European Commission Proposes Bringing Air Transport into Emissions Trading Scheme
20 December 2006
The European Commission today proposed legislation to bring greenhouse gas emissions from civil aviation into the EU Emissions Trading Scheme (EU ETS).
Emissions from aviation currently account for about 3% of total EU greenhouse gas emissions, but they are increasing faster than any other sector—by 87% since 1990—as air travel becomes cheaper without its environmental costs being addressed.
Without action, the growth in emissions from flights from EU airports will by 2012 cancel out more than a quarter of the 8% emission reduction the EU-15 must achieve to reach its Kyoto Protocol target. By 2020, aviation emissions are likely to more than double from present levels.
The proposed directive will cover emissions from flights within the EU from 2011 and all flights to and from EU airports from 2012. Both EU and foreign aircraft operators would be covered.
The EC estimates that by 2020, CO2 savings of as much as 46%, or 183 million tonnes, could be achieved each year—equivalent for example to twice Austria’s annual greenhouse gas emissions from all sources—compared with business as usual.
Aviation too should make a fair contribution to our efforts to cut greenhouse gas emissions. The Commission will continue to work with our international partners to promote the objectives of a global agreement on aviation. Bringing aviation emissions into the EU Emissions Trading Scheme is a cost-effective solution that is good for the environment and treats all airlines equally.—Stavros Dimas, EC Environment Commissioner
While emissions from domestic flights are covered by the Kyoto Protocol targets, international aviation is not. Moreover, jet fuel for international flights has historically been exempted from taxation. Bilateral air agreements between EU Member States and third countries are being changed to allow this possibility, but this will take time to implement.
The EC said that including civil aviation in the EU ETS is a cost-effective way for the sector to control its emissions and implements an approach endorsed by the International Civil Aviation Organization (ICAO).
Like the industrial companies already covered by the EU ETS, airlines will be able to sell surplus allowances if they reduce their emissions and will need to buy additional allowances if their emissions grow. Any increase in ticket costs resulting from the scheme is expected to be limited, and significantly lower than rises due to oil price changes in recent years.
To limit the rapid growth in aviation emissions, the total number of emission allowances available will be capped at the average emissions level in 2004-2006. Some allowances will be auctioned by Member States but the overwhelming majority will be issued for free on the basis of a harmonized efficiency benchmark reflecting each operator’s historical share of traffic.
To reduce administrative costs, very light aircraft will not be covered, and each operator will be administered by only one Member State.
The directive is part of a comprehensive approach to addressing aviation emissions which also includes more research into greener technologies and improvements in air traffic management.
Airlines can reduce their emissions in several ways, notably by investing in more efficient aircraft and engines and by optimizing operations. Although the biggest improvements typically arise from accelerated fleet renewal, many aircraft in the current fleets also hold potential for improvements.
Some aircraft can be retrofitted with technical devices at the tip of the wings (winglets), new surface treatments that reduce drag (air resistance) and new engines. Airlines can also optimize their timetables, route network and flight frequencies to minimize the number of empty seats flown.
ICAO has published a catalogue of “Operational Opportunities to Minimize Fuel Use and Reduce Emissions” which describes some of these opportunities. In the longer term, research into more efficient technologies and alternative fuels may provide additional opportunities.
Assuming airlines fully pass on any extra costs to customers, by 2020 the price of a typical return flight within the EU could rise by between €1.8 and €9. Long-haul trips could increase by somewhat more depending on the exact journey length, due to their higher environmental impact. Nevertheless, ticket price increases are in any case expected to be significantly lower than the extra costs passed on to consumers due to world oil price increases in recent years.
The proposed directive now goes to the European Parliament and the Council of Ministers for discussion and adoption under the co-decision procedure, which typically takes 1-2 years. Meanwhile, the Commission and the EU Member States will continue to work with other countries through the UN Framework Convention on Climate Change and ICAO to pave the way for wider implementation of measures to reduce the climate change impact of aviation.
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