Domestic flights and flights to European countries now covered by UK ETS (replacing EU ETS)
Having left the EU, there is now a UK Emissions Trading Scheme (ETS) and aviation will be covered in that, in the same way as it was in the EU ETS. So only applies to flights within the UK, or any flight within Europe (the countries that are the EEA). In response to a question in Parliament by Ben Bradshaw (Labour), Anne-Marie Trevelyan, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth) said: “The UK ETS initially covers around one third of UK greenhouse gas emissions, and applies to the power sector, heavy industry, domestic aviation, and flights from the UK to the European Economic Area. We recognise that meeting Net Zero will require us to build on this ambition. That is why in the next 9 months we will consult on how to align the UK ETS cap with an appropriate net zero trajectory. The cap will provide certainty about the UK’s decarbonisation trajectory over the long-term … We are also committed to explore expanding the UK ETS and will set out our aspirations to continue to lead the world on carbon pricing in the run up to COP26.”
Anne-Marie Trevelyan Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)
The Government is committed to carbon pricing as a tool to meet our ambitious emissions reductions targets. In the Energy White Paper we announced that a UK Emissions Trading Scheme (UK ETS) would be the UK’s carbon pricing policy from 1 January 2021. The UK ETS initially covers around one third of UK greenhouse gas emissions, and applies to the power sector, heavy industry, domestic aviation, and flights from the UK to the European Economic Area.
We recognise that meeting Net Zero will require us to build on this ambition. That is why in the next 9 months we will consult on how to align the UK ETS cap with an appropriate net zero trajectory. The cap will provide certainty about the UK’s decarbonisation trajectory over the long-term, giving businesses the confidence to mobilise the scale of capital investment necessary to deploy clean energy technologies.
We are also committed to explore expanding the UK ETS and will set out our aspirations to continue to lead the world on carbon pricing in the run up to COP26.
A UK Emissions Trading Scheme (UK ETS) replaced the UK’s participation in the EU ETS on 1 January 2021. The 4 governments of the UK have established the scheme to increase the climate ambition of the UK’s carbon pricing policy, whilst also protecting the competitiveness of UK businesses.
This guidance explains who the UK ETS applies to and what is required of businesses that are covered.
Participants in the EU Emissions Trading System (EU ETS) must still comply with their obligations under that system for the 2020 compliance year. For more information, see guidance on EU ETS obligations in 2021.
An airline has to take part in the ETS if it emits more than “25,000 tonnes of carbon dioxide per year from full scope flights” (ie. in the UK or in Europe, as above).
Complying with the UK Emissions Trading Scheme (UK ETS) as an aircraft operator
[The EEA includes EU countries and also Iceland, Liechtenstein and Norway.]
Aviation activity is a flight (other than an excluded flight) that departs from an aerodrome situated in the UK and arrives in an aerodrome situated in any of the following:
- the UK
- an EEA State (excluding outermost regions)
- an offshore structure in the UK structure of the continental shelf
- an offshore structure in the continental shelf of an EEA state
An aviation activity also includes any flight arriving in an aerodrome situated in the United Kingdom from an aerodrome situated in Gibraltar.
UK Government undecided on how to price carbon after leaving the EU ETS
Until the end of December 2020, the carbon emissions from key sectors of the UK economy come under the European Emissions Trading System (ETS). From January 2021, a new system has to be put in place. The options are either for the UK to have its own ETS, or alternatively to tax carbon. The Treasury is keen on the economy-wide carbon tax. The BEIS is keen on a new ETS. There might also be a hybrid scheme. A decision is expected by early December, but this lack of charity is very late for business etc that need to plan now for what they will be doing in 2021. Some companies would end up paying less with an ETS than with a carbon tax, if the price of carbon allowances is too low. The current EU ETS carbon price is about £24 per tonne, but the UK ETS price could be around £15. Within the EU ETS, only flights within the EU are included – not flights outside Europe, so the scope is very limited. It is important that aviation pays tax on its carbon, and it is also important that the system is in place from January 2021, not a year or two later. The Aviation Environment Federation says: “In the event that the UK does not develop its own emissions trading system, there is a risk that UK aviation will not be subject to any carbon pricing from 1 January 2020. This would be a backward step, and send the wrong message…”
T&E: Why Europe should focus on its own airline carbon market and forget the UN scheme
Transport & Environment argues why Europe should not depend on the inadequate, ineffective CORSIA scheme, for its aviation CO2 emissions. CORSIA does not include an actual emissions reduction target. It is at odds with the Paris agreement’s goals. The quality of the offsets is not good enough; there are so many of them that the price is far too low to make airlines reduce emissions. An EU system could do better. T&E says: “The aviation geeks of this world will know the argument [that international aviation can only be controlled by ICAO] by heart now: “aviation is an international mode of transport, so it requires international solutions”. But does it, really? A majority of the aviation industry is eager to privilege international solutions when they want to escape their environmental responsibilities, but are very happy to promote national solutions when it comes to getting [Covid] bailout money. This needs to stop. Aviation can’t have it both ways: it’s unfair for the sector to get support in bad times and refuse to contribute to European and national environmental efforts in good times. Especially when the industry isn’t effectively dealing with aviation’s climate problem by itself”.