Greenhouse gas emission allowance trading and aviation

Taking into account the scale and global nature of the aviation industry and its impact on the environment, the EU takes action to reduce greenhouse gas (GHG) emissions caused by aviation in Europe, whilst working with the international community through the International Civil Aviation Organisation (ICAO) to establish measures with a global reach.

ACT

Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community

SUMMARY

WHAT DOES THIS DIRECTIVE DO?

This directive amends Directive 2003/87/EC, which set up the EU emissions trading system (EU ETS), by factoring in carbon dioxide emissions caused by aviation activity. As a result, all flights to, from and within all EU countries and Norway, Iceland and Liechtenstein are covered under the EU ETS.

KEY POINTS

• 95 % of the average emissions over the 2004-2006 period is set as the annual cap* for aviation emissions for the period from 2013 to 2020.
• The directive applies to EU and non-EU airlines alike, which receive tradable allowances covering a certain level of CO₂ emissions from their flights per year.
• 377/2013/EU retroactively exempted the EU ETS requirements for flights to and from non-EEA countries in 2012 to allow time for negotiations with the ICAO towards a global market-based measure (MBM) for aviation emissions.
• The legislation was amended for the 2013-2016 period under Regulation (EU) No 421/2014. This means that only flights within the EU, Norway, Iceland and Liechtenstein are covered under the EU ETS, pending the outcome of negotiations in ICAO for a global MBM to be agreed by 2016 and to be applied by 2020.

BACKGROUND

Aviation is one of the fastest-growing sources of GHG emissions globally (and in the EU), accounting for roughly 3 % of total emissions. It is expected that, by 2020, the amount of GHGs released by aviation will be 70 % higher than in 2005, even after taking into account improved fuel efficiency.

KEY TERMS

The EU ETS is the cornerstone of the EU’s policy to combat climate change and its key tool for reducing industrial GHG emissions cost-effectively. The first - and still by far the biggest - international system for trading GHG emission allowances, the EU ETS covers more than 11 000 power stations and industrial plants in the 28 EU countries (1), Iceland, Norway and Liechtenstein, as well as emissions from aviation.

The EU ETS works on the ‘cap and trade’ principle. A ‘cap’, or limit, is set on the total amount of certain GHG that can be emitted by the factories, power plants and other installations in the system. The cap is reduced over time so that total emissions fall. The system allows the trading of emission allowances so that the total emissions of the installations and aircraft operators stays within the cap and the least-cost measures can be taken up to reduce emissions.

For more information, see reducing emissions from aviation on the European Commission’s website.

RELATED ACTS

Decision No 377/2013/EU of the European Parliament and of the Council of 24 April 2013 derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community (Official Journal L 113 of 25.4.2013, pp. 1-4).

Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (Official Journal L 129 of 30.4.2014, pp. 1-4).

last update 23.07.2015

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(1) The United Kingdom withdraws from the European Union and becomes a third country (non-EU country) as of 1 February 2020.