 Okay so why did we deal with aviation in the EU ETS? And I think that it is good to remind ourselves that the EU has a fairly well established climate change policy and the well established climate change policy is having a target. In fact we already agreed to reduce greenhouse gas emissions with on average 20 per cent by 2020 measured on 1990 levels and we would go deeper down to minus 85 per cent by 2050. So that's clearly a downward trend and we have as tools already in place the European emissions trading scheme you know that is a kind of system where allowances are given or bought by companies to cope or to offset their emissions and if they have a surplus of these allowances they can sell them to someone else. So there is a market of these allowances and we have of course also targets for all installations falling out of the European emissions trading scheme. The emissions trading scheme covers roughly half of the emissions of Europe let's say all power stations and all industrial facilities. What falls out are households transport etc for which we have specific legislation and so we come to aviation because we are regulating our cars for example and we have very demanding legislation that has been picked up very well by the car manufacturers and so on transport we see all the time growing trends and so the question was what is going to happen in aviation and when we take the analysis that was done by IKO the International Civil Aviation Organization they expect by 2050 a growth in aviation emissions from on average between 300 and 700 per cent. So instead of going down with 85 per cent we just go up with 500 to 300 to 700 per cent which is quite an important phenomenon and so the question that is put to the legislator is how can we have good air traffic activity without having the disadvantage of these growing emissions and so we were in the EU looking at the series of measures we can have modernization ATM modernization as it is called the single European sky we can have all kinds of initiatives as as César which are technical measures we want to put in place research and development we can have new standards for aircraft and CO2 standards per aircraft and we apply all these measures and on top of that we have market-based measures because we are fully convinced and that was shown by our analysis if we only are going to go for technical measures we are not going to get there on top of that we have to incentivize businesses and on the market-based measures that is inclusion into the European emissions trading system we were going around and we asked to manufacturers of engines and of aircraft what they would do and to our surprise they said they had lots of technological devices already on the table but there was no incentive to to buy them and so market-based measures could create that incentive and so that was what we were doing but of course we have in Europe a very strong tradition of multilateralism and we would not go out without having talked and talked through the international implications and so we had a full debate in the international civil aviation organization that supported an instrument like emissions trading but said in 2004 that such an instrument like emissions trading would not be developed by the IKO itself but would have to be incorporated into the emission trading scheme that different parties may have so that was a little bit our surprise I have to say in 2004 but we got that out of the assembly and so we were developing our legislation while strongly communicating to the rest of the world and to IKO that we were in favor of global solution we took note of the fact that the assembly said emissions trading can be done provided you are incorporating that into national or regional schemes and that is exactly what we did so other reasons why we went to emissions trading is that of course it has to be very much in line with our international commitments but we have very well known economic benefits coming from emissions trading least cost solutions is not the most it's not the least attractive one of these so you can easily reach a given objective at the least cost you leave it to the economic operator to sort out how the emission reductions is going to be sorted out some air companies are going to rely on biofuels or others may buy modern aircraft or some others may want to renovate their aircraft or may discourage their passengers to take a lot of weighty and bulky stuff with them so we leave that to the airline operators themselves as we do for ETS covered installations in general remarkably was that we went through a quite comprehensive debate with the industry and in 2006 Ayata the International Osset Association of Airlines said that ETS is probably the least cost the most effective way to reduce aviation's climate impacts in Europe so we were preparing that legislation quite quite extensively and so let's look so we did we included the aviation into the EU ETS and so we have that legislation now in place it was proposed in 2006 and it is enforced since 2009 according to European procedures we went through co-decision and the measure was adopted with unanimity in the council and with an overwhelming majority in the European Parliament so the EU member states have to adopt implementing laws and they all did and the emissions monitoring and the reporting started in 2010 and so all was going smooth and well until end of last year when the real deadline came in sight namely that as of 30th of April 2013 allowances must be surrendered as of the 1st of January 2012 and so we got a little bit of a surprise reaction because that was for ourselves strictly speaking legislation done years ago and really an implementing mood so we are as of today a year before April 2013 and the question is where we are as of today what are the costs of the travel that that is caused through the inclusion and EU ETS well you know that the prices on the carbon market are today relatively low some would like to have them higher but that's now besides the point we have relatively low prices and we made all kinds of estimates about what the cost impact per ticket would be and the cost impact is variable between 2 and 12 euros per passenger for a transatlantic flight so I think that's very moderate if you see what a flight costs transatlantic and so this is a modest increase and I think that everybody would agree that the inclusion into ETS is quite cheap quite cost effective and it is to remind you putting a cap on the allowances it is not putting directly attacks forward because that cost related to the allowances could be covered by airline operators in the way they would like to have it so if we compare that to for example passenger fees that a number of European and non-European states are currently implementing I think that the costs are way beyond what the EU ETS may imply so I think we can agree that the impact the economic impact is relatively limited and the impacts on airlines are equally limited now there has been a number of questions even on whether we may not see for airlines exactly the same as we saw with power generators in the first phase of the EU ETS that is that a considerable amount of allowances was given for free and for the airline business that's 85 percent of their average emissions and so they have only to top up the last bit of their allowances to the extent they do not succeed in bringing down their emissions but nevertheless they can calculate true the value of the allowances into the market price and so there has been and there is still a debate about with full profits even an American study done by MIT is saying that perhaps this could even be a case where airlines may make a net revenue we refrain of going into that debate I'm just trying to highlight that the impact the economic impact on airlines is modest and is fully recognized throughout what are the main benefits well we reckon that there will be significant emission savings we reckon that there will be an increased demand for biofuels because the EU ETS is clearly going to act as an incentive and we reckon that we are also going to see an increase in the demand for credits on the carbon market created through the UN system and that are the credits from clean tech projects that are done through the ECDM the clean development mechanism so we can easily assume that quite a considerable amount of the expenses made by airline companies is going to flow back through companies so where is then the real problem and you wonder what the real problem is and one of the problems that I think also the chair was mentioning is the problem of extraterritoriality is the measure extraterritorial in that sense that it it covers things that Europe should not cover extraterritoriality comes from the fact that all aircraft in Europe landing and departing have to pay for their allowances over the whole stretch from the last port they were departing from and the next port they are flying to so that is clearly also outside Europe and hence the extraterritoriality that was taken as a kind of criticism now US airlines went to the court to a London court that transferred the case to the European Court of Justice which is the highest court in Europe and the European Court of Justice ruled that the measure is not extraterritorial because legally speaking it is only the landing and the departing act that triggers the obligation to cover for the for the emissions cost and so that question of extraterritoriality according to our highest court should be out of the question and should be done with however we hear that for example the United States or for example China and India say we do not believe your court and that is where we have a real problem we tell them you know we have the rule of law then then when you have a dispute you go to court as the American Airlines did and the court rules and then you have to to implement what the court is saying so the court was quite clear that extraterritorial the extraterritoriality is not happening and so we are proceeding with the with the implementation of the system so apart from that we have seen quite a number of activities most important to mention are the meetings in Delhi and Moscow that took place end of last year and beginning of this year that are easily dubbed in the international press the coalition of the unwilling because they were not willing to consider inclusion into the ETS scheme and they were making noises about retaliation because they disliked the measure and the that was the negative part of the story the positive part of the story was that they were all speaking in favor of renewing the debate in the IKO context the international civil aviation organization so and we are have always been in favor of such a debate so I think that these meetings were partly bad news and partly good news and the bad news I think that the retaliation measures were listed up with a lot of maze and mites so far no country underline no country has gone for retaliation measures but there is a lot of talk about that in the international press we in the European Commission are following in that very very keenly up we talk to all parties in the world and all relevant countries and so far retaliation confirmed by the Chinese not later than last week where the Chinese have been saying we are not interfering with the commercial decisions that our companies are making and that was referring to the so-called retaliation that could take place for aircraft that was bought with airbus now we have no other choice I think that we have to make sure that the the the law is being respected because that's the duty at least that the commission has on its shoulders once legislation has been adopted the legislation must be implemented but you remind you remember yourself that I was indicating that April 2013 is the first date of surrendering of allowances and so we are supporting very much a continued discussion in the context of IKO and we have a strong belief that between now and April 2013 we have a full year to hammer out the questions that need to be hammered out so we have an open agenda if it is the issue extra territoriality is the issue related to the revenues raised whatever the issue is we are open for a discussion in IKO but we make clear to all our international partners that we have legislation and that we just cannot put our legislation on hold legislation has gone through the normal policy cycle and and has been brought up to the highest court and the court has said there is no problem so unless there is a new fact either a legal fact or a political fact we have no argument in our hands not to implement the legislation but our legislation has two pieces of flexibility given for the commission to operate and the first is that in the event of an international agreement the directive states that we are open to amend the scheme so if we would hope for a moment that we have a window of opportunity of one year for having accelerated discussions in the IKO we are prepared given the outcome of that discussion to amend our legislation in the light of an international agreement and the other element that is foreseen in the legislation through cometology for those who are familiar with our Euro jargon that is that we are covering incoming flights and departing flights and of course if we have an international agreement where everybody takes care of the departing flights there is no longer a need also to cover incoming flights because every departing flight is somewhere somehow an incoming flight so our legislation foresees that through a relatively simple procedure we can drop incoming flights in case we would have an international agreement where all departing flights are taken care of so where are we now as of today as we speak the IKO's president has announced that he is accelerating the activities in the context of IKO and there was an IKO council not more than 10 days ago that adopted a work program on market-based measures in fact on four different options for a market-based measure to be developed ultimately and also the development of a framework within which market-based measures could be developed so what is good to see is that the message has been taken up through multiple pressure our pressure pressure by the Chinese the Indians pressure by the United States and that IKO is now taking on the work and that work is going on at a much more accelerated speed compared to anything we have been seeing so we hope that IKO is going to deliver and that we will have a kind of global arrangements by say the end of the year because we would need the beginning of next year to adapt our legislation and we are fully supportive of that of that meeting of that process we will see a number of meetings because this meeting series that started in Delhi and then took place in Moscow is going to be continued next meeting is going to take place as it seems in Saudi Arabia but we hope that these meetings are going to bring us forward in terms of a constructive a positive agenda because if the process is only about the merits and the demerits of ETS we are not going to advance very much we need a kind of multilateral measure that is going to address the issue so that would be my introduction and I'm open for all possible questions that you may have thank you very much