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Flights to and from EU airports will be subject to the EUETS from January 2012. A progressive cap will be introduced starting at 97% of 2012 levels dropping to 95% from 2013-2020. Savings are forecast of some 190mt of C02 annually from inclusion of Aviation.

Some 48% of worldwide aviation emissions are covered by the EUETS totalling 744mt of C02

Some 82% of the cap will be allocated to operators, with 15% allocation by Auction and 3% held in reserve for fast growing operators.

Kyoto instruments such as CDM credits called CER’s and ERU, emissions reduction units both from projects in other developing and developed countries respectively are permitted to cover up to 50% of the reduction efforts. Some 1.3bn tonnes of these credits are expected to be sold in the EUTS from 2008-2012.

In real terms the emissions charge is expected to add between 5 and 40 Euro per ticket depending on the distance travelled.

Initiatives pioneered by the likes of Air New Zealand in flight profiles and advances in air traffic management are expected to be adopted to in part deal with these caps.

Pilot programs modeling emissions in the aviation sector have been completed recently.

The objective of the pilot and ongoing program is as follows:-

Modeling emission profiles

* By engine model

* Operational profile

Initially C02 focused

Move to NOx focus

Operational considerations

Participation and information sharing

Domestic and international implications

Expected to be 25% of UK emissions by 2030

Planned integration into the EU TS by 2008

 

 

 

 

 

Source: Demand forecast 714mt Source: ICP Report Feb 2006 www.defra.gov.uk

 

Impact of EUTS on Airlines

EU policy calls for including Aviation in the EU trading scheme by 2008.

You may ask yourself why?

Domestic aviation is already included in Kyoto in Annex B. countries cap so why the extension?

Recent EU commissioned analysis papers indicate that the EU intends to regulate in bound and out bound aviation as well as the domestic obligation.

What does this mean?

It means that ANY airline from ANY country destined for the EU will be subject to an emissions mitigation requirement on that flight.

Three examples could be:

1. A US carrier comes from the USA (not a ratifier of Kyoto) and lands at Heathrow.

EU would expect that the flight would be regulated. When the plane leaves a similar obligation would exist.

2. A carrier from a non Annex B country flies into Paris France.

EU would expect that the flight would be regulated. When the plane leaves a similar obligation would exist.

3. A carrier from an Annex B country that has ratified Kyoto flies into Frankfurt Germany.

EU would expect that the flight would be regulated. When the plane leaves a similar obligation would exist.

Despite the fact that Kyoto excludes international aviation EU still intends to regulate.

No wonder the interest from airlines in the recent emissions pilot scheme (Carbon Monitor April 2006)