Minutes of the external advisory group, 16 June 2005

16 June 2005, Great Minster House

Attendees: David McMillan (Chair), Barry Humphreys - Virgin, Jonathan Sharrock (DfT), Ken Crawford - Scottish Executive, Martin Capstick (DfT), Jim Bailey - SASIG, Sam Whatling (DfT), Keith Jowett - AoA, Dipak Valand (DfT), Mike Toms - BAA, Emily Robertson (DfT), Rowena Burns - MAG, Simon Evans - AUC, Peter Lockley - AEF, Roger Wiltshire - BATA, Nic Ferriday - FoE, Stephen Aylward - BA, Simon Buck - Charter Airline Group

Apologies: Owen Simon - CBI, Alison Pridmore - SDC, Gareth Harper - Transport 2000

Introduction

David McMillan welcomed the members to the third meeting of the External Advisory Group.

Update on report to the June White Paper Programme Board

Jonathan Sharrock updated the group on the latest changes to the White Paper Implementation work areas. The key change is that six priority work areas are now reported to the WP Programme Board. This reflects views expressed by the Programme Board and those received at the EAG meeting in February. The six work areas are Stansted; Heathrow; Birmingham, Edinburgh and Other Airports; Emissions Trading; Route Development and European Policy and 2006 Progress report.

The main messages in the June Programme Board report were summarised as follows:

Stansted - The status of this work area is red. This reflects continued work programme pressures and the delay to the runway timetable. No.10 and HMT were recently briefed on progress with the Stansted work.

PSDH - Work is broadly on track. NATS have submitted a report on the viability of mixed mode. A PSDH project board is being set up with its first meeting scheduled for September.

Birmingham, Edinburugh and Other Airports - This work area is rated as green reflecting the progressive transfer of responsibility to Government Offices (GOs). A successful training seminar was held in April to explore how airport work might fit into GO business plans. Plans are being taken forward to establish project boards for Birmingham and Edinburgh.

Emissions Trading - Progress on this was the main item for discussion at the meeting.

Route Development and European Policy - The Government is lobbying the EU Commission, other Member States and stakeholders to support its position on commercial slot allocation mechanisms. Informal consultation is underway on sanctioning mechanisms required in slots regulation 793/2004. Work on PSO guidance is continuing. The RDF Protocol and appraisal framework was formally notified to the Commission in June.

2006 Progress report - This is a new work area with work currently focused on scoping the possible requirements for the Progress Report. Ministers will consider this in September.

Aviation and Climate change presentation from Martin Capstick

This reported on the UK's response to the European Commission consultation on aviation and climate change issues. Work was intensifying in the run up to the UK Presidency, involving Defra, HMT and other member states. DfT was expecting an EC communication in mid-July. However this was subject to inter service consultation if there were any delay, DfT would hope the communication would issue in September.

Two groups were formed and were invited to consider the following questions:

(a) Design of an ETS - what are the key design features and the issues to take into account?

(b) What would be a successful outcome the EU Presidency?

Summary of Group Feedback on Design of an ETS scheme:

A key theme was that with some members of the group highlighted the need for the scheme to address the climate change impacts fully, there was also recognition of the need to make any scheme practicable and workable.

Four main issues were identified:

Sector specific scheme within aviation ('closed'), or multi-sector ('open'), aviation trading within wider ETS?

The group noted that as international aviation was not covered by the Kyoto protocol, the aviation sector could not participate completely freely in the ETS.

Scope of the scheme - who is participating: Flights only within EU, or any arriving or departing from EU? - Including only flights within the EU would be a practicable basis on which to start a scheme but would be less comprehensive then a scheme covering all departing and arriving flights.

Allocations: Setting of the overall 'cap' is crucial - An ETS could incentivise those in a position to invest in new technology. However, depending on the allocation methodology used (benchmarking, auctioning, grandfathering), airlines who have already upgraded their fleet might be disadvantaged. The group favoured an arrangement such as benchmarking which did not penalise early movers.

Environmental objectives of scheme: Would ETS include just CO₂ or other GHG? The group felt that the impact of other emissions needed to be studied further but that it was important to make progress CO₂.

Summary of Group Feedback on Outcomes of the UK's EU Presidency:

Suggested Good Outcomes:

Agreement from Member States that intra-EU ETS was the way forward

Agreement of a basic principles of a scheme.

Long-term commitment to allow industry to plan ahead.

An agreement with Member States on an approach within ICAO to push for world-wide ETS.

Other comments:

There was a need to focus on ways to mitigate possible economic distortion.

Visibility was important for business planning - as uncertain assumptions could become costly.

Need for stakeholders to influence European partners and to work with public/passengers.

Need to see ETS pushed further up the October EC agenda.

Summary

Martin Capstick summarised the discussion noting that it had been constructive and had demonstrated a high degree of interest in the subject matter. The EAG's collective views represented an ambitious agenda for action. Developments would continue to be relayed back to the External Advisory Group as progress was made and the options became clearer.

David McMillan invited suggestions on issues the group would like to be covered in future meetings and also welcomed any feedback on the value of the EAG and how it works.

The next meeting was scheduled for 28 October 2005 at 10.30am.

Programme Management Office

Airports Policy Division

28 July 2005