Europe’s three biggest airlines now buying carbon allowances
Major airlines' involvement in EU emissions trading is ramping up, with Germany's Lufthansa - already a member of German energy exchange EEX - now planning to join ICE, while Air France last week began spot trading on Bluenext.
And the third of Europe's three big airlines, British Airways, is "already active in carbon markets", a spokesman told ICIS Heren, but he was unable to give details on how the airline manages this involvement.
Air France started trading on Bluenext on 12 January as a spot member, which means it cannot trade carbon futures, a spokesman for the French exchange confirmed.
Air France-KLM will need to buy allowances covering around 6m tonnes of CO2 equivalent to cover its emissions this year, a spokeswoman for the airline said.
The airline has entered the market at this early stage to "mitigate the risk of price fluctuation", the spokeswoman said. It will also bid at auctions of allowances for airlines when these are arranged, she said. When asked why the airline decided to join the exchange as a member rather than trading through a broker, she said that "direct knowledge and market access may be valuable".
Bluenext is in discussions with a few other airlines about potential membership, the exchange spokesman said. Air France is the first airline to join Bluenext.
Europe's biggest airline by revenue, Lufthansa joined EEX last April as a participant on the spot and derivatives markets (see EDCM 19 April 2011).
Germany's flag carrier now plans to join Europe's biggest carbon exchange, ICE, a spokesman for the airline told ICIS Heren.
Lufthansa will have to buy at least 35% of its carbon allowances this year, incurring costs of €130m, it has said.
The year 2012 is the first year of participation for airlines in the EU Emissions Trading System (ETS). Under ETS rules, airlines will receive 85% of the allowances they need to cover their emissions this year free of charge.
But because this proportion was calculated based on emissions in 2004-2006, airlines that have grown since then - like Lufthansa - will have to buy more than 15% of their allowance needs. Airlines covered by the ETS will receive their free allowances next month.
The aviation sector's inclusion in the ETS is unlikely to offer much support to prices in the oversupplied carbon market this year, market participants and observers have said (see EDCM 4 January 2011). VF
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