Airline Carbon Costs Take Off as EU Emissions Regulations Reach for the Skies

Document summary

Airline emissions have been growing faster than any other industry rising 98% between 1990 and 2006, and show no signs of abating. Airlines are bracing themselves for 2012 and a new phase of the EU ETS. Besides curbing projected growth in emissions the scheme is also likely to increase costs. S&P estimates that in 2012-13 alone, the industry is likely to incur an additional cost of around €1.25 billion based on the current carbon price of about €15 per tonne of CO2. These costs if not passed through to passengers, or mitigated elsewhere, could impact carriers’ credit over time.