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Saudi Arabian airline ordered to ignore inclusion in EU ETS

2 October 2012

Saudi Arabian airline ordered to ignore inclusion in EU ETS

Saudi Arabia has instructed its national airline, Saudia, not to comply with the EU’s regulations on aviation-related emissions, Bloomberg has reported. According to the report, the EU has been notified of this decision and discussions are underway to try and reach a compromise. The move follows the US Senate’s draft legislation that could prohibit US airlines from participating in the scheme.

In February, Saudi Arabia issued a joint statement with the US, China, India and 25 other nations that laid out their opposition to the inclusion of their airlines in the EU ETS. The principle objection that was articulated by the signatories was that the EU’s measures were being conducted outside of the UNFCCC and that efforts currently being pursued by the International Civil Aviation Organisation (ICAO) offered a more acceptable

Comment

As the only Saudi airline that flies to Europe, Saudia is not a major contributor to emissions, especially when compared to some of Europe’s domestic airlines. However, this news is significant as Saudi Arabia is the first smaller nation (relative to China and the US) to explicitly tell its national flag carrier to not comply with the EU’s regulations. In addition, the more foreign airlines that decide to pursue non-compliance, the more domestic EU airlines will feel that they are being put at a competitive disadvantage adding to the pressure to resolve this issue.

However, we are of the opinion that the EU stands to lose too much face if it backs down and as a result the only way this issue is going to be resolved is via a global agreement through the auspices of ICAO. When this will happen is anyone’s guess.

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