Airlines Set to Join EU Emissions Trading Scheme

Airlines Set to Join EU Emissions Trading Scheme

The European Union formalized its decision last week to include airlines flying in and out of the region in the bloc's greenhouse gas emissions cap-and-trade system.

The airlines have long resisted inclusion in the trading scheme and warned the additional costs will hurt an already troubled industry and force air fares higher. The airlines are slated to join the EU Emissions Trading Scheme in early 2012.

The International Air Transport Association accused the bloc of living in a bubble for including the industry in the ETS. Meanwhile, it reported last week that international passenger air traffic dropped 2.9 percent in September in the largest decline since the 2003 SARS incidents.

"Crisis is not the time for rubber stamps," IATA Director General Giovanni Bisignani said in a statement. "But that is exactly what the the Council of Justice and Home Affairs Ministers used today — without a word of debate — to seal into law the EUR 3.5 billion cost of bringing airlines into the European ETS."

The trade group argued for a global approach to effectively fight climate change, as well as the Single European Sky initiative to rein in emissions and make the skies less congested.

The EU estimates airfares will grow by as much as $12 for trip within the bloc, and as much as $50 for transcontinental flights, the New York Times reported.

The U.S. airline industry recently touted its efforts of reducing fuel consumption nearly 3 percent between 2007 while passenger and cargo traffic grew more than 20 percent.