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Europe moves a step closer to bringing airlines within the Emissions Trading System

The European Emissions Trading System (ETS) has taken a step closer to incorporating aviation, with the EU announcing the number of permits that will be allocated from 2011 onwards. From 2012 airlines flying into or out of the EU will have to surrender permits to pollute to take account of their CO2 emissions.

The allocation, most of which will be issued to airlines for free, is based on total airline emissions over the period 2004-6: 219 million tonnes per year.  But because aviation emissions have grown since 2006, the allocation will not be large enough to cover present levels of CO2. Airlines will therefore need to purchase extra permits from the carbon market.

While AEF generally supports inclusion of aviation in the ETS, we are concerned that aviation will continue to fail to pay the full cost of the carbon it emits. The ‘cap’ for airlines is far more generous than for other industries, for example, and because cheap permits will be available to buy from environmental projects elsewhere in the world, the growth of aviation emissions in Europe is set to continue. See AEF’s summary of ‘What’s wrong with the ETS?’

For more detail on the recent announcement of the aviation cap, see the press release below from the European Commission.
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IP/11/259

Brussels, 7 March 2011

Inclusion of aviation in the EU ETS: Commission publishes historical emissions data on which allocations will be based

The European Commission has, today, taken an important step in preparing for the full inclusion of aviation in the EU’s emissions trading system (EU ETS) from 1 January next year. The European Commission has decided on the historical aviation emissions which will be used to calculate the number of aviation allowances to be available from 2012.

Connie Hedegaard, European Commissioner for Climate Action, said: ”Emissions from aviation are growing faster than from any other sector, and all forecasts indicate they will continue to do so under business as usual conditions. Firm action is needed. By publishing the data on which allocations will be based, we prepare for the full inclusion of aviation in the emissions trading system. ”

The decision on historical aviation emissions of 219,476,343 tonnes of CO2 represents the average of the estimated annual emissions for the years 2004, 2005 and 2006 of all flights that would be covered by the EU ETS performed by aircraft operators to and from European airports. Based on this figure for average annual aviation emissions in 2004-2006 (95% of historical emissions) and the number of aviation allowances to be created in 2012 amounts to 212,892,052 tonnes of CO2 (97% of historical emissions), and the number of aviation allowances to be created each year from 2013 onwards amounts to 208,502,525 tonnes of CO2.

The calculation of historic aviation emissions was based on data from Eurocontrol – the European Organisation for the Safety of Air Navigation – and actual fuel consumption information provided by aircraft operators. Additional calculations were carried out to account for fuel consumption associated with the use of the auxiliary power units (APUs) on aircraft at airports.

Background

EU emissions from aviation have increased fast – almost doubling since 1990. It is estimated that one passenger, flying from Brussels to New York and back in economy class generates in the order of 800 kg of CO2.

To mitigate the climate impacts of aviation, the EU has decided to impose a cap on CO2 emissions from flights operating to and from EU airports. From the start of 2012, some 4,000 aircraft operators arriving and departing in the EU will be covered by the EU ETS. Like industrial installations, airlines will receive tradable allowances covering a certain level of CO2 emissions from their flights per year. Aviation represents around 10% of greenhouse gas emissions covered by the EU ETS.

The inclusion of aviation in the EU ETS is expected to have only a minor impact on ticket prices. If an airline would charge customers for the full CO2 price, with the current carbon prices, the price of an economy class return ticket from Brussels to New York would rise by some twelve euro.

Later this year, as foreseen in the EU ETS Directive (Directive 2003/87/EC, as amended by Directive 2008/101/EC and Directive 2009/29/EC), the Commission will formally determine the amounts of emission allowances to be auctioned, to be distributed free of charge to aircraft operators and to be allocated to a special reserve for new entrants. The EU ETS Directive states that Member States should use all auction revenues from aviation allowances to tackle climate change, including in the transport sector, and to adapt to the effects of climate change.

See MEMO/11/139 for more details.

For the Decision adopted by the Commission today, see:

http://ec.europa.eu/clima/documentation/transport/aviation/index_en.htm <http://ec.europa.eu/clima/documentation/transport/aviation/index_en.htm>

For more information on monitoring, reporting and verification of emissions, and procedures for aircraft operators and their administering Member States, see

http://ec.europa.eu/clima/policies/transport/aviation/monitoring_en.htm <http://ec.europa.eu/clima/policies/transport/aviation/monitoring_en.htm>

and http://ec.europa.eu/clima/policies/transport/aviation/operators_en.htm <http://ec.europa.eu/clima/policies/transport/aviation/operators_en.htm> .

For more information on the EU’s Emission Trading System, see

http://ec.europa.eu/clima/policies/ets/index_en.htm <http://ec.europa.eu/clima/policies/ets/index_en.htm>