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Etihad CEO calls ETS 'revenue-generating tax'

By control on September 23, 2011

Etihad CEO James Hogan added to the din of criticism against the European Union's emissions trading scheme and its application to the aviation industry Thursday, saying the project is simply a way to squeeze money from foreign airlines routing into Europe. At a meeting of the Wings Club in New York City, Hogan said the EU ETS "is not an effective environmental policy."

"Quite frankly, it's a revenue-generating tax, plain and simple," he added. "We can not support legislation that unfairly penalizes the industry."

The scheme, which goes into effect January 1, will put a cap on the carbon emissions of airplanes flying into and out of Europe. If this cap is exceeded, the airline will have to buy additional carbon allowances at market price. EU spokesman Issac Valero-Ladron has said the money collected will be allocated toward environmental research in the EU and in third-world countries.

Hogan, in his speech on Thursday, saw things differently, saying "the aviation industry should not be a whipping boy when it comes to the environment."

Hogan has made sustainability a key tenet of Etihad's outlook, which he said ties in with what he called the "green technology revolution" currently underway in the United Arab Emirates. The goal of country officials, he said, is to turn the UAE from one of the No. 1 carbon-emitting nations to a leader in sustainability.

But EU officials contend that with the EU ETS, they are simply trying to achieve the same thing. Including aviation in the European Union’s emissions trading scheme — a project that has been in the works for a number of years — is a direct reaction to the International Civil Aviation Organization’s lack of progress, Valero-Ladron said. And while some aviation officials have suggested that the ETS can still be amended, Valero-Ladron said it’s basically set in stone.

“This is not a proposal; this [is] adopted legislation,” he wrote in a document outlining the inclusion of aviation into the EU’s ETS. “We do not intend to back down or modify our legislation.”

As for the future of Etihad, Hogan said they will be opening up new gateways to Los Angeles and Washington, D.C., in the next five years. The carrier is about to start flying into East Africa, he said, and will tackle South America in 2015.

No matter the direction of expansion for Etihad, sustainability will always be in the plan in the form of new technologies and greater partnerships with aviation firms.

"The environment cannot be an afterthought for business," he said. "I say that not as a tree hugger, but as a pragmatist."

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