Aviation In The EU Emissions Trading Scheme

EU: October 27, 2008

European Union governments gave their formal approval on Friday to include aviation in the bloc's emissions trading scheme, they said in a statement.

As a result of the decision, the 27-nation bloc will include aviation from 2012 in the programme, a key tool in its plan to fight climate change.

Aviation generates 3 percent of all carbon dioxide (CO2) emissions in the EU but has been left out of the trading scheme so far due to fears it would damage the industry's ability to compete in international markets.

With global air traffic set to double by 2020, Europe is keen to apply the "polluter pays" principle as it struggles to reduce output of greenhouse gases blamed for global warming.

The European Parliament voted 640 to 30 in July in favour of including airlines in the scheme from 2012, forcing them to cut CO2 emissions by 3 percent in the first year, and by 5 percent from 2013 onwards.

To see a related story, please click on

Below are details of the plan, according to the UK's Department for Transport:

THE PLAN

• All airlines flying into and out of EU airports will be included

• Instead of separate emissions caps for each of the 27 member states, one EU-wide cap will be set based on historical levels

• The 2012 emissions cap to be set at 97 percent of average 2004-06 EU airline emissions

• Proposed cap of 95 percent of average 2004-06 emissions for 2013 onwards, though this is still being discussed under wider EU negotiations

• According to the EU Commission, 2004-06 average emissions were around 218 million tonnes of CO2. They are estimated to be 340 million by 2015, and over 400 million by 2020

• According to DfT, the scheme is likely to affect at least 87 major airlines, 35 of which are headquartered outside the EU.

AVIATION ALLOWANCES (AAs)

• Airlines receive 85 percent of AAs for free from Feb. 2012

• The remaining 15 percent to be auctioned by government shortly thereafter - this may change from 2013 as part of wider EU negotiations

• Every EU member state will hold an AA auction over the course of a few days in mid-2012

• There are no limitations as to who can participate or how many AAs can be bought in any of the 27 auctions

• In the UK, auction revenues will not be earmarked, or 'hypothecated', to fund renewable energy projects or fight climate change

• Airlines can use EUAs, the credits traded under the EU Emissions Trading Scheme (EU ETS), for compliance, but heavy industry participating in the EU ETS cannot use AAs

• Airlines can also use UN-approved offsets (CERs or ERUs), the project-based credits issued under the Kyoto Protocol, to cover 15 percent of their emissions - this may change from 2013 as part of wider EU negotiations

• 3 percent of all AAs will be set aside for new operators and fast-growing airlines, defined as having growth over 18 percent per annum

EXEMPTIONS

• Flights under 5.7 tonnes

• Commercial airlines with emissions less than 10,000 tonnes of CO2 or who fly less than 243 flights into, out of or within the EU within a 4-month period

• System flights related to search and rescue, fire-fighting, humanitarian aid, emergency medical services and checking aircraft

• PSOs (Public Service Obligations) on specific routes between outermost regions or where capacity does not exceed 30,000 seats

• Non-EU heads of state

Source: UK Department for Transport, European Commission (Compiled by Michael Szabo, additional reporting by Pete Harrison; Editing by Anthony Barker)

REUTERS NEWS SERVICE