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Inclusion of aviation in the EU ETS

Since 2012, emissions from international aviation are included in the EU Emissions Trading System (EU ETS).

Like industrial installations covered by the EU ETS, airlines receive tradeable allowances covering a certain level of CO2 emissions from their flights per year.

The legislation, adopted in 2008, applies to EU and non-EU airlines alike. Emissions from flights to and from Iceland, Liechtenstein and Norway are also covered. Croatia will become a full member of the EU ETS on 1 January 2014.

Incoming flights can be exempted from the EU ETS if the EU recognises that the country of origin is taking measures to limit aviation emissions from departing flights.

'Stopping the clock' to allow more time for a global solution

The EU has been seeking a global agreement to tackle aviation emissions through the International Civil Aviation Organisation (ICAO) for more than 15 years.

In November 2012 the Commission made a proposal to exempt from enforcement [54 KB]flights into and out of Europe operated in 2010, 2011, and 2012 to provide negotiation time for the ICAO General Assembly in autumn 2013. The proposal was approved by the European Parliament and the Council on 24 April 2013. The decision entered into force with immediate effect.

The general legislation will continue to apply to all flights within and between the 30 European countries in the EU ETS.

The Commission believes a global solution is within reach at the 2013 ICAO General Assembly. In its statement the Commission made clear that, should this meeting fail to make the necessary progress, the EU ETS legislation would be applied in full again to all flights to and from European airports.

ICAO has long recognised the role that market-based measures can play in achieving environmental goals cost-effectively and in a flexible manner. For the EU, an agreement in ICAO on market-based measures must include three key elements:

• It must deliver aviation emission reductions at least as big as the EU ETS is doing;
• It must be non-discriminatory for all airlines;
• It must contain targets and measures for ICAO member countries.

The EU legislation is designed to be amended in the light of a global agreement.

Most cost-efficient approach

The Commission concluded that bringing aviation into the EU ETS is the most cost-efficient and environmentally effective option for controlling aviation emissions after undertaking a wide-ranging consultation of stakeholders and the public and analysing several types of market-based solutions.

Compared with alternatives such as a fuel tax, including aviation in the EU ETS provides the same environmental benefit at a lower cost to society - or a higher environmental benefit for the same cost.

Compatible with international law

The EU's legislation on aviation emissions is compatible with international law. This was confirmed by the European Court of Justice on 21 December 2011 in a legal case brought by some US airlines and their trade association against the inclusion of aviation in the EU ETS.

The Court stated that:

• the extension of the EU ETS to aviation infringes neither the principle of territoriality, nor the sovereignty of third countries;
• the EU ETS does not constitute a tax, fee or charge on fuel, which could be in breach of the EU-US Air Transport Agreement;
• the uniform application of the EU ETS to European and non-European airlines alike is consistent with provisions in the EU-US Air Transport Agreement prohibiting discriminatory treatment between aircraft operators on nationality grounds.

Aviation emissions growing fast

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.

Direct emissions from aviation account for about 3% of the EU’s total greenhouse gas emissions. The large majority of these emissions comes from international flights.

By 2020, global international aviation emissions are projected to be around 70% higher than in 2005 even if fuel efficiency improves by 2% per year. ICAO forecasts that by 2050 they could grow by a further 300-700%.

Including aviation in the EU ETS is forecast to save around 176 million tonnes of CO2 emissions by 2015.