Comprehensive Services for the Aviation Sector
Charting your way in the carbon credit market
As of 2012, all flights arriving at or departing from airports within the EU will be subject to the EU-ETS. This means that by 2020 the CO2 emissions of those flights are to be reduced by at least 20% of their 1990 levels. Airlines around the world are grappling to come to terms with this new challenge. First Climate supports airlines in understanding the carbon credit market they are to become part of and offers a range of services tailored to the needs of the aviation industry.
At the same time, passengers are increasingly concerned about climate change and are looking for ways to travel in an environmentally sustainable manner quite independently of the EU ETS. Airlines and other aviation industry players are working to enable their customers to do so. First Climate offers airline operators the opportunity to reduce the impact of the carbon emissions unavoidably caused by air travel by offsetting these emissions with the help of emission reduction projects.
Your challenges under the EU ETS
Monitoring, reporting and management systems
Although the deadline for submitting monitoring and reporting plans has passed, airlines are still working on their plans and processes for monitoring, reporting and verifying the tonne-kilometre and emissions data required by the EU.
Obtaining sufficient allowances
Aircraft operators will be fined €100 per tonne of CO2 emitted in excess of the aviation allowances or other allowances accepted by EU authorities. Some observers expect shortages of up to 30%. At the same time, pending regulatory changes are likely to lead to significant reductions in carbon credit supplies after 2012. The challenge of securing a large enough portfolio of carbon credits is thus taking on a whole new dimension.
Controlling the costs of compliance
Given the highly fluctuating nature of emissions in the aviation industry and the price volatility seen in the carbon credit market to date, airlines face potentially high costs in fulfilling their compliance obligations. In light of the expected increase in EUA prices after 2012, now is the time for airlines to understand and consider their options for cost-efficient compliance with the EU ETS.
Strategic cooperation with Lufthansa Consulting
In order to offer the best possible combination of market expertise to our customers in the aviation industry, First Climate has entered into a strategic cooperation with Lufthansa Consulting, a leading aviation and management consulting company. (Click here to read the relevant press release)
Together we offer our customers in the aviation industry the following services:
1. Set-up and implementation of reporting structures
First Climate and Lufthansa Consulting assist clients in preparing for their reporting duties, the planning process required, and in creating and implementing tailor-made monitoring methods and systems.
2. In-depth carbon market and policy analysis
Understanding the market is crucial if airlines are to be able to take considered and effective decisions regarding their emission allowance portfolios. Together we offer research reports and workshops to our clients to ensure they always have the information they need to make decisions.
3. Perfect-fit strategies for the carbon market
A strategy that is based on an airline‘s particular requirements is fundamental in determining the success of its dealings in the carbon credit market. We work out individual strategies for fulfilling airlines’ compliance duties that take into account the availability of emission data as well as price trends and policy developments. These strategies enable our clients to make optimal use of the various options available under the EU-ETS, including the timing of carbon trades and the type of allowance that is most cost-efficient.
4. Market access
First Climate is an established player in the carbon credit market. With fourteen offices on five continents, we have access to a range of primary CDM/JI projects and the CERs and ERUs they generate both pre and post-2012. At the same time, First Climate has access to the most important trading centres around the world, where EUAs, CERs, AAUs as well as any related derivatives are being traded. First Climate manages emission allowances on behalf of its clients. Larger clients may prefer to use our advice in setting up their own trading desks.
5. Pooling options
Large companies or pools of smaller companies may find carbon funds or other pooling options a useful tool to combine and hedge their compliance obligations and trading activities. First Climate has market leading experience in carbon fund management. We are advisor to a number of institutional carbon investment portfolios and have been chosen as investment advisor to the Post 2012 Carbon Credit Fund launched by the European Investment Bank and four other European public finance institutions.
To discuss how First Climate can assist you in fulfilling your obligations under the EU ETS or enable you to offer your passengers the possibility to offset the emissions caused by their air travel please contact us
