Environment and Natural Resources Programme • Volume 8 • Number 13 • 11th July 2008

Europe Includes Aviation in Emissions Trading Scheme

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On 9 June, the European Parliament and Council approved a provisional deal between EU governments and lawmakers to include carbon dioxide emissions produced by aviation in the Emission Trading Scheme (ETS). Starting from 1 January 2012, aviation will be included in the ETS. This deal is part of the overall EU strategy on climate change and energy (see Bridges Trade BioRes, 25 January 2008, http://www.ictsd.org/biores/08-01-25/story1.htm).

The new agreement concerns flights taking off from or landing in Europe and includes both EU and non-EU airlines. Emissions will be counted from commercial flights as well as from government flights. Excluded from the scheme are light planes with a take-off weight under 5,7 tonnes, UN-approved humanitarian flights, emergency flights, flights by police, customs or military forces, research flights and flights by small, low-emission (10, 000 tonnes per year) airlines.

Industries included in the ETS have to buy and sell permits that allow them to emit carbon dioxide into the atmosphere. Every tonne of CO2 produced by aircraft going into or out of Europe will need to be matched by a permit. Airlines exceeding their allocation will need to buy a proportion of their permits from sectors that have reduced their emissions or from accredited projects in countries outside Europe that are working to offset carbon emissions.

Eighty-five percent of emissions certificates for aviation will be allocated for free according to a common European benchmark and the remaining fifteen percent will be auctioned. Environmental organisations criticised the high percentage of free certificates. Aviation now accounts for three percent of all C02 emissions within the EU, but air traffic is set to double by 2020.

Airlines operating inside the EU are worried that their ability to compete on the international market will suffer as a consequence of the new agreement, especially in light of concurrently rising fuel costs. The European Commission predicts an increase of EUR4.60 to EUR39.60 for customers on return flight tickets by the year 2020, depending on the length of the flight. The International Aviation Organisation (ICAO), a UN agency coordinating and regulating international air travel, does not support the EU’s move to impose ETS rules onto non-EU airlines landing in Europe, preferring a global approach to stemming greenhouse gases from the aviation sector. Disagreement over the issue has already caused friction in the past (Bridges Trade BioRes, 5 October 2007, http://www.ictsd.org/biores/07-10-05/story1.htm).

Aviation emissions were excluded from the 1997 Kyoto Protocol. Parties to the Kyoto Protocol simply agreed that greenhouse gas emissions from international aviation should be limited or reduced. Responsibility regarding aviation has been largely given over to the ICAO. In the ten years following the Kyoto Protocol, emissions from aviation grew faster than those generated by any other mode of transport.

“EU Includes Aviation in C02 Curbs”, AIRPORTWATCH, 9 July 2008; “T&E Reaction to EU Aviation Emissions Trading Agreement”, T&E, 26 June 2008; “EU Lawmakers Confirm Deal on Airline C02 Emissions”, REUTERS, 30 June 2008; “EU Lawmakers Approve Deal on C02 Emissions”, REUTERS, 9 July 2008; “Europe Approves Imposition of ETS Beginning in 2012”, ATW DAILY NEWS, 9 July 2008; “Airlines Get an Easy Ride in EU Climate Deal”, AIRPORTWATCH, 8 July 2008.