Commission proposes to include aviation in EU ETS

Following its Communication in September 2005 on reducing the Climate Change Impact of Aviation, the Commission recently published a Proposal for a Directive to include aviation in the EU Emissions Trading Scheme.

Under the proposed Directive, flights between EU airports would be covered under the Scheme as from 1 January 2011 and all flights arriving at or departing from EU airports would be covered as of 1 January 2012.

The broad structure proposed is as follows:

• aircraft operators will be responsible for complying with the obligations imposed by the Scheme, including the monitoring and reporting of emissions as from 2010.
• each aircraft operator will be administered by one member state only.
• the method of allocating allowances to the aviation sector will be harmonised across the EU to avoid competition distortion issues.
• the total number of allowances to be allocated to the aviation sector will be calculated at Community level by reference to average emissions from aviation in the years 2004 to 2006.
• a fixed percentage of the total quantity of allowances will be allocated free of charge on the basis of a benchmark to aircraft operators which make an application.
• aircraft operators will be allowed to use project credits arising under the Joint Implementation or Clean Development Mechanisms to comply with their obligations under the Scheme, subject to prescribed limits.
• domestic aviation will be included in the Scheme and treated in the same way as international aviation.

The proposed Directive has now been referred to the European Parliament and the Council of Ministers for discussion and adoption under the co-decision procedure which may take from 1 to 2 years.