Unlike fixed installations, aircraft operators in the European Economic Area will continue to receive the large majority of their emission allowances for free throughout phase 3 of the EU emissions trading system (2013-2020).
The cap on total aviation allowances for phase 3 was originally set at 210,349,264 per year and has been increased by 116,524 allowances per year from 1 January 2014 onwards to account for Croatia's full integration into the EU ETS.
The allowances are distributed as follows:
Free allowances are allocated to more than 900 aircraft operators who applied for free allocation by reporting their verified tonne-kilometre data for 2010.
This allocation is calculated on the basis of benchmark values established in European Commission and EEA Joint Committee decisions in 2011. In phase 3 of the EU ETS, an airline receives 0.6422 allowances per 1,000 tonne-kilometres flown.
The benchmark was calculated by dividing the total annual amount of free allowances available by the sum of tonne-kilometre data that aircraft operators sent to the Commission (independently verified data recorded throughout 2010).
Each country allocates free allowances to each aircraft operator. They calculate the allocation by multiplying the benchmark by the verified 2010 tonne-kilometre data of each eligible aircraft operators who applied.
The allocation of free allowances was, however, reduced to reflect the temporary reduction of the scope of the EU ETS for aviation between 2013-2016 in order to sustain momentum in the International Civil Aviation Organization (ICAO) negotiations on a global market-based measure.
The cap on total allowances is equivalent to 95% of 'historical' aviation emissions in the European Economic Area, as specified in the EU directive on aviation in the EU ETS.
The baseline for historical emissions is the annual average of CO2 emissions in the years 2004, 2005 and 2006 – calculated at 221,420,279 tonnes. This baseline is set out in a 2011 decision of the EEA Joint Committee .
The calculation was based on