EU aviation deal may benefit New Zealand

The EU's emissions scheme will impose costs on all airlines flying into and within the bloc which could rise to the equivalent of $80 per passenger for long-haul flights between New Zealand and Europe. Photo / Paul Estcourt.

European Union aviation negotiators will look closely at New Zealand's emissions trading scheme while hammering out what could be a ground-breaking deal to open access to Europe.

The EU's own emissions scheme will impose costs on all airlines flying into and within the bloc which could rise to the equivalent of $80 per passenger for long-haul flights between New Zealand and Europe.

This is in addition to "environment" levies imposed by individual member states.

An EU negotiator, Mark Nicklas, said it was hoped the agreement would be concluded next year and would have a significant environment component in it.

"Air New Zealand could benefit from exemptions that are possible under the ETS. If we come to the conclusion that equivalent measures are in place then flights arriving from New Zealand could be exempt from our system."

However, the New Zealand system relates only to emissions from domestic flights rather than international services.

The agreement could still hold benefits for New Zealand as it may eliminate limits on the number of flights to EU countries and the airports served.

Under what would be reciprocal arrangements, carriers could pick up passengers within Europe and fly them on to another country.

The negotiations started late last year and are due to resume within the next few months.

Open skies agreements are reasonably common but the EU's "ambitious agenda" went well beyond that, Nicklas said.

"We want to have comparable regulatory bodies on both sides, so we don't have a double burden on the industry."

There were moves to have across-the-board safety regulations imposed by Europe, but the air services agreement could eliminate this requirement, meaning New Zealand standards would be recognised there.

"We see New Zealand as a like-minded aviation partner where we would go as far as possible. For Europe to be frank, the commercial upside is relatively limited because no carrier is operating there."

Nicklas said there was broad agreement on most of the issues but the more sensitive issues revolved around airline ownership and the environment.

From 2012 a EU-wide cap on aviation emissions will be set at 97 per cent of the average annual emissions for the years 2004-2006. Airlines will have to buy 15 per cent of their allowances under this cap through an auction after initially receiving 85 per cent free of charge.

It would apply to the nearest point to Europe meaning the second leg of an Auckland-London flight, from Los Angeles for example, would be caught in the scheme. Money raised will be used for environmental programmes throughout Europe.

David Batchelor from the EU's directorate-general for transport and energy said the body wanted to avoid double taxing or triple taxing of airlines as they pass through different emissions regimes.

"There's a need to ensure that whatever measures taken around the world relating to international aviation don't result in a patchwork of measure which in the worst case would duplicate burdens on industry."

Critics of the European scheme have questioned why aviation is even in it given its small carbon footprint compared to other sectors yet large contribution to global commerce.

The International Air Transport Association's director-general Giovanni Bisignani last week labelled the scheme "unilateral, extraterritorial and illegal" while announcing the industry's aim to cut fuel consumption by 1.5 per cent a year and become carbon neutral by 2020.

In the leadup to the United Nations Framework Convention on Climate Change meeting in Copenhagen this December the association is pushing for a global agreement on how to charge for emissions.

Batchelor said Europe was bound by its Kyoto obligations. It is estimated the new rules will result in a reduction of 190 million tonnes of carbon dioxide a year by 2020.

"If there is an agreement on global measures then the EU will consider adapting its scheme accordingly. It remains to be seen whether there will be some sort of global framework."

CUTTING EMISSIONS

The EU view: Aviation is compelled to contribute to fighting climate change.
Airline view: A global approach rather than from one country or bloc of countries, to avoid double taxation.