OPIS now publishes a jet fuel benchmark for airlines who want to manage their fuel and carbon together.
‘Clean’ benchmarks originated in the power market and combine the price of energy and carbon compliance. Airlines that fly into or within Europe are to join Europe’s emissions market on January 1. So OPIS now publishes carbon and clean prices as well as one-stop carbon, jet and oil market analysis every trading day.
In its coverage of what are assumed to be the first airline carbon surcharges, the international press has been quoting “industry watchers” and “analysts” who apparently believe that ticket prices may rise by up to $90 per seat on a typical long-haul flight under Europe’s new carbon scheme.
How credible are these claims? And if they are true, why is Delta Airlines apparently only hedging itself against a maximum of $3 per ticket of costs? Delta has not officially linked a $3 fee announced on Jan. 2 to Europe’s carbon scheme which started the day before.
At $3, Delta’s surcharge does not look unreasonable, given that the price at the exchange of carbon allowances isn’t the end of the story when an airline covers its exposure under the Emissions Trading System (ETS).
Airlines have had a host of costs associated with monitoring and measuring in the run-up to the scheme. On March 31, airlines will have to report their emissions for 2011, for example. Software has been purchased. In some cases, entire desks of compliance and carbon trading expertise have been hired.
Even an airline attempting to deal as deftly as it can with the regulations, faces fees for over-the-counter purchases of carbon allowances from banks, for example, or for carbon exchange fees. The ETS implies a higher holding of euros for many airlines, and that implies an added element of foreign exchange hedging, with its own associated broking and OTC fees. Added to that, carbon prices have dropped recently and the allowances may have been bought at the higher earlier price.
According to a spokesman for the Aviation Environment Federation, it has “nothing against airlines imposing a surcharge that includes a reflection of their administration costs for participating in the carbon trading system.”
Airlines for America has put the cost of complying with the ETS between 2012 and 2020 at $3.1 billion. This is a difficult number to unravel. But when Delta’s surcharge was reported by Reuters journalists yesterday — a story that instantly went global — it was accompanied by this, now massively disseminated, forecast.
“Some industry watchers predict airfares between the United States and Europe could rise $50 to $90 as airlines attempt to pass along the expense.”
In OPIS’s own analysis, Delta’s team is much closer to the money than the un- named observers above.
On Wednesday, Jan. 4, the December 2012 EU Allowance carbon futures contract settled at €6.57/mt ($8.49) and the December 2012 Certified Emissions Reduction future ended at €3.83/mt ($4.95/mt).
Using the above numbers, an aircraft carrying 300 passengers and using 50 metric tons of jet fuel on a long-haul flight would need to pay $1,337 to meet the cost of carbon locked in as December 2012 EU allowances. If the airline were to receive no free allowances, then the implied cost on the flight would be $4.46 per passenger.
However, most airlines will receive the majority of their allowances for free. With a 65% free allocation, the cost of carbon for the flight falls to $1.56 per passenger.
As for that $90/ticket estimate, until 2020 airlines will continue to receive a large part of the allowances needed to meet their 2005 historic emissions for free. If the free proportion of a growing airline’s emissions fell from, say, 65% today, to just 30% in 2020, then for that price-hike to be accurate, carbon prices would need to soar.
A $90/ticket carbon surcharge in 2020 would imply a carbon price of $245/mt, and that assumes airlines achieve no improvements in fuel economy and that biofuels flop.
So what do Reuters’ own carbon analysts say about the price of carbon in 2020? Its respected Point Carbon team says that in 2018-2020 it expects carbon prices, which have lost half their value in the last year, to reach a relatively meager 16 euros ($20)/mt.
Rather than a $90/mt surcharge, that suggests that one of perhaps $3.80/ ticket, excluding administration charges, rounded up to $5, might be more appropriate in 2020.
The price for clean jet fuel, as assessed by OPIS on Wednesday, stood at $1,039.51/mt for Rotterdam jet fuel in barges on Wednesday.
For now, it will cost an additional $6 per roundtrip ticket on Delta Airlines for travelers going between the US and Europe.
The carrier rolled out the surcharge on January 2 and it applies to tickets purchased in the US, a spokesman told OPIS via e-mail.
The surcharge was rolled out just as US carriers, as well as the entire commercial aviation industry, had to start complying with carbon reduction regulations in Europe. Those regulations took effect on January 1. The airline declined to comment specifically on the reason for the fee.
Airlines for America, an industry trade group, sued the European Union, asking to be exempt from the carbon reduction plan, saying the scheme was in violation of international law. The European Court of Justice ruled in late December that all airlines serving Europe are required to participate in carbon reduction efforts. Airlines for America, in a statement said it was reviewing its options following the court’s ruling. That indicates it could be considering another appeal or lawsuit.
In 2011, the US House of Representatives passed a bill that would make it illegal for US airlines to comply with the EU regulations. But, the Senate never passed a companion measure.
Under the EU carbon reduction plan, airlines must account for carbon emissions for flights taking off and landing in Europe. The measurement of carbon emissions begins at the point where the aircraft pushes away from the gate, regardless of whether that is in Europe or not. And the measurement ends when the plane arrives at its new gate, regardless of whether that is in Europe or not.
On Wednesday, December 2012 EUA carbon credits settled at $6.57 and December 2012 CER credits ended at $3.83.
The price for clean jet fuel, as assessed by OPIS, stood at $1,039.51/mt for Rotterdam barge fuel. Meanwhile, U.S. jet fuel was running over $3.05/gal.
US airlines have likely lost their court case against being included in Europe’s cap-and-trade carbon market next year. An advisor to Europe’s highest court has declared that European Union rules forcing foreign airlines to pay for their carbon emissions is within the law.
“EU legislation does not infringe the sovereignty of other states or the freedom of the high seas guaranteed under international law, and is compatible with the relevant international agreements,” said the opinion from Advocate General Juliane Kokott.
Although the opinion is not binding, judges at the European Court of Justice usually follow the guidance of the advocate general.
The move will see airlines based outside of the EU forced to buy carbon permits or credits next year for flying in and out of the region’s 27 nation member states.
Several American airlines and the Air Transport Association of America filed a suit in the UK against their inclusion into the carbon market after the country had adopted the EU directive for regulating aviation emissions
The main objection was that the EU was effectively imposing a tax over other sovereign state’s air space and the high seas, as well as breaching conventions in the Chicago Convention, the Kyoto Protocol and the Open Skies Agreement.
The London High Court of Justice referred the case to the European Court of Justice, which now will likely throw out the case early next year. In turn, the UK court will likely follow the decision.
Some 5,000 aircraft operators are expected to fall within the scope of the EU’s aviation carbon market next year, although the vast majority of them are very small and will pay only a few hundred euros for their carbon emissions.
However, international carriers face a bill of around 1.1 billion euros next year, according to analysts at Thomson Reuters Point Carbon and RDC Aviation.
Under the rules of the scheme, the aviation market has been set a cap of 212.9 million tonnes of carbon dioxide next year, which equalled 97% of the industry’s annual emissions between 2004 and 2006. In turn, each airline has now been given its own carbon limit.
Airlines will collectively receive around 180 million EU allowances (EUAs) for free next year, with each permit representing a tonne of carbon dioxide emissions, but an individual airline will then have to buy extra carbon permits or credits if they exceed their own individual limit.
Analysts expect the industry’s emissions within the EU’s scope will breach 250 million tonnes of carbon next year.
OPIS’s Europe Jet Fuel and Gasoil Report assessed Clean jet fuel for cargo delivery in Northwest Europe during the first quarter of 2012 at $984.75/mt. OPIS’s ‘clean’ assessment reflects the cost of buying jet fuel with carbon emissions costs included. On Wednesday, OPIS assessed December 2012 European Union Allowances, the primary exchange traded permit in the scheme, at Euros 10.69, or $14.23.
Although airlines face a bureaucratic burden in measuring and purchasing permits, the economic impact of the scheme from January is already being mitigated by a downturn in the wider economy. Carbon trading systems take account of economic downturns, and permit allotments in the first phase of the scheme were sold by heavy industries in Europe. This leads to a falling permit price, and allowance prices are currently at a two and a half-year low.
The UK Environment Agency and Scottish Environment Protection Agency (SEPA) have calculated the number of free carbon allowances that airlines regulated by the UK will receive in 2012 when they join the EU emission trading scheme.
Each member state within the EU is responsible for regulating the carbon emissions of the 5,000 airlines that are expected to face regulation in Europe’s cap-and-trade carbon market next year.
British Airways (as a separate entity to parent company IAG) tops the UK list, receiving around 10.3 million EU allowances for free next year, which are worth over 103 million Euros ($136 million) at today’s value. Emirates is in second place, with 4.3 million EU allowances, Easyjet is in third place with 3.7 million carbon permits, and Virgin Atlantic in fourth place with just under 3.6 million.
There are three US airlines in the top ten UK list: American Airlines will receive 2.75 million EUAs; United Airlines will receive 2.4 million; and Continental Airlines will receive around 2.15 million. There are also two Asian Pacific airlines: Cathay Pacific and Singapore Airlines that will receive 2.38 million and 2.24 million EUAs respectively.
The last airline in the top ten UK list is Thomson Airways, a British holiday company, which is expected to receive 2.3 million allowances. Only 900 airlines applied for free carbon allowances, although these operators will still account for the vast majority of the industry’s emissions.
Under the rules of the scheme, airlines will be given free allowances totalling 85% of the industry’s average annual carbon emissions in 2004 and 2006. With the industry growing sharply over the seven years, this will leave airlines short of the required number of permits needed when they join the emissions trading scheme next year.
Airlines that receive free allowances from the European Union will be able to use them to mitigate the cost of complying with the European Emissions Trading System from 1 January, 2012. OPIS’s Clean Assessment for cargo-delivered jet fuel in Northwest Europe with carbon compliance costs included reached $990.50/mt on Tuesday. The forward price for 2012, which assesses the price airlines can lock in using futures and swaps, is lower at $967.80/mt. This largely reflects a bearish view of forward oil markets. Carbon allowance futures (EUAs) for December 2012 delivery settled at €10.54 yesterday, some 44 Eurocents higher than the December 2011 price.
More than 900 airlines will be given about 20 billion euros (US$26.9 billion) worth of free carbon allowances at current prices over the next eight years, according to data released by the European Commission today. Some 4,000 air carriers failed to apply for the free allocation and will have to buy carbon allowances and credits to meet all their carbon emissions.
But this will still leave the aviation sector facing a hefty bill for emitting carbon dioxide for flights in or out of the EU. Each annual carbon credit gift will not cover all the carbon expected to be released by the sector for each year, leaving the aviation industry with a shortfall when it joins the European Union’s carbon trading scheme in 2012.
The top 10 largest emitters of carbon dioxide are expected to face a shortfall of 30 million metric tons next year, which will cost them 360 million euros at a carbon price of 12 euros a metric ton, according to research by Thompson Reuters Point Carbon and RDC Aviation.
These are Air France, Alitalia, American Airlines, British Airways, Delta Airlines, Iberia, Lufthansa, Ryanair, United Airlines and Virgin Atlantic Airways
The estimated costs were calculated after the European Commission today published the benchmark values which will be used to allocate greenhouse gas emission allowances free of charge, based on how much weight an airline carried every kilometre.
In 2012, an airline operator will receive 0.6797 EU allowances per 1,000 tonne-kilometres, and in 2013 to 2020, an airline operator will receive 0.6422 EU allowances per 1,000 tonne-kilometres.
“With the benchmark values, airlines now have certainty over how many allowances they will receive for free each year up to 2020,” said Climate Action Commissioner Connie Hedegaard.
“At current market prices these free allowances represent more than 20 billion euros over the decade. With these potential revenues, airlines could invest in modernising their fleets, improving fuel efficiency and using non- fossil aviation fuel. As much as the EU prefers global action, we can’t defend that the aviation sector is exempted from contributing because they can’t agree internationally.”
However, some 4,000 air carriers failed to apply for the free allocation and will have to buy carbon allowances and credits to meet all their carbon emissions, although these companies are so small, their carbon emissions are expected to make up less than 10% of the volume.
“The number of airlines to have reported, at over 900 out of around 5,000, is actually quite good; they include the highest emitters and represent a high proportion of the emissions in the scheme,” said Andreas Arvanitakis, who heads aviation practice in the Advisory Department at Thomson Reuters Point Carbon.
“However, it does suggest that around 4,000 airlines will not be given any allowances for free. Albeit small in scale, they will have to buy all of the allowances they need.”
The aviation sector’s carbon cap, a limit on the amount of emissions permitted every year, is based on how many metric tons of carbon the industry emitted on average between 2004 and 2006.
In 2012, the cap is set at 212.9 million metric tons, which represents 97% of the 2004 and 2006 average volume. This cap falls to 208.5 million metric tons a year from 2013 to 2020, which represents 95%.
These figures also represent how many carbon allowances, called EUAs, will be created annually by the EU Commission. But airlines will only receive 85% of this total for free in 2012, and then 82% every year from 2013 to 2020. With the industry having grown sharply since 2004 and 2006, the sector’s shortfall will be much larger than 15%.
All aircraft that touch down in EU territory will be regulated under the emission trading scheme starting in 2012. The carbon footprint will be calculated from where the flight took off.
The price of Certified Emissions Reduction credits (CERs), which can be used by airlines to offset their carbon emissions, will average between 13 and 18 euros between 2013 and 2020, according to analysts at Thomson Reuters Point Carbon.
Airlines that fly in or into the European Union will need to cover the emissions associated with a proportion of their fuel burn from January, 2012.
Airlines, which are set to join Europe’s carbon market in 2012, can use CERs to meet their compliance requirements if their emissions exceed the cap level.
Next year, airlines can also use CERs to cover 15% of their compliance requirements, which would mean 37.5 million credits if the industry’s emissions reach 250 million tonnes.
The European Commission has yet to decide how many of these UN offsets the sector can use from 2013, but the total figure is likely to be very small. Deutsche Bank estimates the sector will be able to use between 25 million and 43 million CERs over the entire 2013-2020 period.
This is because the 15% limit in 2012 falls into the second phase of the Emission Trading Scheme (ETS), which runs from 2008 and 2012, and so the volume is concentrated into one year. But the CER percentage limit is spread over seven years for the next phase of the ETS.
CERs are generated by green investment schemes in developing countries outside of the EU, and cost less than the main tradable carbon unit of the ETS market, called EU allowances, although both are worth a tonne of carbon.
Thomson Reuters Point Carbon estimates EUAs will cost an average of 22 euros between 2013 and 2020.
However airlines need to be aware that not all CERs can be used within the ETS scheme. Since January, credits from projects registered after 2012 and creidts from HFC-23 and adipic acid projects are not eligible for compliance between 2013 and 2020.
These ineligible CERs are known in the carbon market as ‘grey’, while CERs that are eligible in phase 3 are denoted ‘green’.
Airlines, which touch down in EU territory, have been set a cap limit of 212.9 million tonnes of carbon in 2012, which drops to 208 million tonnes from 2013 to 2020.
The volume represents 97% of the carbon emissions that airlines emitted a year on average between 2004 and 2006 – a figure of around 219.5 million tonnes of carbon dioxide a year.
But airlines will only receive 82% of the created permits, known as EU allowances (EUAs) for free. Another 3% will be held back for new entrants to the market, while the remaining 15% will be auctioned by the member states of the EU.
IPIS has started a clean jet assessment, which combines the price of buying the required number of EUAs when buying a tonne of jet fuel.
KLM Royal Dutch Airlines has become the world’s first airline to operate a commercial, scheduled flight using a 50/50 blend of renewable jet fuel and conventional jet fuel, the company announced this morning. The renewable diesel was provided by Dynamic Fuels, a renewable diesel joint venture between Syntroleum and Tyson Foods.
KLM used a 747 in its earlier transatlantic test flight. Photo: KLM
The flight on a Boeing 737-800, from Amsterdam to Paris earlier today, was carrying 171 passengers. “Today, KLM wrote history,” said managing director of KLM, Camiel Eurlings, shortly before departing for Paris. “KLM is ready and today we were pleased to show just that,” Eurlings added. The Inspectorate for Transport, Public Works and Water Management granted KLM permission to operate the flight, KLM noted. The fuel used in the flight was supplied by SkyNRG, a consortium launched by KLM and North Sea Group and Spring Associates in 2009. Dynamic Fuels operates a 75-million gal/yr renewable diesel plant in Geismar, La., which uses animal fats and greases as its feedstocks. The news follows KLM’s announcement last week that it plans to launch more than 200 flights — also between Amsterdam and Paris — fueled with the same 50/50 renewable jet fuel blend starting in September. Earlier this month, ASTM gave preliminary approval to biojet fuel blends up to 50% for use in passenger flights.
Jet and carbon prices dipped lower today, but European airlines will have little to cheer about after the International Air Transport Association downgraded its airline profit forecast for the region this year to just $500 million.
Cargo prices in north Europe slipped $2 to $1,039 a tonne, down almost $100 since the year high on April 28, but still $28 higher than the average of the year so far ($1,011 a tonne), and a sizeable $315 higher than the average price in 2010 ($724 a tonne).
Meanwhile, the cargo clean jet price today was close to $1,116 a tonne, some $77 higher than the cargo price.
With global airline profit margins squeezed to just 0.7% of revenue, according to IATA, and the fuel bill accounting for 30% of a typical airlines bill, it is not surprising that the industry is intensifying its lobbying against Europe’s cap-and-trade carbon market rather than accepting the regulation as a done deal.
China has reportedly threatened a trade war with the European Union if the region pushes ahead with plans to include foreign airlines in its Emission Trading Scheme from January next year.
Willie Walsh, chief executive of International Airlines Group, said China and other non-European carriers could impose punitive taxes on European carriers or block access routes, and there are also fears of retaliation against the Chinese manufacturing of Airbus, the European airspace company.
The news follows an unsuccessful Chinese delegation visit to the European Commission last month where China argued that its own plan to cut airline emissions should allow them to be exempted from the regulation.
Next month, US airlines will take their fight against ETS to the European court of justice where they will argue that the system breaches international law.
The Air Transport Association of America (ATA) believes that imposing a European scheme on non-EU airlines contravenes various agreements including the Chicago Convention, which regulates the global airline industry.
ATA argues that it breaches article 1 of the convention, which states that countries have sovereignty over airlines in their airspace, and so the EU has no right to tax a carrier flying out of, say, Dubai or New York.
Meanwhile, the European Commission remains confident that it can prevail against this legal challenge, which was first mooted in 2008 when the legislation to include airlines in the emission trading scheme was passed.
It was always the intention of the EU to impose a tight carbon cap of the fast-growing airline [INDUSTRY?], and it argued that the sector will be able to pass off the carbon costs to the consumer, especially as the regulation affects all carriers that fly in and out of the region rather than just a select few.
But airlines are skeptical. The industry is fiercely competitive, faces tight margins, and incurs high capital expenditure costs. Moreover, consumers can be highly price sensitive.
IATA has slashed its forecast for airline profits to just $4 billion globally this year, down from $8.2 billion in 2010, mainly because Brent is now forecast at $110/bbl, up from a previous forecast of $96/bbl.
With estimates that 50% of the industry’s fuel requirements is hedged at 2010 price levels, IATA sees the 2011 fuel bill rising $10 billion to $176 billion.
Its global profits forecast is only going to be maintained if the world maintains strong economic growth, which continues to propel equally strong growth in business and premium seat numbers.
But the trade body notes there has been a 3%-4% drop in passengers flying economy class since last November. At today’s carbon price, airlines would have to fork out an extra $75 a tonne to cover their carbon emissions after burning a tonne of jet, unless they already had the required number of carbon allowances and credits.
Airlines will receive around 175 million carbon allowances for free in 2012, but this is likely to be around 90 million less than they emit that year, according to analysts.
But this carbon price is likely to rise sharply, especially as several big hitters in the European Union, such as Germany and the UK, want to tighten the general carbon cap within the region for all the 12,000 companies and factories currently regulated.
Meanwhile, Goldman Sachs has forecast that Brent will average $125/bbl in 2012. It is already proving difficult for airlines to pass off the high cost of oil to consumers this year, without having to pass off the cost of carbon as well.
Brent and gasoil futures were a tad lower by 4.30pm London time today compared to Monday, which softened jet prices.
But there was more of a fall in cargo prices after aggressive offering by BP, which pushed the premiums down to June plus $89.
BP sold a cargo to Vitol into Royal Portbury Docks at June plus $91 and a discount of $2 below the Cif cargo mean quote.
But the extra cost of selling into the restricted port was reflected by BP also offering June plus $89 and a discount of $2 below the Cif cargo quote into Le Havre.
Investment in projects that generate carbon credits fell sharply in 2010 amid the political uncertainty regarding the future of the global carbon market, according to a report today by the World Bank.
The “Clean Development Mechanism” (CDM) market is now at its lowest level since 2005 when it was created by the enactment of the Kyoto Protocol.
There was an estimated $1.5 billion invested in new projects in 2010, down 46% on the previous year. These projects in developing countries generate Certified Emissions Reduction (CER) credits, which are awarded by the United Nations and can be used by companies and governments to offset carbon emissions.
This helped the global market shrink to $142 billion in 2010, some $2 billion less than in 2009, estimates the World Bank.
Europe’s emission trading scheme accounts for the bulk of the global carbon market, with trade in EU allowances, the tradable carbon unit within the cap-and-trade market, worth around $121 billion.
Airlines, which are due to join the ETS in 2012, will be allowed to use around 32 million CERs to offset their carbon emissions in 2012, but the limit will be sharply reduced between 2013 and 2020.
Analysts expect airlines will be able to use between 20 million and 40 million CERs throughout the whole 2013-2020 period in meeting their carbon cap.
Investment in CDM projects is unlikely to increase because there is little demand for credits outside of the European Union, the World Bank notes.
“The only substantial and unconditional demand to date comes from Europe, estimated at 1.7 billion tons,” according to a statement form the World Bank, before adding: “The supply available between 2013 and 2020, through existing projects, is seen as sufficient to fill that demand, leaving little incentive for project developers to invest further and create a future supply of emission reductions.”
All airlines that fly in and out of EU airspace will be subject to regulation by the region’s cap-and-trade market from 1 January, 2012.
Unlike most other sectors, airlines will be short of carbon allowances from the outset, and will be required to buy either EU allowances or CERs to fill the shortfall.
Airlines will receive around 175 million EUAs for free in 2012, but the sector is estimated will emit around 265 million tonnes of carbon with EU territory.
OPIS has launched a clean jet carbon price, which calculates the price of buying jet fuel and the required volume of EU allowances to offset carbon emissions.
Germany’s decision to phase out all its nuclear power plants by 2022 could add another 5 euros to the price of EU carbon allowances by 2020, according to analysts at Thomson Reuters Point Carbon.
Out of the country’s 17 nuclear plants, eight will never return to the grid, while the rest will be decommissioned over the next 10 years.
The move will likely increase Germany’s carbon emissions by around 420 million metric tons from now until the end of phase three of the EU emission trading scheme, which runs from 2013 to 2020. Nearly a quarter of German’s electricity comes from nuclear power.
Airlines are due to join the cap-and-trade market in 2012, and face a shortage of carbon allowances and credits from the outset. The sector will receive around 175 million EU allowances for free in 2012, but are estimated to emit around 265 million metric tons of carbon. In 2013, the amount of free EU allowances airlines will receive drops to 170 million.
OPIS’s unique forward clean jet price for 2012, the price of buying jet fuel and the required carbon allowance to offset the emissions next year, rose to $1,145 a metric ton today, up nearly $22 on Friday.
But Germany’s decision on nuclear power in the wake of the Japanese tsunami, which caused a meltdown at the Fukushima plant, will have little impact on the carbon market in the short term. The deep recession in 2008 has left the cap-and-trade market swimming in an excess of EU allowances and credits, which is suppressing prices
December 2011 expiring EU allowances, the main tradable unit within the scheme, are currently trading just above 17 euros after peaking above 30 euros in July 2008
And, unless Europe decides to adopt a tighter carbon goal, switching from a target of a 20% reduction by 2020 from 1990 levels to a 30% target, the ETS will likely remain long in allowances and credits throughout phase three, ending in 2020.
“What is happening in Germany has been anticipated by the market for a few months,” said Stig Schjolset, Senior Analyst Thomson Reuters Point Carbon.
“But with the 20% target, the ETS still remains long because of the credits that can be imported into the scheme.”
Under the rules of the scheme, carbon credits generated by green projects in developing countries outside of Europe, such as China, can be used to offset carbon emissions in Europe.
Thomson Reuters Point Carbon forecasts assume the EU will shift to a 25% reduction target, which will lift the price of EUAs to around 36 euros by 2020.
Germany, the UK and France are currently pushing for the adoption of a 30% target from 2013, but are being resisted by Italy and Poland, as well as other eastern European countries. Energy-related carbon emissions in 2010 were the highest in history, according to the latest estimates by the International Energy Agency.
After the dip in 2009 during the global recession, emissions are estimated to have climbed to a record 30.6 gigatonnes, a 5% jump from the previous record year in 2008, when levels reached 29.3 Gt.
“This significant increase in CO2 emissions and the locking in of future emissions due to infrastructure investments represent a serious setback to our hopes of limiting the global rise in temperature to no more than 2ºC,” said Dr Fatih Birol, chief economist at the IEA.
In terms of fuels, 44% of the estimated carbon emissions in 2010 came from coal, 36% from oil and 20% from natural gas.
Airlines have had a host of costs associated with monitoring and measuring in the run-up to the scheme. On March 31, airlines will have to report their emissions for 2011, for example. Software has been purchased. In some cases, entire desks of compliance and carbon trading expertise have been hired.
