EU carbon law could boost airline profits

Power companies participating in ETS have already reaped profits

Contrary to expectations, airlines could actually get an unexpected windfall from the European Union’s Emissions Trading Scheme, says a new study by the University of Muenster in Germany and the Massachusetts Institute of Technology. The study, directed mainly at US airlines, states that this is because airlines currently receive most of their permits free, yet they will probably be passing the cost of EU carbon permits on to passengers. This means that US airlines could in fact get a profit boost of around $2.6 billion by 2020.
Big polluters like power companies, which have participated in the ETS for seven years, initially raised prices for consumers to match the cost of carbon permits, including those allocated to them for free. They therefore made significant windfall profits.


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