EC releases benchmark values for aviation industry under ETS

Brussels: The European Commission has published the benchmark values which will be used to allocate greenhouse gas emission allowances for aircraft operators under the inclusion of aviation in the EU's Emissions Trading System (EU ETS) from 2012.

EU has calculated the additional cap for aviation based on the average emissions from the aviation sector over 2004, 2005 and 2006.

In 2012, the aviation emissions cap will be set at 97% of the 2004-06 average aviation emissions and in the period from 2013 to 2020 the cap will be reduced to 95%. In 2012 an airline will receive 0.6797 allowances per 1000 tonne-kilometres, while in 2013 to 2020 it will receive 0.6422 allowances.

In the 2012 trading period, 85% of the aviation allowances will be allocated free of charge to aircraft operators. In the 2013 to 2020 period, this will drop to 82%. Fifteen per cent of the remaining allowances in each period will be auctioned and in 2013-2020 3% will be set aside in a special reserve for new entrants and fast growing airlines.

The European Union's existing cap-and-trade system limits the carbon dioxide emissions of polluters in the bloc by issuing permits for each ton of carbon they can emit. Each company is allowed to emit a set amount of carbon dioxide, beyond which they need to buy extra credits or sell off their credits if they emit less.

Next year, all airlines operating to and from Europe will be brought into the programme, an issue which is currently being challenged around the world by a number of countries, including in court.

EU says airlines would be allowed to pass on to travellers the additional cost of these permits and estimates that in such an eventuality per ticket cost would be 2 to 12 euros ($2.70 to $16.20).

EU's climate action commissioner, Connie Hedegaard, said through a statement: "With the benchmark values, airlines now have certainty how many allowances they will receive for free each year up to 2020. At current market prices these free allowances represent more than EU20 billion over the decade. With these potential revenues, airlines could invest in modernising their fleets, improving fuel efficiency and using non-fossil aviation fuel. As much as the EU prefers global action, we can't defend that the aviation sector is exempted from contributing because they can't agree internationally. This is why the EU decided to take this step forward in 2008 while we will continue to fight for global regulation of aviation at the next UN climate negotiations in Durban."