Airlines snap up carbon credits

Several of the world’s largest airlines are buying up carbon allowances at bargain prices, which is helping to bolster the price of carbon, which fell to an all time low in December.

The EU Emission’s Trading Scheme came into force for airlines at the start of the year, meaning any aircraft taking off or landing in the European Union must pay a carbon tax. The United States and China have been vociferously against the tax, but the European high court has ruled that the tax is just and will now go ahead as planned.

"We are continuously buying allowances," Peter Schneckenleitner, a spokesman for Deutsche Lufthansa AG. Many companies see this as a prime opportunity to buy up allowances while the price is low. The price of 7 Euros per tonne is half the value of a year ago.

The EU is ‘grandfathering’ 85% of the emissions, so that companies will only have to buy around 15% of their carbon, but these allowances will diminish in future, forcing airlines to find ways to reduce emissions, or find that they are unprofitable.

An over supply of carbon credits and the recession has meant the value of carbon has deflated. It is hoped this new demand will raise the price of carbon and confidence in the whole carbon market. However, the airlines themselves, whilst complying with the measures are still not convinced of its worth. "We do not agree with it and we do not believe there will be any environmental benefit," a spokesman for Ryanair has said.