(openPR) - Frankfurt-Karben, Germany / 10 September, 2009: The aviation sector is embarking on a new challenge through entry into the EU ETS, and as the airline operators undergo enormous pressures to cut costs and increase efficiency, it is in their best interests to embrace the positive strategic implications which the EU Emissions Trading Scheme offers.

Carbon monitoring and the foundation of a market for carbon trading was very new in 2005 – but other industries over the last few years have successfully navigated this hurdle and learned many valuable lessons along the way. Here GALLEHR+PARTNER, the leader in navigating companies through the administration, management and trading of carbon emissions, share some key points in supporting the aviation sector.

Sebastian Gallehr, CEO of GALLEHR+PARTNER said: “The temptation is great for many airlines to bury themselves in their data and rely on IT systems to produce their first monitoring report. What they need to be doing is reviewing their strategy for the next 10 years, assessing the risks and opportunities which the ETS will bring, and the last thing on their list should be how they will automate their data to produce their monitoring report.

“The 2010 monitoring report will form the basis for emissions allowances for the next 9 years - our advice here is to take a step back and use the time available to approach this from the business perspective, the intelligence is after all in the people and not in the system. With the right strategy of managing and trading CO2 Emissions even a small airline can save up to 70% of their costs.”

Lessons Learned Apply Equally to Aviation Sector

1. Strategy First: 2010 forms the basis for emissions allowances for the next 9 years – the 2010 monitoring report will therefore be the framework for the airline operators future plans. For example, should an airline be planning for growth post 2010, this growth has to be funded through the ongoing purchase of additional emission allowances. The next 9 years may include major world events which could dramatically increase flights which need to be made to and from a certain country (e.g. sporting events) and the flexibility needs to be available to accommodate this. If the necessary risk management has not been done there will be no provision in the business plan to manage this and costs could spiral.

2. GAP Analysis: Based on your strategic requirements airline operators should now review their data sources, data capture methodologies and processes in order to assess what processes or data capture now need to be put in place. It is only once these processes and procedures are identified that discussion can begin about how to automate them for efficient date capture and reporting at a late stage.

Note: Although the deadlines for submission of monitoring plans may have been delayed – as of Jan 1 2010 the reporting has to begin. It is possible that approval and/or modifications for the monitoring plans will also be delayed – meanwhile reporting is underway and if that reporting is based on a good foundation then any necessary adjustments will be easy to manage.

3. ETS Opportunity: The Emissions Trading Scheme (ETS) is a market environment which, when approached strategically and with market-based understanding, can not only support growth but provide valuable liquidity and flexibility. How will airlines manage their trading in the ETS? Experience gained in working with other industries has shown that a long term plan now can turn the ETS into an opportunity for ensuring liquidity as and when needed. Now is a good time to learn the basics of the existing carbon market and, based on the expected allocations, to start experimenting with potential scenarios based on the current market cycle and behavior.

Sebastian Gallehr concluded: “Time well invested now will ensure a relaxed and “no surprises” entry into the EU ETS – Aviation has the advantage that other industries did not have – namely that someone has been there before, and the valuable lessons learned can now be passed on.”

GALLEHR+PARTNER is a consulting company with technological and business expertise in the sphere of Energy and Climate Change. Since 2003, GALLEHR+PARTNER has successfully consulted power supply companies and other energy-intensive industries. Focus in the aviation sector concerns the issues Carbon Strategies and Emissions Trading, Risk Management, Energy Management and IT and/or Process Optimization. From the very beginning, GALLEHR+PARTNER engaged itself with new issues within these areas for the benefit of the customers. German based GALLEHR+PARTNER are active throughout Europe and Asia.

As well as founder of GALLEHR+PARTNER, Sebastian Gallehr is also CEO of the European Business Council for Sustainable Energy (e5), founding member of DESERTEC and is member of the European Climate Forum where he is process leader for Education.

GALLEHR+PARTNER joined the IATA (International Air Transport Association) Strategic Partnerships programme in 2008 to further promote understanding of environmental strategies, and in particular understanding of the Emissions Trading Scheme and its potential impact on the aviation industry. To learn more about IATA Strategic Partners and the Strategic Partnerships programme, visit the IATA Web site at www.iata.org/sp

Judith Raddatz
Gallehr Sustainable Risk Management GmbH,
GALLEHR+PARTNER

Hauptstrasse 43
D-61184 Karben
Tel: +49 6081 585260
Mobile: +49 1577 7532 791
E-mail: judith.raddatz@gallehr.de
www.gallehr.de