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European Commission proposes phased increase of emissions permit auctioning for airlines from 2013

European Commission proposes phased increase of emissions permit auctioning for airlines from 2013 | ETS

EU President, José Manuel Barroso, presents climate change proposals
Wed 23 Jan – In a major shake-up of the European Union (EU) Emissions Trading Scheme (ETS), the European Commission has proposed that airlines should have to buy 20% of total allocated emissions permits from 2013, the start of Phase 3 of the EU ETS, rising incrementally each year until 2020, the end of Phase 3, when they will have to auction for the full 100% quota.
 
This follows a vote by the EU Council of Environment Ministers last month that proposed all airlines flying to or from the EU should enter the ETS from 2012 and have to buy 10% of permits up front. In November, the European Parliament voted for a higher figure of 25% and MEPs will have to decide whether it is to accept or fight the proposals of the Council, its co-legislator, and the Commission when the draft legislation returns for a second reading later in the year.
 
NGOs, on the other hand, believe the aviation sector should be treated like Europe’s power industry and not receive any free allowances and should have to auction for the full 100% from the start.
 
Commenting on the Commission’s proposal, João Vieira, Policy Officer of the European Federation for Transport and Environment, said: “Incomprehensibly, the Commission has decided to give the aviation sector the same special treatment as factories, by handing over free emissions permits. But the Commission’s own studies showed that the aviation business can just pass on the costs of permits to customers, and if they don’t get full auctioning from the onset they'll be making massive windfall profits.  Moreover, there are no issues of international competition regarding aviation since all airlines, regardless of nationality, will be subject to the same carbon costs on their European routes.

“It’s even more bizarre when one considers that the electricity business will have to buy all its permits, the justification being that the sector can pass on their costs. There seems to be one rule for electricity production and one rule for aviation, the fastest growing source of carbon emissions in Europe. It’s now up to the European Parliament and the Council to put that right."
 
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