Etihad Airways will increase the fuel surcharge on its European flights to offset the costs being imposed on the airline by the European Union (EU) Emissions Trading Scheme (ETS).

The increase of $3 per passenger for flights into and out of Europe and $0.03 cents/kg for cargo shipments will take effect for travel from March 1, 2012.

The EU ETS imposes a limit on carbon dioxide emissions for flights operating to and from EU airports, effective from January 1, 2012. Its aim is to mitigate the impact of climate change on aviation.  Each airline is allowed to emit some carbon dioxide for free each year, but they will have to buy "carbon credits" from other airlines or industries if they exceed their allowance, said an Etihad statement.

The charges are calculated based on the additional cost to Etihad for the carbon credits the airline will be required to purchase for 2012 in order to comply with the EU ETS. As carbon prices fluctuate, this cost may need to be adjusted from time to time, it said.

James Hogan, Etihad Airways president and chief executive officer, said: “As an airline we are strongly opposed to the unilateral measures imposed by the European Union on our flights into and out of Europe, especially as they include areas outside European airspace.

“We have invested many millions of dollars to ensure we operate a young and highly efficient fleet but are still being penalised. Our efficiency is reflected in the relatively low additional charge and we will continue to be transparent in keeping our customers fully informed of this carbon charge,” he said.

Etihad Airways supports the position of the UAE government in the development of measures that will result in a tangible and quantifiable reduction of emissions including the overriding position of the UAE to pursue a global scheme led by the International Civil Aviation Organization (IACO) to address the issue of climate change, he said. - TradeArabia News Service