Inclusion of aviation in the EU ETS: Commission publishes historical emissions data on which allocations will be based

7.3.2011
The European Commission has, today, taken an important step in preparing for
the full inclusion of aviation in the EU’s emissions trading system (EU ETS) from
1 January next year. The European Commission has decided on the historical aviation
emissions which will be used to calculate the number of aviation allowances to
be available from 2012.
  [It has been known for a long time that 2004 – 2006 would be used as the baseline,
but just the exact figure was awaited, with the inclusion of more permits to take
account of fuel burned by aircraft while on the ground. This was something the
industry had asked for].

Connie Hedegaard, European Commissioner for Climate Action, said: ”Emissions
from aviation are growing faster than from any other sector, and all forecasts
indicate they will continue to do so under business as usual conditions. Firm
action is needed. By publishing the data on which allocations will be based, we
prepare for the full inclusion of aviation in the emissions trading system.”

The decision on historical aviation emissions of 219,476,343 tonnes of CO2 represents the average of the estimated annual emissions for the years 2004,
2005 and 2006 of all flights that would be covered by the EU ETS performed by
aircraft operators to and from European airports
[By contrast, the rest of society is required to make carbon cuts based on 1990
levels. The aviation industry has been allowed to more than double emissions compared
to 1990, by using the 2004 – 2006 level instead. Again, special treatment given
to this industry.  The UK overall has to make carbon cuts of 80% of the 1990 level
by 2050].
 
Based on this figure for average annual aviation emissions in 2004-2006, the
number of aviation allowances to be created in 2012 amounts to 212,892,052 tonnes
of CO
21, and the number of aviation allowances to be created each year from 2013 onwards
amounts to 208,502,525 tonnes
2 of CO2.

The calculation of historic aviation emissions was based on data from Eurocontrol
– the European Organisation for the Safety of Air Navigation – and actual fuel
consumption information provided by aircraft operators. Additional calculations
were carried out to account for fuel consumption associated with the use of the
auxiliary power units (APUs) on aircraft at airports.

Background

EU emissions from aviation have increased fast – almost doubling since 1990.
It is estimated that one passenger, flying from Brussels to New York and back
in economy class generates in the order of 800 kg of CO
2.

To mitigate the climate impacts of aviation, the EU has decided to impose a cap
on CO
2 emissions from flights operating to and from EU airports. From the start of
2012, some 4,000 aircraft operators arriving and departing in the EU will be covered
by the EU ETS. Like industrial installations, airlines will receive tradable allowances
covering a certain level of CO
2 emissions from their flights per year. Aviation represents around 10% of greenhouse
gas emissions covered by the EU ETS.

The inclusion of aviation in the EU ETS is expected to have only a minor impact on ticket prices. If an airline would charge
customers for the full CO
2 price, with the current carbon prices, the price of an economy class return
ticket from Brussels to New York would rise by some €12

Later this year, as foreseen in the EU ETS Directive3, the Commission will formally determine the amounts of emission allowances to
be auctioned, to be distributed free of charge to aircraft operators and to be
allocated to a special reserve for new entrants.
The EU ETS Directive states that Member States should use all auction revenues
from aviation allowances to tackle climate change, including in the transport
sector, and to adapt to the effects of climate change.
 
 
 
 
See MEMO/11/139for more details.

For the Decision adopted by the Commission today, see:

http://ec.europa.eu/clima/documentation/transport/aviation/index_en.htm

For more information on monitoring, reporting and verification of emissions,
and procedures for aircraft operators and their administering Member States, see

http://ec.europa.eu/clima/policies/transport/aviation/monitoring_en.htm 

and http://ec.europa.eu/clima/policies/transport/aviation/operators_en.htm.

For more information on the EU’s Emission Trading System, see

http://ec.europa.eu/clima/policies/ets/index_en.htm

1 :  97% of the historic aviation emissions figure.

2 :  95% of the historic aviation emissions figure.

3 :  Directive 2003/87/EC, as amended by Directive 2008/101/EC and Directive 2009/29/EC.
 
 
 
 
Just for interest, looking at past UK terminal passenger figures from the CAA
for past years:
http://www.caa.co.uk/docs/80/airport_data/2009Annual/Table_10_3_Terminal_Pax_1999_2009.pdf
  (thousand)
1999   167 619

2000   179 125

2001   180 501

2002   188 031

2003   199 211

2004   214 926

2005   227 416    so all higher than 2010  – average 225,000

2006   234 416

2007   239 968

2008   235 361

2009   218 126

2010   213,714  approx
and before that:
http://www.caa.co.uk/default.aspx?catid=80&pagetype=88&sglid=3&fld=1999Annual
1989   98 913

1990   102 418

1991   95 768

1992   106 123

1993   112 280

1994   122 364

1995   129 586

1996   135 998

1997   146 823

1998   158 997

1999    168 478  (?)

 
 
SEE ALSO
 
 

 

MEMO/11/139

Brussels, 7 March 2011

Questions & Answers on historic aviation emissions and the inclusion of aviation
in the EU’s Emission Trading System (EU ETS)

Why are historic aviation emissions important for aviation’s inclusion in the
EU ETS?

Historic aviation emissions are the basis for calculating the cap on aviation
emissions applied when the sector is included in the EU ETS from January 2012.
Today’s decision by the European Commission publishes the mean average of the
annual emissions for the years 2004, 2005 and 2006 of all flights that would be
covered by the EU ETS performed by air carriers to and from European airports.
Based on this average annual historical aviation emissions for the period 2004-2006,
the number of aviation allowances to be created in 2012 amounts to
212,892,052 tonnes (97% of historic aviation emissions),and the number of aviation allowances to be created each year from 2013 onwards
amounts to
208,502,525tonnes (95% of historic aviation emissions).

How were historic aviation emissions calculated?

The Commission has been assisted by Eurocontrol – the European organisation for
the safety of air navigation. The comprehensive air traffic data contained in
Eurocontrol’s databases from the Central Route Charges Office (CRCO) and the Central
Flow Management Unit (CFMU) were considered the best available data for calculation
of the historic emissions. These provide among other things a calculation of the
actual route length for each individual flight. Emissions were then calculated
on a flight-by-flight basis using the ANCAT 3 (Abatement of Nuisances Caused by
Air Transport) methodology and the CASE (Calculation of Emissions by Selective
Equivalence) methodology.

In addition to Eurocontrol’s data, the Commission also used information on actual
fuel consumption from almost 30 aircraft operators
of different types and sizes. This data was for aircraft types that were responsible
for 93% of emissions in the base years.
 

Thirdly, additional calculations were carried out to account for fuel consumption
associated with the use of the auxiliary power units (APUs). APUs are small engines
that are used to provide lighting and air conditioning when the aircraft is stationary
at airports. They are used when the aircraft is not connected to ground source
electrical power and ventilation services. The approach taken was first to determine
the average APU fuel consumption for different aircraft types. The individual
emission factors of APU fuel consumption were then extrapolated to calculate total
APU emissions applying a process which took into account the actual share of fuel
burn for the flights under the EU ETS of each aircraft type and the use of ground
power in airports. The emissions corresponding to the resulting total APU fuel
consumption were included in the historical aviation emissions for each of the
years 2004, 2005 and 2006.

Why was the 2004-2006 period chosen as a baseline for aviation emissions?

The 2004-06 baseline period is defined in the legislation on the inclusion of
aviation in the EU ETS. The baseline period for aviation allocation under the
EU ETS is different from the 1990 baseline for the EU’s overall reduction commitment
as it takes into account
the significant growth in aviation over the last 15 years.

Why has there been a delay in publishing historic aviation emissions?

This decision has been adopted later than originally foreseen in order to spend
more time collating data on the historic emissions. Additional studies were done
to increase the accuracy of the estimations of historic aviation emissions, in
particular in relation to the fuel used by auxiliary power units (APU). Together
with the support from Eurocontrol and contribution from aviation sector, a methodology
to assess the APU was developed and the fuel consultation by APU was estimated.
This figure was then added to the flight based CO
2emissions.

The subsequent steps foreseen in the implementation of the Directive are to determine
free allocations to aircraft operators and the volume of allowances to be auctioned.

How will allocations per aircraft operator be calculated?

82% of the allowances will be given for free to aircraft operators and 15% of the CO2 allowances are allocated by auctioning. The remaining 3% will
be allocated
to a special reserve for later distribution to fast growing airlines and new
entrants into the market.

The free allowances will be allocated by a benchmarking process which measures
the activity of each operator in 2010 in terms of the number of passengers and
freight that they carry and the total distance travelled. The benchmark should
be published by 30 September 2011.

Member states have agreed that all revenues from auctioning should be used to tackle climate change including
in the transport sector.

Will the cap on aviation emissions be affected by the Icelandic volcanic ash
cloud in 2010?

The events from the Icelandic volcano in 2010 will have no effect whatsoever on the total size of the emissions cap for aviation
under the EU ETS or the total number of allowances that will be allocated free
of charge to aircraft operators.

We have not seen data to suggest that the impact of the ash cloud will have a
material impact on the distribution of free allowances between aircraft operators.
Redistribution might occur if certain airlines had to cancel a greater proportion
of flights then others, while the vast majority of operators have been impacted
by the flight restrictions resulting from the volcanic ash cloud. Indeed all the
estimations that we have seen confirm that distributional impacts are very small.

For the regulator to change or adapt the 2010 benchmarking year for the allocation
of free allowances to aircraft operators, it would require a change in primary
EU legislation. Adopting such legislation usually takes 2 years and there are
no plans to start this process.

Which airlines and routes will be affected by the EU ETS?

The EU ETS will cover any aircraft operator, whether EU- or foreign-based, operating
international flights on routes to, from or between EU airports. All airlines
will thus be treated equally. Very light aircraft will not be covered. Military,
police, customs and rescue flights, flights on state and government business,
and training or testing flights will also be exempted.

To reduce administrative costs, each operator will be administered by a single
Member State regarding emissions from the total of its flights to, from and within
the EU.

The list of aircraft operators that may be covered by the system includes over
4000 operators. The list
has been created with the support of Eurocontrol and was based on actual flight
information; it was last updated in February 2011
to take account of all changes that happened in 2010.

Aviation is an international business – why not conduct emissions trading at
global level?

The EUis the strongest advocate for global action to reduce climate impacts of aviation.
States have not been able to agree on a common global system through either the
United Nations Framework Convention on Climate Change (UNFCCC) or the International
Civil Aviation Organisation (ICAO). In the Resolution on climate change adopted
at its most recent Assembly in October 2010, states in ICAO called for further
work to explore the feasibility of a global market-based measure. The Resolution
also recognized that states may take action prior to 2020. The EU ETS provides
a good model for applying market-based measures to aviation. Development of other
national programmes covering international aviation, compatible with the EU ETS,
are a pragmatic way in which global action can be implemented.

What about the litigation by some US airlines against the EU Directive?

While a number of airlines support action by the EU to address the climate change
impacts from aviation, a challenge to the EU Directive has been launched by a
number of US airlines. This has been referred to the European Court of Justice,
and the European Commission, European Parliament, Council and a number of Member
States have submitted observations, in addition to other organisations intervening
in the case. The airlines involved are complying with the Directive’s requirements
in full pending the resolution of this challenge.

What will the effect be on aviation emissions?

The environmental impact of including aviation in the EU ETS will be significant
because aviation emissions, which are currently growing rapidly, will be capped
at below their average level in 2004-2006. By 2020 it is estimated that a total
of 183 million tonnes of CO
2 will be saved per year on the flights covered, a 46% reduction compared with
business as usual. This is equivalent, for instance, to twice Austria’s annual
greenhouse gas emissions from all sources. Some of these reductions are likely
to be made by airlines themselves. However, participation in the EU system will
also give them other options: buying additional allowances on the market – i.e.
paying other participants to reduce their emissions – or investing in emission-saving
projects carried out under the Kyoto Protocol’s flexible mechanisms. Providing
aviation with these options does not reduce the environmental impact of the proposal
since the climate impact of emission reductions is the same regardless of where
they are made.

Will ticket prices increase?

Including aviation in the EU ETS will not directly affect or regulate air transport
tickets. However, aircraft operators may have to invest in more efficient planes
or buy emission allowances in the market in addition to those allocated to them.
The impact on ticket prices will probably be minor. Assuming airlines fully pass
on these extra costs to customers, by 2020 the ticket price for a return flight
within the EU could rise by between €1.8 and €9. Due to their higher environmental
impact, long-haul trips could increase by somewhat more depending on the journey
length. For example a return flight to New York at current carbon prices of around
€15 might cost an additional €12. However, ticket price increases are in any case
expected to be significantly lower than the extra costs airlines have passed on
to consumers due to world oil price rises in recent years. Including aviation
in the EU ETS will also have a smaller impact on prices than if the same environmental
improvement were to be achieved through other measures such as a fuel tax or an
emissions charge.

How big is EU aviation’s contribution to climate change?

Direct emissions from aviation account for about 3% of the EU’s total greenhouse
gas (GHG) emissions. The large majority of these emissions comes from international
flights, i.e. flights between two Member States or between a Member State and
a non-EU country. This figure does not include indirect warming effects, such
as those from NOx emissions, contrails and cirrus cloud effects.
The overall impact is therefore estimated to be higher. The Intergovernmental Panel on Climate Change (IPCC) has estimated that aviation’s
total impact is about 2 to 4 times higher than the effect of its past CO
2emissions alone. Recent EU research results indicate that this ratio may be somewhat
smaller (around 2 times). None of these estimates take into account the uncertain
but potentially very significant effects of cirrus clouds.

EU emissions from international aviation are increasing fast – doubling since
1990 – as air travel becomes cheaper without its environmental costs being addressed.
For example, someone flying from London to New York and back generates roughly
the same level of emissions as the average person in the EU does by heating their
home for a whole year. Emissions are forecast to continue growing for the foreseeable
future.

Emissions from aviation are higher than from certain entire sectors covered by
the EU ETS, for example refineries and steel production. When aviation joins the
EU ETS it is forecast to be the second largest sector in terms of emissions, second
only to electricity generation.

What are the next steps?

Airlines have been monitoring their emissions during 2010, and are required to
verify and report these emissions to their administering Member States by 31 March
2011. By that same date, airlines may also apply for free allocations of emissions
allowances on the basis of their activities in 2010. Based on information submitted
by the Member States, the European Commission will calculate the benchmark that
will define how many free allowances aircraft operators will receive. This benchmark
decision will be published by 30 September 2011.

By end September the Commission will also publish the emissions cap and the percentages
of allowances to be: auctioned; given for free; and allocated to the special reserve.

Where can I find further information?

Aviation and climate change:

http://ec.europa.eu/clima/policies/transport/aviation/index_en.htm

EU ETS:

http://ec.europa.eu/clima/policies/ets/index_en.htm

See also IP/11/259
Response from Transport & Environment
T&E reaction to European Commission statement on inclusion of aviation in
the European Union Emissions Trading System (EU-ETS)
 

 

7 March 2011,

 
 Brussels – The European Commission has today decided on the historical aviation emissions
which will be used to calculate the number of aviation allowances to be available
from 2012 when the sector is brought into the EU-ETS (1).

 

T&E calculates that the cost to the aviation sector will be the equivalent
of a one-cent per litre tax on aviation fuel which is currently untaxed in the
EU.  The effect on ticket prices, if not inflated by airlines, should be less
than 1 per cent on average.  

 

This negligible impact on fuel costs is in stark contrast to rates of tax for
road transport.  The average level of road fuel tax in the EU is around 48 cents
per litre.  The EU also sets minimum levels for road fuel taxes, currently 36
cents per litre for petrol and 33 cents per litre for diesel.   

 

T&E programme manager Bill Hemmings said: “Aviation, by far the most polluting
transport sector, still operates in a European-wide fuel and VAT tax haven.  Inclusion
of the sector in the EU-ETS is no more than a minor first step.  And it is no
excuse for prolonging the massive subsidy of fuel tax and VAT exemptions.  In
times of fiscal austerity these subsidies are more irresponsible than ever.”
 

For further information: 

Bill Hemmings, Programme Manager

Transport & Environment

bill.hemmings@transportenvironment.org 

+32 487 582706  

www.transportenvironment.org 

Notes to editors:
(1) See Commission press release: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/259&format=HTML&aged=0&language=EN&guiLanguage=en