Airlines Prepare for EU Carbon Trading Scheme

A European Union directive incorporating aviation into the EU emissions trading scheme (EU ETS) comes into force today.  EU member states have one year to transpose the directive into national law in time to permit airlines to begin trading in 2012.

Under the scheme, which was bitterly opposed by the airline industry, all flights landing at or taking off from EU airports will have to buy CO2 allowances under the bloc’s cap-and-trade system under the new directive.  Each carrier operating flights to or from the EU must submit a plan describing how it intends to monitor and report on emissions.

The directive aims to cap greenhouse gas emissions from the aviation sector to 3% below the 2004-2006 levels in 2012, increasing to 5% for the period 2013-2020. Airlines will consequently have to purchase 15% of their allowances via auctions. The EU says auctioning revenues should be used to combat climate change at home and in the developing world, but eventually this is left to the discretion of individual member states.

The legislation was endorsed by EU justice ministers in October 2008, despite strong criticism from airlines who maintained the global economic downturn warranted a reconsideration of carbon trading for the sector because it could compromise the industry’s already perilous hold on profitability.

The Commission insists that including aviation in the scheme is essential if the bloc is to attain its climate goals. Environment Commissioner Stavros Dimas called on the sector to make a “fair” contribution to the effort, as greenhouse gas emissions are increasing faster in international air transport than any other sector in the EU.

The EU has pledged to increase its emissions reduction target to 30% in 2020 in the event that a new international climate agreement commits other industrialized nations to similar measures. Speaking in December 2008, Dimas said aviation should therefore also play its part, claiming that the sector’s growth is not currently sustainable.

“By including aviation in the EU ETS, the EU is demonstrating leadership in addressing emissions from aviation, but we are also underlining our openness to continue a dialogue towards a global scheme. As is expressly recognized in the legislation, our ultimate goal is to get an effective global agreement to reduce emissions from aviation, and for this reason we are advocating the inclusion of emissions from aviation in the agreement to be reached in Copenhagen,” the commissioner said.

Last week the European Commission made public its draft proposals for a successor to the Kyoto pact.  “Emissions from international aviation and maritime transport should be included in the overall targets set in the Copenhagen agreement and included in the national totals of the country of departure (or arrival),” said the draft.

More on this topic see: Aviation and Emissions Trading

For More Information: EurActiv

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