MR MIKE TOMS, MR STEPHEN HARDWICK AND MR MATTHEW GORMAN

8 DECEMBER 2004

  Q205 Chairman: Good afternoon and welcome. Thank you for coming along. Could I begin by asking you some specific questions about your participation in phase 1 of the EU emissions trading scheme. What sector does BAA fall under?

  Mr Toms: Our role in the emissions schemes is in two parts—and I will ask my colleagues to add on the technical side, not being the greatest technical expert. First, as a generator in our own right, power generator, where we participate in the scheme by virtue of our generation plants at Heathrow and Gatwick North and South Terminals, which are heating and chilling plants, all of which will require credits under the scheme. Secondly, we should participate separately and indirectly through the broader aviation community which will have to participate, as Dr Sentence has demonstrated, through their own organisations.

  Q206 Chairman: How many installations do you have? Is it just Heathrow, Gatwick and Stansted?

  Mr Toms: Those are the only three.

  Q207 Chairman: Three installations are going to be participating in the emissions trading scheme.

  Mr Toms: That is correct.

  Q208 Chairman: What proportion of your total carbon emissions do those three installations account for?

  Mr Toms: I would not have a precise percentage, but I could get back to you on that. It would be a significant amount.

  Q209 Chairman: It would be helpful to have not only the proportion but also the absolute figures as well.

  Mr Gorman: Yes, I could certainly come back on that.

  Mr Toms: They are the largest by a margin.

  Mr Gorman: Yes.

  Mr Hardwick: Could I add, Chairman: they are installations which exceed 20 megawatts of power generation under the EU ETS, and that is why we have three of them. We have a fourth at Terminal 5, which we will be registering in the coming year or so, coming into force in 2008 when we open Terminal 5.

  Q210 Chairman: If you do not have this information with you, forgive me, but it would be helpful to have it: what targets have been set for each of these installations—or perhaps you could give us a global figure?

  Mr Toms: We do not yet have the final allocations for this year, as I suspect you probably know, so we are still unsure what the precise number will be. But I can tell you that by virtue of our own policies towards a reduction of our emissions—which have been partly driven by the prospect of an emissions trading scheme, I have to say—we are hopeful that we will fall within any allowance which we are given.

  Q211 Chairman: Your own policy being to reduce CO2 emissions across the board by 15%.

  Mr Toms: Fifteen% from 1990 to 2010, which, expressed in terms of passenger numbers, because passenger numbers have been growing, is a policy effectively reducing our emissions per passenger by around 50% over that period.

  Q212 Chairman: You would expect your allocation to be broadly in line with that internal target.

  Mr Toms: Indeed.

  Q213 Chairman: In which case, is it not business as usual?

  Mr Toms: It is not business as usual because it is the prospect of an emissions trading scheme and our own policies towards responsible growth which have driven us towards having a target of this kind. Business as usual, in which we did nothing, would not have produced the reductions at which we are now looking.

  Q214 Chairman: Which is interesting, because it means that the emissions trading scheme itself is less important than the threat of an emissions trading scheme. What do you expect the scheme itself to achieve over and above what you have already set yourselves as a result of anticipating the scheme?

  Mr Toms: I think you are absolutely right: the threat of a scheme is a highly powerful incentive but the scheme itself is a continuing device to keep our feet to the fire, bearing in mind that we would anticipate, over phase 2 of any scheme, that the ratchet will be raised, it will continue to incentivise us highly to minimise our emissions.

  Q215 Joan Walley: Could I follow on from that—and in a way my series of questions is linked to those which I asked previously to British Airways. You have set out in your own evidence that you are in favour not only of incorporating aviation within the European scheme but also incorporating all its global warming impacts at least from 2013. As a matter of interest, would you favour extending that to road transport as well?

  Mr Toms: In principle, those who admit should be in the scheme, but capturing the emissions of very large numbers of individual vehicles of course is a different order of complexity process.

  Q216 Joan Walley: I am not clear what you mean by that.

  Mr Toms: I mean essentially that it would be nice but it would be difficult.

  Q217 Chairman: When calculating your gross carbon emissions do you take into account road transport or other transport which is generated by the existence of the airports?

  Mr Toms: We approximate as best we can our emissions from carbon dioxide from our road vehicles. But of course they are not captured by the ETS.

  Q218 Chairman: This is from you road vehicles.

  Mr Toms: Our road vehicles.

  Q219 Chairman: Your own ones rather than the travelling public.

  Mr Toms: If I may just develop that for a second, as part of our responsible growth policy we are highly focused on the fact that we do emit from our road vehicles and we have a major clean vehicles programme to improve the emissions characteristics of our vehicles. In addition to that, we run the largest car sharing scheme, I think of any organisation in Europe, to get people off the roads and to emit less.