Last reviewed 21 March 2012

Europe’s well-intended attempts to take carbon out of international aviation are on a collision course with much of the world. If not an air-war, then certainly a trade war looms. Jon Herbert reports.

Battle over Britain — European air war

Resistance to January’s unilateral imposition of a carbon tax on any airlines travelling through European skies is so intense that China has been accused of barring the purchase by its airlines of the long-haul A330 Airbus this year and next in retaliation. It is one of 26 nations, including the US, Russia, Canada and India, that see the levy as an anti-competitive measure which simply accrues income to Europe.

With concern also growing that economic recovery depends on sound air links, particularly to Asia, a comprehensive strategy for air travel seems to be called for. The UK could find itself especially vulnerable. Already noted for long passenger queues and inconvenient forward travel connections, UK airports are beginning to compare poorly to their continental and global counterparts.

Heathrow has two direct links to Chinese cities; Frankfurt has 14. Dubai recently opened a new international airport with six runways. Britain is adamantly ruling out any further consideration of a third at Heathrow. A new airport in the Thames Estuary would be a generation away. London could lose its status as an aviation hub and automatic choice for travellers wanting to go onwards to other regional destinations. Jobs, industry and income could suffer.

So critical has the carbon tax issue become that seven leading European airlines have now written to political leaders warning that jobs and trade are at risk. They include British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin, Iberia and Airbus, which says more than 1000 jobs are now risk, with thousands more in the supply chain in jeopardy.

They urge a compromise solution. Better still, plans should be put on hold until a global agreement is reached. The best solution may lie with the International Civil Aviation Organisation (ICAO) which has been discussing a possible aviation emissions code for 14 years.

Legal standing

At the close of 2011 everything looked very different. The European Court of Justice (ECJ) ruled that all flights to and from the 27 EU states would face an emissions charge under the EU Emissions Trading System (ETS) used to charge heavy industrial power users, such as oil refineries, power stations and steelworks, for their CO2 emissions.

The Court explained its decision: “Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the Open Skies Agreement (across the Atlantic),” it said. “It is only if the operators of such aircraft choose to operate a commercial air route arriving at or departing from an airport situated in the EU that they are subject to the emissions trading scheme,” it added. The EU system, therefore, “infringes neither the principle of territoriality nor the sovereignty of third states, since the scheme is applicable to the operators only when their aircraft are physically in the territory of one of the member states of the EU”.

Carriers are due to face bills from 2013 after the current year’s carbon emissions have been totalled. Those that exceed their allocated EU allowance will be required to buy extra permits. Over time, the number of permits issued will be reduced. Thus, the EU calculates that the total CO2 emissions from planes over Europe must inevitably fall.

The world disagreed. Canadian and US carriers said the tax violated climate change and aviation pacts. Four Chinese airlines said the scheme would cost them £79 million. US Secretary of State, Hillary Clinton, said America would respond with “appropriate action” if the scheme went ahead.

In recent weeks, the issue seemed to be moving towards a negotiated settlement. The Chinese and Indian media had commented that aviation and shipping have not been heavily pressured to combat climate change and do not justify a trade war. Suddenly, everything appears to have become more hostile once again. The principle at stake for many countries and airlines is that any form of additional taxation is an uninvited commercial loss that will go to European coffers, despite laudable intentions. The response of most is to impose matching measures to recoup their losses. Any form of trade war is in no-one’s interest. Particularly as Europe hopes to encourage China to help in alleviating the Eurozone crisis and depends on Russia for much of its gas.

Pro-active business

Meanwhile, 70 business leaders, MPs and trade unionists have called on the Government to actively support UK airport expansion as an economic necessity. They include Heathrow, where the Government says it is exploring options other than a third runway. A sizeable lobby believes that the building of a third runway will prove the only practical choice; a “Boris Island” artificial airport constructed in the Thames would have even worse transport connections, they say. The Mayor of London has been leading scoping studies for a new hub air-centre in north Kent that would link to the HS1 rail line to Kings Cross St Pancras. However, there would be major environmental issues.

Among the 70 is Simon Walker, Director General of the Institute of Directors, and Len McCluskey, General Secretary of Unite. In an open letter to newspapers, they point out that Frankfurt and Paris offer 1000 more flights a year to the three largest cities in China. They add: “There are 21 emerging market destinations with daily flights from other European hubs that are not served from Heathrow”.

The letter states: “There is a huge opportunity for the UK to lead in connectivity to growth markets, but we need a hub solution that has the capacity to compete if we are to seize it.

“Growth won’t wait — while there are more ambitious long-term prospects for aviation that can be examined, in the near term Heathrow must continue to be part of the solutions if the UK is not to miss out on vital trading opportunities.

“With economic recovery so fragile, we cannot afford to cut our country off from growth and jobs.”

The 2010 coalition agreement cancelled plans for a third Heathrow runway and refused permission for additional runways at Gatwick and Stansted. In January, 30 Conservative MPs called for a rethink on Heathrow. Labour has said it is “off the agenda”.

The Government is due to review airport capacity later in March.

Technical solutions

Could the long-term answer to all these problems lie in technical solutions? Boeing, Lockheed Martin and Northrop Grumman seem to think so. They have submitted designs that NASA is testing under its Environmentally Responsible Aviation (ERA) project for a twin-aisled commercial jet of similar size to the Boeing 767 or 787 that can simultaneously use 50% less fuel than aircraft introduced into service in 1998, cut harmful emissions by 50% and reduce noise pollution around airports by 83%. Aviation accounts for 3.5% of world greenhouse gas emissions — a figure the Intergovernmental Panel on Climate Change fears could rise to 5% by 2050. Rising fuel costs could also hit airlines badly.

Designs submitted seem to have reached emission and fuel-efficiency goals but are struggling with noise reductions. Seen as “concept planes”, these will now be refined in many ways before, hopefully, leading to a new generation of “green” aircraft in blue skies.

Northrop’s design is reminiscent of its B-2 stealth bomber designs in the 1970s with shielded engines sunk into the wing to reduce noise. Flying wing designs in general are more fuel-efficient as they lack protruding surfaces that interrupt a smooth airflow.

Many innovative ideas have been put forward; which of them will fly is an open question.