European Aviation Could Join Climate Emissions Trading Scheme

BRUSSELS, Belgium, September 27, 2005 (ENS) - The European aviation industry could begin to participate in the EU’s Greenhouse Gas Emissions Trading Scheme (ETS) as early as 2008, if a plan presented today by the European Commission is adopted. The plan is aimed at reducing air travel’s growing contribution to climate change.

Airplanes are an increasing source of greenhouse gas emissions that are causing global warming, the Commission said, giving the example of a return flight for two from Amsterdam to the Thai resort of Phuket. The trip produces more of the greenhouse gas carbon dioxide (CO2) than the average new car does in a year.

In a formal Communication, the Commission says the most promising way to tackle aviation emissions is to bring aircraft operators into the EU’s Greenhouse Gas Emissions Trading Scheme (ETS).

The ETS sets an overall cap on greenhouse gas emissions, within which participating operators can buy and sell emission allowances as needed. The Commission sees the market mechanism as a permanent incentive for airlines to minimize their emissions.

The aviation industry is growing and so is the amount of greenhouse gases emitted by aircraft. (Photo courtesy FreeFoto)

Vice President and Commissioner for Transport Jacques Barrot said, “There is a growing consensus in the aviation sector that emissions trading represents the best way forward to cut greenhouse gas emissions.”

Aviation’s share of overall EU greenhouse gas emissions is still modest at about three percent, but its emissions are growing faster than any other sector and risk undermining progress achieved through emission cuts in other areas of the economy, said the Commission.

EU emissions from international flights grew by 73 percent from 1990 to 2003. This increase could widen to 150 percent by 2012 unless action is taken, the Commission estimates.

Such growth would cancel out more than a quarter of the eight percent reduction in total greenhouse gas emissions that the Kyoto Protocol requires the EU-15 to achieve between 1990 and 2012.

CO2 emissions from domestic flights are subject to emission targets under the Kyoto Protocol, but international flights are not.

British Airways today welcomed the European Union's decision to develop proposals to include aviation in the EU emissions trading scheme. The airline believes that emissions trading is the most environmentally effective and economically efficient way to manage carbon dioxide emissions from aviation.

Andrew Sentance, British Airways' chief economist and head of environmental affairs, said, "The EU scheme should provide a practical and realistic way of addressing the climate change impact of carbon dioxide emissions from aviation."

British Airways is willing to participate in the EU’s Greenhouse Gas Emissions Trading Scheme. (Photo courtesy FreeFoto)

But the Commission differs from British Airways on this point. From an environmental point of view, the Commission said today that the ETS should cover all emissions from any flight departing from the EU, whether to another EU destination or a third country. EU and non-EU carriers would be treated equally.

British Airways is the only airline participating in the UK government's trial emissions trading scheme and its domestic flight and property carbon dioxide emissions are down 23 percent compared to a 1998-2000 baseline.

The airline has improved its fuel efficiency by 27 percent since 1990 and, earlier this month, launched a scheme where its customers can volunteer to help to offset the carbon dioxide emissions from their flights.

The European Union's 6th Environmental Action Programme committed the bloc to take specific action to reduce greenhouse gas emissions from aviation if no such measures were taken by the International Civil Aviation Organization (ICAO), the responsible international body, by 2002.

ICAO has not taken such action, but it has endorsed the concept of emissions trading.

In preparing its strategy the Commission examined several other types of market-based solutions, including airline ticket or departure taxes and emissions charges, but concluded that these would be either less effective in environmental terms or less cost-efficient.

Jet trails represent part of the gases emitted by aircraft. (Photo courtesy FreeFoto)

The Greenhouse Gas Emissions Trading Scheme, which currently covers around 11,500 industrial installations, enables participating operators to reduce their CO2 emissions in a cost-effective way.

Each operator receives a limited number of emission allowances, creating a permanent incentive for each to minimize emissions. These allowances can be traded on the market, giving operators the flexibility to choose the cheapest way to control their emissions. Bringing civil aviation into the scheme would allow aircraft operators to benefit from this cost-effective approach, enabling them to trade emission allowances in an expanded market with industrial operators and other airlines as necessary.

As part of its comprehensive approach to the problem, the Commission also advocates continuing or strengthening a range of other activities that can help limit emissions from aviation, such as improving air traffic management and continuing efforts to remove legal obstacles to the taxation of jet fuel.

Preliminary estimates based on modelling exercises suggest that the impact on ticket prices would be modest, ranging between zero and an increase of up to €9 per return flight. With an increase of this level, aviation demand would simply grow at a slightly slower rate than otherwise. Any effect on tourism or peripheral regions relying on aviation is likely to be very limited.

The Commission is inviting the European Parliament and the Council to give detailed responses to the Communication.

In parallel, the Commission will set up an expert working group of Member States and stakeholders under the European Climate Change Programme to consider certain issues in more detail and report back next year.

Then the Commission will present a legislative proposal to revise the ETS. This will be coordinated with the general review of the ETS due in mid-2006. The timing of aviation’s entry into the ETS will depend on how quickly the legislation is adopted and implemented.