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Tuesday, 27 September 2011

Commission sets the rules for allocation of free emission allowances to airlines

The European Commission has taken an important step for the aviation industry to join other economic sectors in the fight against climate change. Aviation will become part of the EU's emissions trading system (EU ETS) from 2012. The European Commission has published the benchmark values which will be used to allocate greenhouse gas emission allowances free of charge to more than 900 aircraft operators.

Climate Action Commissioner Connie Hedegaard said: "With the benchmark values, airlines now have certainty how many allowances they will receive for free each year up to 2020. At current market prices these free allowances represent more than €20 billion over the decade. With these potential revenues, airlines could invest in modernising their fleets, improving fuel efficiency and using non-fossil aviation fuel. As much as the EU prefers global action, we can't defend that the aviation sector is exempted from contributing because they can't agree internationally. This is why the EU decided to take this step forward in 2008 while we will continue to fight for global regulation of aviation like at the next UN climate negotiations in Durban ''

Publication of the benchmark values enables airlines to calculate their free allocation of allowances up to 2020. One benchmark has been calculated for the trading period in 2012 and another for the trading period starting in January 2013. In 2013 to 2020 an airline will receive 0.6422 allowances per 1,000 tonne-kilometres, while in 2012 it will receive 0.6797 allowances.

In the trading period from 1 January 2012 to 31 December 2012, 85% of the aviation allowances will be allocated free of charge to aircraft operators. In the period from 1 January 2013 to 31 December 2020, this will be 82%. 15% of the remaining allowances in each period will be auctioned and in 2013-2020 3% will be set aside in a special reserve for new entrants and fast growing airlines.

Source: European Commission