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Design of the EU ETS for aviation
Aviation and EU ETS legislation
 Directive 2008/101/EC
– entered into force on 2 February 2009
 Each Member State transposes the
Directive into national law
 Aviation included in EU ETS from 1 January
Aviation activities covered by EU
 Flights arriving at and departing from EU
 EU ETS covers 30 European States (the EEA)
 Exemptions:
 Small aircraft - of less than 5 700 kg
 State, military, rescue, emergency, VFR,
training flights
 Commercial air transport operators with:
– less than 2 flights per day, or
– less than 10 000 tonnes of CO2 per year
Aviation emissions cap
 Emissions cap
– Baseline:
219.6 Mt CO2 (average annual
emissions of 2004-2006)
– 2012:
cap = 97% of baseline
– 2013-2020: cap = 95% of baseline
 Aviation expands the total EU ETS cap by
approximately 10%
Allocation of allowances
 82% allocated to operators free of charge,
based on a benchmark
 15% allocated by auction
 3% held in reserve for new entrants and fast
growing operators
– distributed in middle of 2013 -2020 trading
period based on tkm activity in 2014
 Allowances can be freely traded
 Aircraft operators can buy and use
allowances from other sectors
 Aircraft operators can use CERs/ERUs:
– 50% of their reduction effort can be met through
– Will not be below 1.5% of verified emissions
Use of auctioning revenues
 Auctioning proceeds should be spent on tackling climate
change in the EU and third countries:
Reduce emissions
Administration of scheme
Global Energy Efficiency and Renewable Energy Fund
Avoiding deforestation in DC
Research and development (mitigation and adaptation in
aeronautics and air transport)
– Low emission transport
 Member States must report how they spend revenues to
the Commission
Timetable for inclusion of aviation in
the EU ETS
 2011
– 31 March: Submission by aircraft operators to States of:
– 2010 verified emissions report; and
– Optional 2010 verified tkm (benchmarking) report
– 30 June: Submission of tkm data by States to the COM
– 30 September: COM decision on the benchmarks for
2012 and 2013-2020
– 30 December: States publish allocations of free
allowances to aircraft operators
Timetable for inclusion of aviation in
the EU ETS
 2012
– 28 February Issuing of free allowances for 2012
– 31 March: Submission by aircraft operators to States of
2011 verified emissions report
 2013
– 28 February: Issuing of free allowances for 2013
– 31 March Submission by aircraft operators to States of
2012 verified emissions report
– 30 April: Surrender of allowances equal to the 2012
Impacts of the EU ETS on aviation
Analysis of the impacts
 The Commission extensively analysed the
impacts of the EU ETS on aviation when
developing the legislation
 A comprehensive impact assessment is
available on our website
 This considers a range of impacts
including environmental and economic
Environmental impacts
 Total CO2 emissions from aviation will continue to
 The emissions cap means that this growth will be
offset by reductions in other sectors or from
projects in other countries
 Compared to a business as usual scenario, by
2020 the EU ETS will result in a annual emissions
reduction of over 190 million tonnes CO2
 Total global aviation CO2 emissions in 2006 were
approximately 750 million tonnes, so this is a
significant saving
Economic impacts
 We examined impacts in 2020 of €30 per
tonne carbon price
 Our modelling showed that:
– Air traffic will continue to grow substantially
– The EU ETS will reduce demand for aviation by
a small amount in 2020 relative to business as
usual forecasts
EU ETS will have a small impact on
Change indemand
aviation demand
(revenue tkm)
2005 = 100
2020 - with EU ETS
2020 - no EU ETS
Impacts on airlines
 Since all airlines will be treated equally,
competition between airlines would not be
significantly affected
 Airlines costs should be passed on to
 Our modelling showed that by 2020 airline
tickets could increase by €4.6 to €39.6
depending on the journey length and
allowance price
Example of impact on ticket
Madrid to Mexico City = 9,060 Km
Flying one way in economy generates 712 Kg of CO2 (ICAO carbon calculator)
At current carbon prices (€17 per tonne), this is €12.
Munich to Cancun = 8,869 Km
Flying one way in economy generates 620 Kg of CO2 (ICAO carbon calculator)
At current carbon prices (€17 per tonne), this is €10.50
These examples assumes full pass through of value of emissions allowance
Lower cost to airlines as 82% of allowances allocated for free
Conclusions on the impacts of
the EU ETS
 EU ETS brings significant environmental
benefits in reducing the net CO2 emissions
from aviation
 Economic modelling suggests that the
system will have little impact on the demand
for aviation
 Based on current and forecast carbon prices
the EU ETS is likely to have limited impact
on the price of air tickets
Measures taken by other countries
Climate measures taken by other
 EU ETS legislation recognises that other
States may decide to implement their own
climate change measures relating to
 Recital 17 and Article 25a of Directive
2008/101/EC are the key provisions
In summary
 Where 3rd country adopts measures to reduce
climate change impact of flights to the EU:
– EU will consider options to provide for optimal
– The Commission may recommend negotiating an
agreement with 3rd country
– The Commission able to adopt amendments to exempt
arriving flights from the scope of the EU ETS
 In case of agreement on global measures, EU will
consider amending Directive as appropriate
Further information
Aviation and climate change
Any questions?