The Global Air Cargo Advisory Group (GACAG) today urged the EU to draw back from implementing the EU Emissions Trading Scheme (ETS) for aviation. Implementation, which is scheduled to take effect this month, will spark a divisive and ultimately costly dispute with the international community and the global aviation industry, including the air cargo sector and its customers, says GACAG.
 

GACAG is responding to the recent European Court of Justice Decision (21 December 2011) regarding Airlines for America’s legal challenge to the unilateral application of the EU ETS to international aviation. The Decision effectively paves the way for the EU ETS to be implemented for the aviation sector in 2012.
 
The EU’s intention to apply its Emissions Trading Scheme has drawn a strong rebuke from many countries, including the United States, India and China, who have challenged the EU ETS on legal and policy grounds. They have urged the EU and its Member States to suspend application of the EU ETS and to return to multilateral efforts to develop international C02 emission standards within ICAO and other appropriate international fora.
 
Chris Welsh, Secretary General of the Global Shippers’ Forum (GSF) -one of the GACAG’s four founding members - and Chairman of the GACAG Sustainability of the Air Cargo Industry Task Force said, “The Global Air Cargo Advisory Group wholeheartedly agrees with this position. We believe the EU should fully support the agreed ICAO framework for developing appropriate market based measures (MBMs), including the possibility of emissions trading schemes, voluntary and other efficiency based measures.   The absence of an international framework will be chaotic and will unnecessarily cost the air cargo industry and its customers tens of millions of dollars at a time when the global economy is so fragile, and when every effort is being made to stimulate global demand.
 
“International aviation is not a luxury; it is part of a complex international supply chain upon which global trade is dependent. Every day essential products such as pharmaceuticals, healthcare equipment and fresh produce are shipped by air. Consumers can expect to pay more for these items plus many others at a time when they are already struggling with economic uncertainty and rising costs. Every effort is now needed to stimulate demand and employment in a flagging global economy.   World-wide demand for air cargo services, considered by economists to be a barometer of the state of the global economy, shows the recovery is weak.  This is an indication that consumers simply will not be able to pay higher prices. This will have a direct impact on manufacturers, growers and the entire freight forwarding and logistics industry.  The E.U. needs to fully evaluate the wider economic consequences of its actions before pressing ahead with the EU ETS.”
 
His comments came as GACAG reinforced the views of its other members – the International Federation of Freight Forwarders Associations (FIATA), the International Air Transport Association (IATA) and The International Air Cargo Association (TIACA) - that the correct way forward would be for the International Civil Aviation Organization (ICAO) to develop a global agreement on aviation carbon emissions. This would be in keeping with the recommendations of The Kyoto Protocol which designated ICAO as the body with authority to set international aviation’s greenhouse gas policy. 
 
Despite mounting international pressure from governments and businesses, including from within the E.U., the European Union still seems intent on moving forward with the ETS.
 
“The ETS will curtail investment by the air cargo industry that could otherwise be invested in new technologies and efficiency measures to reduce carbon emissions. We hope that the EU will listen to growing concerns by industry and consumers and work with industry representatives in developing alternative options for reducing carbon emissions in the most cost-effective way without undermining the fragile state of the European and wider global economy,“ Welsh added.
 

GACAG members have highlighted key concerns about the ETS to the Climate Action Commissioner at the EU, stating it was in violation of international law and treaties. They have also said that imposing massive new taxes on aviation is unlikely to improve the environment.

About GACAG
The Global Air Cargo Advisory Group (GACAG) is an industry advisory group formed November 2010 to ensure the air cargo industry has a strong, unified voice in its dealings with worldwide regulatory authorities and other bodies whose decisions directly impact on air cargo.  The four founding members of GACAG are the International Federation of Freight Forwarders Associations (FIATA), the International Air Transport Association (IATA), the Global Shippers’ Forum (GSF), and The International Air Cargo Association (TIACA).   The group has targeted four priority areas: security, e-commerce, customs and trade facilitation, and the sustainability of the global air cargo industry

About TIACA
TIACA is a not for profit trade association for the air cargo industry, pledged to support and assist progressive liberalization of the global market, and easier, enhanced trade between developing and developed economies.  It is a worldwide organization that serves a membership which includes all major segments of the air cargo and logistics industry; airlines, forwarders, airports, ground handlers, all-cargo carriers, general sales agents, road carriers, customs brokers, third party logistics companies, integrators, technology and equipment providers, shippers, and educational institutions.
To accomplish its mission and role, TIACA engages in activities that are geared to improve industry cooperation, promote innovation, share knowledge, enhance quality and efficiency, and develop educational programs. TIACA’s activities are aimed to inform both the public and its membership about the role and importance of air cargo, industry developments and technical trends. TIACA is committed to representing and advocating the interests of the air cargo industry at meetings of relevant regulatory bodies including the WCO, ICAO, UNCTAD, OECD and others that are open to trade observers.

About IATA
Air transport is one of the most dynamic industries in the world. The International Air Transport Association (IATA) is its global trade organization. Over 60 years, IATA has developed the commercial standards that built a global industry. Today, IATA’s mission is to represent, lead and serve the airline industry. Its members comprise some 230 airlines - the world’s leading passenger and cargo airlines among them - representing 93 percent of scheduled international air traffic.
IATA seeks to improve understanding of the industry among decision makers and increase awareness of the benefits that aviation brings to national and global economies. It fights for the interests of airlines across the globe, challenging unreasonable rules and charges, holding regulators and governments to account, and striving for sensible regulation.

About FIATA
FIATA, the International Federation of Freight Forwarders Associations, was founded in Vienna, Austria on May 31, 1926. It is a non-governmental organization that today represents an industry covering approximately 40,000 forwarding and logistics firms, employing around 8-10 million people in 150 countries.
FIATA has consultative status with the Economic and Social Council (ECOSOC) of the United Nations (inter alia ECE, ESCAP, ESCWA), the United Nations Conference on Trade and Development (UNCTAD), and the UN Commission on International Trade Law (UNCITRAL). It is recognized as representing the freight forwarding industry by many other governmental organizations, governmental authorities, private international organizations in the field of transport such as the European Commission (through CLECAT), the International Chamber of Commerce (ICC), the International Air Transport Association (IATA), the International Union of Railways (UIC), the International Road Transport Union (IRU), the World Customs Organization (WCO), the World Trade Organization (WTO), etc.

About GSF
The Global Shippers’ Forum is the world wide body that represents shippers and transport users internationally. The GSF comprises the major national and regional shippers’ organisations in Europe, North America, Asia and Africa representing over 50 countries across the world’s major trading regions.
 
The GSF was established to promote competitive global transport markets and supply chains to further the development of international trade and commerce. In this regard, a prime policy objective of the GSF is to promote efficient and competitive global supply chains.


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