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Global resolution for the aviation sector : a historic step forward

A first on a worldwide scale: on the 8th of October 2010 in Montreal, 174 member countries of the International Civil Aviation Organization (ICAO) adopted a resolution to reduce the industry’s emissions. The agreement includes a target to improve the energy effi ciency of international aviation by 2% 3 per year until 2020, it also commits to stabilising net emissions and setting up a market-based regulatory framework for offsetting. Air France-KLM welcomes this resolution, which fi nally recognises the need for a global sectoral commitment.

Air France-KLM supports effective environmental regulation

As from 2012, the aviation industry will come under the EU Emissions Trading Scheme (EU ETS). Air France-KLM has welcomed this cap-and-trade mechanism, which it believes to be more effective than a straightforward tax, if no competitive distortion occurs. The Group considers that the revenues generated by government as result of auctioning emissions rights should be allocated to improving the airline industry’s environmental performance.

The cap-and-trade mechanism will have a significant environmental impact because aviation emissions will be capped at a level below their 2005 average. Nevertheless, its efficiency relies on it being implemented across the board.

All flights to and from Europe will be concerned, regardless of carrier. For 2012, a cap has been set for the sector of 3% (rising to 5% later) below average sector emissions between 2004 and 2006. The quotas will be allocated to each carrier proportionally to its activity measured in freight tonne-km in 2010. Some 15% of the quotas will be auctioned. Carriers will also need to purchase any shortfall in their required quotas on the open carbon market.

All Air France-KLM group flights will be concerned. Active preparations for application of the Directive went forward in 2009. The year was marked by the submission of airline emissions and activity monitoring plans. The Air France and KLM plans were approved in December 2009.

Air France-KLM's stance on the european emission trafing scheme
The European Union system for trading greenhouse gas quotas (EU-ETS) will apply to the aviation sector from 2012. Air France-KLM believes that a responsible international aviation industry should contribute to CO2 emissions reduction. Because it is not technically feasible for aviation to reduce its emissions alone, it will fi nance reductions achieved in other sectors through Emissions Trading Schemes (ETS). However, Air France-KLM believes that the scheme will only be effective if all airlines worldwide are included. This would also ensure that traffic is not diverted to non-European hubs, which would create carbon leakage and lead to unfair competition. To date, the inclusion of non-European airlines in the scheme is contested and is subject to legal challenge by airlines from non-EU countries. Air France-KLM remains vigilant that the scheme is applied fairly.

Playing our part in collective efforts

Air France-KLM plays a key role in the International Air Transport Association (IATA) in order to work on solutions to ensure that environmental targets set by the Annual General Meeting in 2009 are reached :

  • from now until 2020, to improve energy efficiency by 1.5% per year;
  • from 2020, to ensure the stabilisation and neutral growth of CO 2
    emissions
    ;
  • by 2050, 50% reduction of CO2 emissions compared with 2005 levels.

Because the international airline business is by its very nature a global activity, its emissions can only be effectively curbed if they are part of a global approach to the sector. Consequently, Air France KLM has actively contributed to developing practical proposals for its sector, either through the Association of European Airlines (AEA) or a specially convened group of other deeply committed partners, the Aviation Global Deal Group (AGD).