Airlines and EU emissions trading: the vice tightens

Connie Hedegard EU Commissioner

Airlines will initially get free allowances to cover 85 percent of their emissions and their bill will be calculated after their carbon output has been added up.

To begin the accounting process, the Commission on Monday partly activated its registry to centralize carbon allowance accounts currently held under national registries, pending full activation, which will not take place before June.

"We have jointly taken the decision to partially activate the Union registry based on the assurance that the system is ready from a security and operational point of view," said a letter from the Commission to EU member states.

The effect is that aircraft operators can open accounts in the central EU registry and will then become eligible for free allowances.

At the end of February, they will receive a first tranche of roughly 181 million aviation carbon permits to be handed out in 2012.

The European Commission has partially activated the new Union registry to enable access for aircraft operators.

The partial activation of the Union Registry for airlines is a first step towards the full activation of the Union Registry, which will not take place before June 2012.

Until then, existing national registries remain operational, in particular for allocation and for the completion of compliance activities for stationary installations.

From today onwards, aircraft operators can open accounts in the Union registry.

Aircraft operators with an open account will be able to receive free allocation as determined by their administering Member State.

All aircraft operators covered by the EU ETS have to open an account in the Union registry.
Based on a benchmark published by the Commission in September 2011 Member States calculate the amount of allowances to be allocated for free to each aircraft operator in accordance with the rules set out in the EU ETS Directive.

Aircraft operators will receive the first annual batch of free allowances credited on their registry account by 28 February 2012 or as soon as their account is opened. In total, approximately 181 million aviation allowances will be handed out to airlines for free in 2012.

Aircraft operators covered by the EU ETS will also have to complete a number of steps in the registry to ensure that they comply with the EU ETS.

These include a requirement to enter verified emissions in the registry by 31 March of each year after 2012 (e.g. by 31 March 2013 they will have to ensure that verified emissions for 2012 are entered in the Union registry) and a requirement to surrender by 30 April of each year a sufficient number of aviation allowances, general allowances and/or international credits to cover their emissions from the previous year(s) (e.g. by 30 April 2013 they will have to surrender units covering emissions from 2012).
Aircraft operators will neither be able to transfer their aviation allowances, received on their accounts in the Union Registry, nor to receive general allowances or international credits in the Union Registry before full activation.

In the meantime, aircraft operators who wish to trade general allowances and international credits can open an account in a national registry. Furthermore aircraft operators can enter into futures contracts for the delivery of allowances and units at a future date. After the full activation of the Union registry, aircraft operators will be able to transfer allowances and international credits with other participants in the EU ETS.

For more information, see also: http://ec.europa.eu/clima/policies/ets/registries/index_en.htm

Valere Tjolle
Valere is editor of the Sustainable Tourism Report Suite 2011 Special Offers HERE