Airlines seen paying billions in EU emission scheme

BRUSSELS, June 6 (Reuters) The cost to airlines of joining the European Union's emissions trading scheme would be 9.8 billion to 45 billion euros (.3 billion to .9 billion) between 2011 and 2022, a study showed on Wednesday.

Airline profits would be cut by more than 40 billion euros from 2011 to 2022 if carriers were included in the scheme, the study, commissioned by the airline industry and conducted by Ernst&Young, said.

The aviation sector is slated in 2011 to join the scheme, the 27-nation EU's key tool to fight climate change and meet commitments to cut greenhouse gases under the Kyoto Protocol.

The study calculated costs based on the price of carbon dioxide (CO2) ranging from 6 euros a tonne to what it called the ''commonly agreed price'' of 30 euros a tonne, thus giving the differing figures.

Groups such as the International Air Carrier Association and the European Regions Airline Association (ERA) said they accepted that joining an emissions trading scheme was the most logical step to become more environmentally friendly.

''We are not expecting to get away for free,'' Mike Ambrose, director of ERA, told reporters.

The groups said the European Commission's calculations of how much CO2 airlines emitted were based on 2004-2006 figures and did not take into account average annual growth in the industry of 5 percent.

This means airlines would have to spend billions on buying extra CO2 allocations, above those that they would be granted for free.

Under the scheme, companies are allocated CO2 permits, usually for free. They can sell them if their emissions come in under a target, or buy them from others if they need more.

REUTERS DKS GC1634