EU issues aviation carbon trading rules

The European Commission (EC) published an initial blueprint of how it envisages aviation being included in the EU emissions trading scheme (ETS) last week, detailing plans that would see each member state allocated a number of airlines from which to collect payments for emission allowances.

Aviation and shipping are not currently included in the ETS, but under legislation agreed late last year, they are to be included in the scheme from 2012 and will have to comply with a cap on their emissions or buy extra carbon allowances to cover excess emissions, just like other European heavy industries. They will also have to buy a chunk of the allowances they require each year at auction, providing them with an additional financial incentive to cut emissions and enhance fuel efficiency wherever possible.

Under the new rules, countries would take responsibility for administering their native airlines' involvement in the scheme, as well as the international airlines that fly to their country the most.

The UK would oversee about 780 carriers and operators including American Airlines and United Airlines, as well as private flights operated by US companies such as Wal-Mart and Bechtel, according to the an initial assessment, undertaken for the EU by air traffic association Eurocontrol.

France would oversee about 515 carriers and operators including Air Algerie, All Nippon Airways, Coca-Cola and United Technologies.

Germany would have to manage 290 airlines' involvement in the scheme, including Delta Air Lines and Aeroflot, as well as General Motors and UPS.

In contrast, Latvia would oversee only five carriers and operators, while Poland would oversee about 45 carriers.

The EC will update the list each year by 1 February to include aircraft operators that have subsequently performed an aviation activity as defined in the legislation.

A statement from the EC accompanying the list insisted it was vital that aviation be included in the scheme if the EU is to cut overall greenhouse gas emissions.

"Air transport plays a major role in the EU economy, but while the EU's total greenhouse gas emissions are falling, aviation's share of overall EU-greenhouse gas emissions is growing faster than any other sector and risks undermining the progress achieved through emission cuts in other sectors," it said.

However, the new rules are likely to face intense opposition from some international airlines who have signalled that they will take legal action to block legislation that they regard as being in breach of international competition laws.

A coalition of US airlines is currently preparing a legal case against their inclusion in the ETS that will claim the EU does not have jurisdiction over international air space.

It remains to be seen if their efforts to block the legislation will be supported by the US government. The Bush administration had warned that the initiative could run counter to the convention governing international civil aviation, but EU officials decided to push ahead with the scheme because presidential candidates Barack Obama and John McCain both supported an emissions trading scheme for the US.