Data on historical aviation emissions from www.airoportwatch.org.

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Inclusion of aviation in the EU ETS: Commission publishes historical emissions data on which allocations will be based

7.3.2011 The European Commission has, today, taken an important step in preparing for the full inclusion of aviation in the EU's emissions trading system (EU ETS) from 1 January next year. The European Commission has decided on the historical aviation emissions which will be used to calculate the number of aviation allowances to be available from 2012. [It has been known for a long time that 2004 - 2006 would be used as the baseline, but just the exact figure was awaited, with the inclusion of more permits to take account of fuel burned by aircraft while on the ground. This was something the industry had asked for]. Connie Hedegaard, European Commissioner for Climate Action, said: ''Emissions from aviation are growing faster than from any other sector, and all forecasts indicate they will continue to do so under business as usual conditions. Firm action is needed. By publishing the data on which allocations will be based, we prepare for the full inclusion of aviation in the emissions trading system.'' The decision on historical aviation emissions of 219,476,343 tonnes of CO2 represents the average of the estimated annual emissions for the years 2004, 2005 and 2006 of all flights that would be covered by the EU ETS performed by aircraft operators to and from European airports. [By contrast, the rest of society is required to make carbon cuts based on 1990 levels. The aviation industry has been allowed to more than double emissions compared to 1990, by using the 2004 - 2006 level instead. Again, special treatment given to this industry. The UK overall has to make carbon cuts of 80% of the 1990 level by 2050]. Based on this figure for average annual aviation emissions in 2004-2006, the number of aviation allowances to be created in 2012 amounts to 212,892,052 tonnes of CO2 1, and the number of aviation allowances to be created each year from 2013 onwards amounts to 208,502,525 tonnes2 of CO2. The calculation of historic aviation emissions was based on data from Eurocontrol the European Organisation for the Safety of Air Navigation - and actual fuel consumption information provided by aircraft operators. Additional calculations were carried out to account for fuel consumption associated with the use of the auxiliary power units (APUs) on aircraft at airports. Background EU emissions from aviation have increased fast almost doubling since 1990. It is estimated that one passenger, flying from Brussels to New York and back in economy class generates in the order of 800 kg of CO2. To mitigate the climate impacts of aviation, the EU has decided to impose a cap on CO2 emissions from flights operating to and from EU airports. From the start of 2012, some 4,000 aircraft operators arriving and departing in the EU will be covered by the EU ETS. Like industrial installations, airlines will receive tradable allowances covering a certain level of CO2 emissions from their flights per year. Aviation represents around 10% of greenhouse gas emissions covered by the EU ETS. The inclusion of aviation in the EU ETS is expected to have only a minor impact on ticket prices. If an airline would charge customers for the full CO2 price, with the current carbon prices, the price of an economy class return ticket from Brussels to New York would rise by some 12 Later this year, as foreseen in the EU ETS Directive 3, the Commission will formally determine the amounts of emission allowances to be auctioned, to be distributed free of charge to aircraft operators and to be allocated to a special reserve for new entrants. The EU ETS

Directive states that Member States should use all auction revenues from aviation allowances to tackle climate change, including in the transport sector, and to adapt to the effects of climate change.

News update from Point Carbon

1. Largest 10 airlines face 30 million tonne shortfall in CO2 allowances in 2012 Published: 26 Sep 2011 16:36 CET Commission benchmark clarifies position of airlines as they join EU ETS London (26 September 2011) Today the European Commission published the benchmark by which airlines will be able to work out how many allowances they are to get for free when they join the EUs Emissions Trading Scheme (EU ETS) in January next year. According to Thomson Reuters Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets and RDC Aviation, the leading independent consultancy in aviation data modeling, this data shows that the largest ten airlines will face a 30 million tonne shortfall in CO2 allowances in 2012. The ECs benchmark implies that the revenue-tonne-kilometers (RTKs) reported by the 900 airlines for 2010 is 268 billion. According to Andreas Arvanitakis, who leads the aviation practice in the Advisory Department at Thomson Reuters Point Carbon, 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. 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 RTK total, at 268 billion, is higher than previously forecast by RDC Aviation and Thomson Reuters Point Carbon. A higher total implies a smaller share of free allowances for all airlines. As a result Thomson Reuters Point Carbon and RDC Aviation have increased their expected shortfall for all airlines. The ten carriers, as defined by their IATA code, with the highest shortfall, face a shortfall of nearly 30 million tonnes of CO2 in 2012 alone. To illustrate what this means to airlines, taking this months average price for the headline contract in the EU ETS of 12*, the total cost to the top ten would be 360 million next year. The top ten by shortfall in 2012 are: Air France, Alitalia, American Airlines, British Airways, Delta Airlines, Iberia, Lufthansa, Ryanair, United Airlines and Virgin Atlantic Airways. This is just an illustration of what costs the airlines may face. They can reduce this cost by looking carefully at their procurement of carbon credits, including for example Certified Emissions Reductions (CERs), which offer a substantial discount to allowances, says Arvanitakis, adding, airlines must bear in mind, however, that some CERs cannot be used for compliance in phase 3 of the EU ETS. So they need to avoid holding any surplus CERs after next year unless they know they are eligible from 2013. Arvanitakis thinks it is likely that airlines will pass on their costs to passengers and cargo clients where they can. The task now is to refine the carbon procurement and risk management strategies, says Arvanitakis. In such a keenly competitive industry, the emissions market may offer an advantage in terms of keeping costs below those of rival carriers. According to Peter Hind, Managing Director at RDC Aviation what analysts will be looking out for now is the impact of expected GDP slowdown on passenger numbers and whether this translates to fewer flights and lower emissions over the next 18 months.

Note to editors Aviation generates at least 3% of the EUs total greenhouse gas emissions and EU emissions from international air travel have doubled since 1990. The analysis detailed here used data from RDC Aviation, an independent data and consultancy in the aviation business, combined with Thomson Reuters Point Carbon analysis. *Market assessment on close for Dec 11 contract, average for 1-23 September 2011: 12.10. The Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in February 2005, resulted in the launch of the EUs Emissions Trading Scheme (ETS). The EU ETS is the worlds first international greenhouse gas emissions trading scheme. It works on a cap and - trade basis, where the total allocation is set at the start of a trading period. EU Allowances (EUAs) are the tradable units under the EU ETS. Up to a certain limit, companies regulated by the EU ETS are also allowed to import carbon permits from third countries (CERs and ERUs). Certified Emissions Reductions (CERs) are project credits generated from emission reduction countries in developing countries.

2. UPDATE 3: Airline carbon cap is legal, says EU's top court lawyer Published: 06 Oct 2011 09:55 AM CET Last updated: 06 Oct 2011 04:29 PM CET EU rules forcing airlines to buy CO2 permits from 2012 are legal, an adviser to Europe's highest court said on Thursday, sending carbon prices up nearly 4 percent on expectations that the European Court of Justice will follow that guidance in its final ruling due next year. The non-binding, preliminary opinion on the case lodged by U.S. airlines, which allege that obliging all carriers to surrender allowances for all flights into or out of airports in 30 European countries breaks international law, marks the latest stage in a bitter battle between the EU and foreign airlines that some say may escalate into a full-blown trade war. "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. Kokott called some of the arguments made by the plaintiffs "untenable" based on "an erroneous and highly superficial reading" of EU Directives, ECJ documents showed. While the opinion is not binding, judges at the ECJ, who are expected make a final ruling early next year, usually follow an advocate general's guidance. Observers also expect the London High Court of Justice, which referred the case brought by the Air Transport Association of America (ATA), American Airlines and United Continental to the Luxembourg court, to follow the ECJ's line. The ATA is disappointed that advocate general Kokott does not believe that the EU is bound by the Chicago Convention, the treaty governing aviation, the ATA said in a statement. ATAs view that the extension of this unilateral, regional scheme to aviation violates international law is supported by more than 20 countries, which recently reconfirmed their opposition to the EU. The countries, which include China, India and Russia, last week signed a joint declaration opposing their inclusion in the scheme, saying they would raise a formal protest at the next meeting of the U.N.s International Civil Aviation Organisation (ICAO) in November.

Sister organisation the International Air Transport Association (IATA) echoed the ATAs disappointment, urging the EU to agree to regulate airline emissions instead through ICAO, thereby avoiding a potential escalation of an international trade war. "We support and need positive economic measures as part of our strategy to manage aviations emissions. Emissions trading is one possibility. But it must be a global scheme under the leadership of ICAO, IATA director general Tony Tyler said. The principles for such a scheme were agreed in 2010 and ICAO is committed to delivering a global framework by 2013, he added. But Kokott said the argument that the EU should be prohibited from regulating airline emissions outside the framework of ICAO is "unconvincing". "Under the Kyoto Protocol, the limitation and reduction of greenhouse gases from aviation is not the exclusive competence of the ICAO," she said in her findings. "The EU institutions could not reasonably be required to give the ICAO bodies unlimited time in which to develop a multilateral solution." RETALIATION The European Commission welcomed the ECJs preliminary opinion, reiterating that it would not succumb to international opposition to its plan to regulate climate-warming gases from commercial aircraft. I am glad to see that the advocate general's opinion concludes that EU Directive is fully compatible with international law, said EU Climate Action Commissioner Connie Hedegaard. The EU reaffirms its wish to engage constructively with third countries during the implementation of this legislation. The 27-nation blocs executive maintains it could exempt airlines from countries that have adopted climate policies deemed equivalent to Europe's targets, which aim for a 20 percent reduction in CO2 emissions below 1990 levels by 2020. But some nations have scoffed at the offer, with China blocking a $3.8 billion aircraft purchase by Hong Kong Airlines from France-based Airbus at the Paris Air Show in June. India has very clearly indicated that if Europe proceeds it will (also) retaliate, IATAs Tyler added. Ulrich Schulte-Strathaus, secretary general of the Association of European Airline, called the situation "extremely worrying". "We have deep concerns that the European air transport industry will be caught in the crossfire as key trade partners retaliate, he said. With just 87 days to go (until the start of the EU's aviation ETS), the clock is ticking very loudly and the chorus of third-country indignation is deafening." COSTS

From January 1, around 4,000 operators regulated by the EU scheme will have their CO2 capped at 97 percent of the sectors average annual emissions from 2004 to 2006, receiving free permits equal to 85 percent of that amount. The cap will then tighten to 95 percent from 2013 to 2020, when the airlines will get 82 percent of their quota for free. The remaining 15 percent of permits, known as aviation EU allowances (AEUAs), will be sold in auctions, while from 2013 the remaining 3 percent will be set aside for new entrants and fast-growing carriers to the scheme, the EC said. Thomson Reuters Point Carbon estimates the total 2012 cost for all airlines to comply with the scheme at around 1.1 billion euros ($1.46 billion) based on a price of 12 euros per permit. That sum will likely put a major dent in the industrys profits, which are expected at roughly $4 billion this year, before the introduction of any carbon caps, according to the IATA. "That so many major airlines have jumped on the bandwagon of criticizing the EU ETS, an extremely modest measure equivalent to one cent a litre on (untaxed) kerosene, is just opportunistic and irresponsible," said Bill Hemmings of Brussels-based green group Transport & Environment. "The aviation industry should be tackling climate change with engineers, not lawyers." 3. ANALYSIS: Airlines look to ICAO to overturn EU aviation victory Published: 11 Oct 2011 07:29 PM CET The European Commission may have won the latest legal battle to include airlines in the EUs emission trading scheme, but the plan faces a potentially unwinnable fight at the U.N.s aviation body and a looming trade war looks far from being avoided. An adviser to Europes highest court last week ruled that forcing airlines that fly into or out of EU airports to surrender CO2 permits from 2012 to match their emissions was legal under international law -- the latest act in a play showcasing rising tensions between the fast-growing aviation sector and the 27-nation blocs executive. Although the European Court of Justice Advocate Generals preliminary opinion on the case brought by several U.S. airlines is predicted to foretell the courts final ruling due next year, observers say a delay to the schemes January 1 start date may also be unavoidable. This will go down to the wire, as everything usually does with EU crises, said Brian Havel, director of De Paul Universitys International Aviation Law Institute in Chicago. I would say that a delay in the extension of the emissions trading scheme (ETS) to airlines will become politically inescapable in the next few months. Russias Deputy Transport Minister Valery Okulov this week said Moscow will table legislation similar to that passed in the U.S. in July, which prohibits the countrys airlines from participating in the scheme, Russian business daily Vedomosti reported on Monday. Okulov, estimating the scheme would cost Russian airlines $20-25 million next year, warned that

Russia may also file a formal complaint at the next meeting of the U.N.s International Civil Aviation Organisation (ICAO) in November, a tactic threatened in a joint declaration signed by at least 25 other countries including the U.S., China and India. A complaint to the ICAO Council may force the (EU) Commission to suspend the ETS start date while ICAO talks take place. That's really what transpired with the hush kit dispute a few years ago, Havel said, referring to a row between the U.S. and EU over planes outfitted with engine mufflers. In 1999, the EU banned hush-kitted aircraft in a move to deter European operators from buying older models and fitting them with the device instead of buying new planes, but the U.S. protested to the ICAO Council, saying the measures would hurt American manufacturers. The ICAO rejected the ban and eventually introduced tougher global noise standards for aircrafts in 2001, forcing the EU to delay its directive before repealing it completely and replacing it in 2002 with new legislation that fell in line with ICAO rules. TOUGH ODDS Although the Advocate General ruled that the EU could not reasonably be required to give ICAO unlimited time to develop a multilateral solution, the aviation scheme could face an even tougher challenge in November as its odds of winning support from the ICAO Council are not looking good. If tabled, a motion opposing airlines mandatory participation in the ETS could go to a vote by the 36member Council, meaning the measure would need a majority of 19 supporters to pass, Denis Chagnon, a spokesman for ICAO, told Point Carbon News. As the EU has only observer status at the ICAO, European support will likely need to take the shape of backing from individual member states. However, just eight European countries sit on the current Council, meaning the EU will need to canvass wider support from other members, for example Australia and Japan, which are developing their own national emissions trading schemes. But Japan is one of 20 Council members that signed the September 30 declaration opposing the scheme, meaning that despite the ECJs preliminary ruling, the EUs aviation ETS may be assured ICAO rejection. TOTALLY FALSE International pressure has been mounting for months on the bloc to postpone the aviation ETS, and media reports on Monday indicating the Commission might capitulate briefly ruffled the EU carbon market, sending prices lower before an EC spokesman dismissed the rumour. Totally false, he said, referring to news that EU Climate Commissioner Connie Hedegaard would hold talks over the objections to the scheme, which had allegedly drawn new support from seven unnamed EU member states. But the first shots in what could escalate into an international trade war have already been fired. China in June blocked a $3.8 billion aircraft purchase by Hong Kong Airlines from France-based Airbus, while the International Air Transport Association has warned that India will likely follow suit with its

own anti-EU trade measures.

4. China, EU fail to solve aviation ETS problem, lawsuit looms Published: 18 Oct 2011 01:39 PM CET Last updated: 18 Oct 2011 02:43 PM CET An EU delegation to Beijing has failed to convince the Chinese government that its policy of capping the emissions of Chinas airlines is legal, an EU official said Tuesday, bringing closer the potential for a lawsuit. Chinese authorities, the Civil Aviation Administration of China and private airlines all rebutted the EU argument that it has the right to force foreign airlines to comply with CO2 limits under the EU Emissions Trading Scheme, Jos Delbeke, director general of the European Commission's climate department, told reporters. We agreed to disagree, Delbeke said at a press conference in Beijing, adding that the parties will continue to discuss the situation. If an agreement cannot be reached, airlines have the option to sue the Commission, he said. Starting from January 1, 2012, all airlines operating flights in the EU will be forced to surrender carbon permits to cover their emissions. For the first year, airlines will be given 85 percent of their allocation of permits for free but will have to buy the rest in the market. The China Air Transport Association (CATA) has estimated this would cost Chinese airlines 800 million yuan ($125m) in 2012 and more in subsequent years. We are very determined to say it is not a violation of the Chicago Convention (governing international aviation), neither is it in violation of the U.N. Climate Convention, said Delbeke. WIDE OPPOSITION He added that as well as China, the EU has recently been in similar talks with the U.S. and Russia, which have also questioned the legality of the EUs stance. A group of U.S. airlines have also filed a lawsuit against the EU law, with the European Court of Justice expected to rule on the case early next year. In June, Hong Kong Airlines, owned by Chinas Hainan Airlines, reportedly held up the purchase of 10 EU-made Airbus 380 aircraft to put pressure on Brussels to change the legislation, sparking fears that the issue could lead to a trade war. Earlier on Tuesday, however, Reuters reported that China Eastern Airlines cancelled an order of 24 USmade Boeing 747 Dreamliner planes and ordered 15 Airbus A330s, signaling that the ETS issue might be considered less important in China than U.S. legislation targeting Chinas currency policy. Delbeke said the parties this week had discussed the possibility that Chinese carriers could be excluded from the EU cap-and-trade scheme using a provision in EU law that grants exemptions if governments take what are deemed equivalent measures to curb emissions.

Chinese carriers eventually could be exempted because Beijing plans to require its airlines to reduce their carbon intensity to 22 percent below 2005 levels by 2020.

News update from IATA Date: 10 October 2011 1. Another Blow to European Competitiveness - Air Traffic Management Improvement Off Course Geneva - The International Air Transport Association (IATA) warned today that states are falling behind in their commitments to improve Europes notoriously inefficient air traffic management. According to the latest independent Performance Review Body (PRB) report and the draft recommendations from the European Commission, states are falling behind in their legislated commitments to deliver improvements in operational, financial and environmental efficiency. Everybody agrees that high costs, delays, environmental waste and circuitous routings are not acceptable. But the problems are not going to fix themselves. Airlines have invested in aircraft and technology to operate at the highest levels of efficiencyoften times ahead of what ANSPs are capable of. And we are ready to help drive efficiencies further. But it is the responsibility of states to ensure that their air navigation service providers are delivering what is needed, said Tony Tyler, IATAs Director General and CEO. Last year, states committed to improve the cost efficiency of air navigation services by 3.5% annually for 2012-2104. At the request of individual states this was reduced from the Performance Review Bodys proposed target of a 4.5% annual gain in cost efficiency. Watering down the targets to 3.5% is costing the competitiveness of Europes connectivity EUR 1 billion over the period 2012-2014. Now because of inaction we are facing a further hit of EUR 256 million. When targets are agreed, state leadership must ensure that they are met. This is not the time for complacency, said Tyler. The PRB report shows that 21 of 29 European states failed to make adequate contributions to the costefficiency target. According to the PRB report, the 10 air navigation service providers (ANSPs) who are contributing least to the cost reduction targets are: Malta, Cyprus, Estonia, Hungary, Slovakia, Germany, Spain (continental), United Kingdom, Czech Republic and Finland. The total shortfall is 2.4% according to the PRB, which will equate to a total cost of EUR 256 million of unrealized savings for 2012-2014. The real story is with the Big Five ANSPs Germany, UK, France, Italy and Spain. Being responsible for 54% of the costs of air navigation services in Europe, the success of the performance scheme is dependant on these states meeting their share of the required cost reductions with no shortfall, said Tyler. The performance improvement targets are an integral part of the Single European Sky Package II (SES II) approved by the European Unions Transport Council in March 2009. The SES cost-efficiency objective is a 50% reduction in air traffic management costs by 2020. The latest reports indicate that the ANSPs are hardly achieving cost containment, let alone the needed reductions, said Tyler. Alongside improving cost efficiency, SES aims to increase airspace capacity by over 70%, improve the safety record by a factor of 10 and reduce the effects of air transport on the environment by 10%. The PRBs report further noted that that six performance plans (Austria, Greece, Poland, Spain, United Kingdom, and FABECcovering Germany, Belgium, France, Luxembourg, the Netherlands and Switzerland,) do not make adequate contributions to meeting the EU-wide capacity target. If the European ANSPs cannot meet modest short-term goals, then there is no chance of meeting the significantly more ambitious but necessary targets that are required for the second phase of the

Performance Scheme (2015-19). States and ANSPs need to close the gap and return to course, said Tyler. 2. Global Standards Must Be Cornerstone for Euro-Russia Aviation - Industry a Ready Partner

Date: 12 October 2011 St. Petersburg - The International Air Transport Association (IATA) urged Russian and European officials meeting at the Euro-Russia Aviation Summit in St. Petersburg to make global standards the cornerstone of their discussions on the development of aviation in these two important markets. Re-emphasizing Russian and European leadership in the development of aviation based on global standards would be the most important conclusion of this summit. The Russia-Europe relationship is strategically important for global aviation. Combined, Europe and Russia account for about 37% of world traffic capacity and control a critical portion of airspace. These two markets have a great impact on global aviationoperationally, commercially and from a policy perspective, said Tony Tyler, IATAs Director General and CEO while addressing the opening plenary of the summit. Global air transport was built on global standards. Governments and industry have worked closely together with the common purpose of linking the world safely, securely, efficiently and with the highest level of environmental responsibility. Industry is here today as a committed partner to working with Europe and Russia in the further development of sustainable global air links, said Tyler. IATA emphasized the key industry priorities of safety, security, environment and a level commercial playing field: Safety: Working with carriers operating Western-built jets and more modern Russian equipment, the IATA Operational Safety Audit (IOSA) has made a big difference in Russias safety performance. Of course, IOSA carries no guarantees. But none of the 14 Russian IOSA carriers has had a fatal accident since registration. I believe that this is more than a coincidence. We are eager to work with the government to further integrate this standard into Russian aviation, along with our safety audit for ground operationsISAGO, said Tyler. IATA also noted that infrastructure in Russia needs major upgrades to support both safe and efficient operations. As users of the system, we stand ready to provide our expertise to ensure that these investments deliver the best value for the investments that are required, said Tyler. Security: IATA is championing a Checkpoint of the Future concept that will make airport screening processes both more effective and more convenient. This will work best as part of a global system. I am encouraged by the support from the US and the EU. I hope that Russia will soon join the growing list of countries endorsing this concept, said Tyler. Environment: IATA urged Euro-Russian cooperation to support aviations ambitious environmental commitments. Our interest is in reducing emissions to ensure aviations long-term license to grow. The best results will come if governments cooperate globally to facilitate our success with coordinated measures under the leadership of the International Civil Aviation Organization. I hope that this summit will be an opportunity to identify solutions to the growing rift between Europe and the rest of the world as a result of Europes unilateral approach to including international aviation in its emissions trading scheme from next year, said Tyler. Level Commercial Playing Field: Protectionism or isolationism is never a long-term solution for a healthy industry, said Tyler who noted that IATAs Simplifying the Business program is a good example of global standards bringing market benefits. Minister Igor Levitins personal intervention changed legislation that facilitated e-ticketing. This ensured that Russian carriers received their share of the $3 billion annual savings achieved by eliminating paper tickets worldwide. Now we encourage

the Russian government to adopt the Montreal Convention 1999 so that e-freight can bring similar benefits to Russias fast-growing cargo industry, said Tyler. Date: 18 October 2011 3. News Brief: Simplified Interline Settlement is a Reality - Efficiency, financial and environmental savings

Date: 18 October 2011 Montreal - The International Air Transport Association (IATA) launched Simplified Interline Settlement (SIS) which removes paper documents from the airline industrys interline billing and settlement process. When fully implemented in 2013, SIS is expected to: Eliminate paper invoice creation and distribution between airlines Provide annual cost savings to the industry of $450-700 million through the elimination of paper, mail charges, courier fees, lost documents, internal paper handling, and system and process efficiencies Provide environmental benefits through the elimination of paper documentation and the need to transport it Approximately 160 tonnes of invoices and supporting documents are shipped among airlines around the world each year to support the industrys interline billing and settlement process. In addition, activities such as invoicing and dispute handling are still largely paper-driven, involving substantial manual effort. With SIS, a carrier will submit a single electronic billing file that will be converted into an invoice and a settlement file, sent to the billed airline, and cleared and settled through the IATA Clearing House (ICH). This avoids duplication and improves efficiencies. The solution is tightly integrated into a single platform called Integrated Settlement (IS). All 350 ICH members will benefit from the new service for the $50 billion annually that is processed in the system. SIS is the culmination of three years of hard work and close collaboration between the airline industry, IATAs expert team and the technology supplier Kale Consultants. SIS will modernize the industrys back office and make interline billing and settlement a fast, standardized electronic process that will bring efficiencies and reduced costs to the entire industry, said Aleksander Popovich, IATAs Senior Vice President, Industry Distribution and Financial Services.

10 Questions about aviation answered by PWC Emissions trading for aviation 10 questions Contents 1. What is the European Union Emissions Trading Scheme (EU-ETS)? 2. What does the EU-ETS mean for aviation? 3. Who is affected?

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Next Steps 2009 Readiness review of all organisational aspects Perform pre-verification to ensure verifiable MPs and cost effective M&R systems Submit monitoring plan for allocation (and CO 2 data) Business impact assessment (based on extended model) Identify carbon credit procurement strategies, trial trades Adapt strategy and organisation Implement monitoring (IT) system, build up carbon trading and market knowhow Review leasing contracts it needs to be clear who will own the rights from transport data of 2010 2010 Get familiar with auctioning rules Verification of allocation and CO 2 emissions data

Disclaimer PwC has taken all reasonable steps to ensure thatinformation contained herein has been obtained from reliable sources andthat this publication is accurate and authoritative in all respects. However,it is not intended to give legal, tax, accounting or other professional advice.If such advice or other expert assistance is required, the service of acompetent professional should be sought.

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