DUBAI (Reuters) - Emirates, Dubai’s flagship carrier, said the European Union’s planned carbon emission scheme may cost it as much as $1 billion over 10 years, as it joined others airlines in objecting to the tax.
From January, airlines flying to or from Europe will have to buy permits from the EU’s emissions trading scheme (ETS) for 15 percent of the carbon emissions produced during the entire flight.
“It (the scheme) will have a very significant impact on Emirates,” Andrew Parker, Emirates’ senior vice president for industry and environmental affairs, said at a conference in Dubai.
“It’s safe to assume somewhere around $500 million to $1 billion range over the first decade of the scheme is likely,” he said, when asked about how much ETS would cost the airline.
About a quarter of Emirates’ global operations are in Europe, said Parker. All will be subject to ETS.
Airlines around the world have warned of a looming trade war due to the scheme, but the EU says it will not back down. The carriers say their emissions should only be tackled in United Nations bodies, such as the International Civil Aviation Organization (ICAO).
“We do not feel this scheme represents the best global approach to try and reduce aviation’s impact,” said Parker.
“Our single biggest concern is that there will be billions raised from the scheme but none of that will go back into research and development, environmental programs and projects that help aviation.”
U.S. airlines stepped up their campaign against the EU’s climate policy last month, challenging them in its highest court over the right to regulate their greenhouse gas emissions.
Last week the Arab Air Carriers Organization (AACO) asked Europe not to include the aviation sector in the ETS scheme.
Emirates, the Arab world’s largest carrier, said it is fully compliant with the rules of the ETS but is watching closely the multiple lawsuits filed by other airlines against the EU.
Reporting by Praveen Menon