Aviation emissions covered by the EU ETS edge higher in 2014 to over 54 MtCO2 as emissions from other sectors fall
Fri 17 Apr 2015 – Preliminary data released by the European Commission shows aviation emissions covered by the EU Emissions Trading Scheme (EU ETS) are likely to have increased by 2.6% in 2014 compared to 2013. Analysis by Carbon Market Data (CMD) of the verified emissions reports submitted by the March 31 deadline indicates aircraft operators conducting intra-EEA flights emitted 54.36 million tonnes of CO2 in 2014, compared to nearly 53 MtCO2 in 2013. Once all the emissions are finally reported and entered in the registry, emissions in 2014 are likely to reach around 54.7 MtCO2, estimates CMD. However, this is far lower than the 84 MtCO2 reported in 2012. Since then, the number of aircraft operators covered by the scheme has almost halved as a result of changes to the scope of the scheme a year ago. In the EU ETS as a whole, emissions fell by around 4.6% in 2014 to an estimated 1,809 MtCO2, said CMD.
Due to the changes to the Directive a year ago following an agreement between the EU institutions to continue with a reduced scope until the end of 2016 to enable the development of a global scheme, a decision was made to allow aircraft operators to defer reporting of their 2013 emissions for a year. The extra burden of reporting both 2013 and 2014 emissions by the March 31 deadline has resulted in not all operators meeting the requirement.
According to Brussels-based CMD, in 2012 1,178 aircraft operators then participating in the EU ETS reported their emissions. As a result of many smaller business aircraft operators being taken out of the scheme following the changes, the Commission estimates around 600 operators are now participating during the 2013-2016 period. Additionally in 2012, a number of airlines, including some based outside the EU, may have taken a one-off opportunity to report full-scope emissions for that year in order to take financial advantage of their free allocation of allowances.
As of last week, CMD calculates 429 operators have reported their emissions for 2013 and 410 operators similarly for 2014. The emissions data is collected from entries in the EU Transaction Log and although the deadline has passed, new data is still being added. Some operators, for example, have entered verified emissions for 2013 but not yet for 2014.
The next important deadline is April 30, when operators must surrender the required number of allowances to cover their emissions for both 2013 and 2014.
CMD analysis shows that low-cost carrier Ryanair was by far the highest emitter on routes within the European Economic Area, racking up over 6.6 million tonnes of CO2 (see table below). In 2013, it was followed by Lufthansa (4.4 MtCO2), which in turn was overtaken in 2014 by easyJet (4.5 MtCO2). Lufthansa’s reported emissions fell to just under 4 MtCO2 in 2014, a drop of around 10%.
The table of top 15 emitters shows Thomson Airways may have made a financial gain of around €150,000 ($160,000), based on current carbon market prices, from the scheme as a result of the free allowances it has been allocated for 2013 and 2014 exceeding reported emissions for both years.
The fall in emissions in 2014 from the previous year in the EU ETS as a whole means the scheme has reached its target of emissions falling below 1,816 MtCO2 by 2020 six years year ahead of schedule, says climate campaign and research group Sandbag. However, this has also led to a huge surplus of allowances in the system that is continuing to grow and moves to find a political agreement to fix the problem have been slow. In late February, the European Parliament’s environment committee (ENVI) adopted a revised proposal to establish a Market Stability Reserve (MSR), a mechanism designed to automatically regulate the supply of allowances in the system. An agreement between the EU institutions on a start date is still under discussion.
Carbon Market Data (more data on the Aviation EU ETS is available after free registration)