid a damaging geopolitical standoff over the issue.

International aviation became part of the EU ETS at the start of this year (ATW Daily News, March 28), and carriers will have to make their first payments under the scheme in about a year. Lufthansa (LH) CEO Christoph Franz, speaking Thursday to an International Aviation Club luncheon in Washington, said the timeline for solving the ETS issue “is very urgent since the system is legally in place” and carriers such as LH are already spending “millions” to comply with it.

“It is imperative to avoid a trade war,” he said. “We are already in the middle of the mess [caused by the ETS]. In order to avoid a trade conflict, for the time being we should sideline the EU ETS and get a commitment [from nations throughout the world] to negotiate through ICAO … The speed to move ahead and come to a conclusion [on airline carbon dioxide emissions at ICAO] has not been sufficient.”

Asked to clarify further, he said, “Sidelining [the EU ETS] means we do not apply this legislation for the time being while we negotiate at the ICAO level” (ATW Daily News, March 19).

Franz emphasized that LH is not opposed to an emissions trading scheme in general, but believes the EU ETS is causing “conflict and dissatisfaction” and will potentially lead to a damaging trade war with a range of countries opposing airlines’ inclusion in the scheme. “We need to deal with climate change, there is no doubt about it,” he said. “Lufthansa has always committed to participating in these kinds of cap-and-trade schemes … [but] we have to find a global solution for a global problem.”
source:ATW (March 30, 2012)