Emission control

Much hot air has been expended on the subject of the airlines’ contribution to global warming and the introduction of emissions trading schemes (ETS) as a potential solution. But the facts are starkly simple: several national or regional schemes are in development, and the airlines of the Middle East will find themselves having to comply with at least one of them just three years from now.

Despite some recent slips in the timetable, the European Union remains set on requiring all airlines operating into its airspace to accept a cap on their CO2 emissions from 2012 and, if they break their limits, to buy offsetting credits from better-performing carriers or other sources.

The countdown was to have begun at the end of this August, when each airline was due to submit a plan for monitoring, verifying and reporting its emissions to the authorities of its allocated “administering country”. But, as the summer drew to a close, the European Commission had still to announce a final list of which nations would be responsible for which carriers. As a result, Britain ’s Environment Agency has pushed the deadline back to this month, while the German Federal Environment Authority plans to give the airlines six weeks to make their submissions once the list of responsible countries has been published.

The airlines’ breathing space will be brief, however, because the next deadline is already looming. From the beginning of January the airlines must start monitoring and recording their emissions in accordance with plans that they have still to file and that the responsible authorities have still to approve. But all the indications are that the Europeans will stick to that timetable despite US pressure to extend it in proportion to the initial delays.

These developments have added to the demands of a schedule that Abdul Wahab Teffaha, secretary-general of the Arab Air Carriers Organisation (AACO), describes as both very aggressive and fraught with financial hazards for airlines that fail to prepare properly. “The air transport industry has little experience in this domain,” he said. “And the penalties for non-compliance are very heavy.”

Even if they do master the process, the airlines can expect some hefty bills once the European ETS scheme gets under way. “On average carriers will have to pay for carbon credits to cover 26 per cent of their emissions,” Teffaha estimated. “But the figure for the Arab airlines is likely to be double that to begin with, and can be expected to grow in the short term. In its first year, the scheme will cost the AACO airlines around €200 million.”

Fortunately for their bottom lines, the AACO carriers had been working to ready themselves for a full year by the time the outline requirements of the scheme were published in November 2008. “At AACO we started planning in October 2007 to prepare the Arab airlines for an emissions trading regime,” Teffaha recalled. “The first step was to make the membership aware of the issue. Even now awareness among airlines worldwide isn’t as high as it should be.”

AACO is being supported in its efforts by international airline IT and communications provider SITA. “Because mistakes could prove to be very expensive, we decided to find a partner who had already begun to address the problem,” explained Teffaha. “Six companies responded to our request for proposals and SITA stood out as the most knowledgeable about the intricacies of ETS in aviation, and the best able to produce a solution minimising the possibility of costly errors in reporting emissions.”

Geneva-based SITA built its expertise with the help of a 24-airline working group formed last year. Called the Working Group for Environmental Regulations Implementation, it aims to help the industry drive down the cost of ETS compliance and to ensure that operational efficiency is not compromised.

This summer the company unveiled the first results of its efforts – the Aircraft Emissions Manager monitoring, reporting and verification software tool. Described as the first of its kind in the world and featuring powerful data processing and data mining capabilities, it has been tested by a total of four airlines from the Middle East, the United States and Europe . SITA verified against external records the accuracy of the data it extracted from the airlines’ flight records, and has now perfected ways of gathering the required information and making it available to governments and other regulatory authorities.

Conscious of the commercial burden that emissions trading will impose on the airlines, SITA has striven for an economically effective solution. “One of the drivers behind the working group was the need to understand how we could help airlines to control their data and demonstrate compliance without suffering undue financial consequences,” said SITA environment programme head Frederic Falise. “Aircraft Emissions Manager will reduce both the cost of verification and also the chances of litigation between airlines and regulators.”

AACO is the first airline representative body to recommend that its members adopt the system, which has just been released to the market. “Following extensive consultations and successful testing, we’re pleased to report that a large number of our members have adopted Aircraft Emissions Manager,” said Teffaha. “We’re satisfied that it will allow our member airlines to provide 100 per cent accurate data so that we get a fair deal under the European ETS.”

SITA is already supporting the 12 carriers that are working to the European timetable – Afriqiyah Airways, Air Cairo, the EgyptAir group, Jordan Aviation, Kuwait Airways, Libyan Airlines, Middle East Airlines, Oman Air, Royal Jordanian, Saudi Arabian Airlines, Syrian Arab Airways and Yemen Airways. Under a joint consultancy agreement the organisation has helped the airlines to prepare their plans and will guide them through the coming months until the required monitoring and reporting routines have been fully implemented. SITA is also advising a number of carriers in other regions.

“The parameters required by the Europeans are well defined,” said Teffaha. “SITA is working with our members to identify where the relevant data – quantity of fuel burned, how much CO2 is emitted, passenger load per flight – resides in their information systems. The information is then checked for accuracy and integrated in preparation for the day when we have to start submitting formal reports.”

Together, SITA and the Arab carriers are currently marching to the beat of the European drum. But both make no secret of their enthusiasm for a single global scheme.

Australia , New Zealand and Japan are developing schemes for introduction in the next two or three years. The USA is expected to move soon under the impetus of a presidential goal of an economy-wide scheme intended to cut total greenhouse emissions by 80 per cent by the middle of the century. “We want a global arrangement, not a patchwork, and we still hope that one will emerge under the principles already established by ICAO and IATA,” said Teffaha. “Accordingly, we are talking to SITA about what we might need to do to fit in with an eventual global scheme.”

SITA is confident that its solution is flexible enough to go global if necessary. “We’re all in favour of a global scheme,” chief executive Francesco Violante said earlier this year. “Our present solution is suitable for deployment in any region and we are sure that it could also be readily adapted to a global arrangement.”

Emissions trading for air transport is still a highly contentious topic. No less a figure than Qatar Airways chief executive Akbar Al Baker described it as a “hot potato” at this year’s IATA annual general meeting and declared that the European scheme should have been challenged more vigorously when it was first proposed. But it’s now a fact of life, and the Arab airlines are as well placed as any operator in the world to manage its effects on their business.