Costs and Benefits of Stopping the Clock: How Airlines Profit from Changes in the EU ETS

[aka “Costs and Benefits of Stopping the Clock: How Airlines Profit from Changes in the EU ETS”] CE Delft for Transportation & Environment / by Dagmar Nelissen and Jasper Faber
http://bit.ly/TePHZ4

[Business Green]  Airlines stand to make around €1.3bn in “windfall profits” over 2012 as a result of EU carbon regulations, according to a new report that runs contrary to aviation industry claims.

The biggest winners are likely to be EU airlines, which are projected to gain €758m, almost twice the €400m they were estimated to make in 2011, according to the new analysis commissioned by campaign group Transport & Environment (T&E).

Regulations forcing carriers to surrender permits to cover carbon emitted on all flights in and out of EU airports came into effect at the start of 2012. Although airlines were given 85 per cent of the allowances for free, they had claimed that regulations would impose costs upwards of €10bn by 2020.

But the report finds airlines have not only been raising fares to cover the cost of the 15 per cent of permits they need to purchase, but they have also been passing on the supposed “cost” of the free permits, resulting in windfall profits.

It says these profits could amount to around €870m for all airlines, if the full value of the free permits were charged to passengers…

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