German airline Lufthansa will pass the extra cost that the European Union’s emissions trading system will add to its operation onto customers’ ticket prices, it has announced.
Lufthansa anticipates total additional charges of €130 million ($170 million) in 2012 as a result of the tariffs and says the ETS distorts international competition and undermines the sustainability of air transport.
Under the ETS, EU airlines will have specific CO2 allocations and will pay a penalty of €100 for every additional ton of CO2 emitted. As reported earlier, the limits will apply not only to European businesses but to others, such as AMR’s American Airlines, that operate flights in Europe.
In 2012, the ETS will give airlines operating in Europe 82 percent of the CO2 emissions right certificates they require free of charge. An additional 15 percent will have to be purchased by the airlines. But Lufthansa has calculated that it will need to purchase at least 35 percent of the certificates it needs, to reflect its growth in recent years.
In December, United/Continental Airlines and American Airlines failed in an attempt to block the introduction of the law that includes the aviation industry in the ETS. The aviation industry’s inclusion in the ETS took effect, as planned, on 1 January 2012.