Airlines' cost of compliance could "more than double" if the European Union's emissions trading scheme (ETS) is made law, aviation analysts at IBA have warned.
The proposed phasing-out of the allocation of emission allowances from 2024 would be key to the cost rise, IBA said, as the level of freely-allocated allowances has not dropped below 69% since 2012, showing the work needed to be done if airlines are to reach zero.
The cost of compliance would likely rise further as the EU view in the proposed ETS is that the UN's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) scheme does not go far enough.
Carriers such as Ryanair have warned the proposed ETS would favour long-haul carriers as their flights to destinations beyond Europe would not be affected, as such traffic would come under the CORSIA system.
"The impact of the EU’s amendments to the ETS won’t be felt uniformly across the industry", IBA said.
