Application of the EU Emissions Trading System to the UK aviation sector

This page provides an overview of the EU Emissions Trading System (ETS) for aviation, which came into force on 1 January 2012, and sets out the role of the CAA and the ETS principal regulators

The EU Emissions Trading System (EU ETS) is the key policy introduced by the European Union to help meet its greenhouse gas emissions target of 8% below 1990 levels for the 2008 to 2012 period under the Kyoto protocol. The system began in January 2005 for stationary installations, such as large factories and power stations.

Following Europe-wide agreement to EU Directive 2008/101/EC in 2008, aircraft operators are included in EU ETS from January 2012. Hence all flights beginning and ending in Europe are included in ETS, although some exemptions may apply.  In common with the ETS system in place for other sectors, the EU ETS system for aviation is based on a “cap and trade” system which involves establishing emissions caps for the sector and the trading of allowances between emitters. Aircraft operators may buy and sell allowances during the year, but must surrender the number of allowances equal to their actual reported emissions for each year.

The total quantity of allowances to be allocated to aircraft operators is based on the CO2 emissions from the aviation sector, averaged annually from the years 2004, 2005 and 2006. This figure has been established by the Commission as 221.5 million tonnes of CO2 per year. Aviation emissions were capped in 2012 at 97% of this figure, declining to 95% from 2013. Of the cap, 85% of emissions allowances will be allocated for free according to common European benchmark and 15% of the UK’s share will be auctioned by the Government.
On 12 November 2012 the EU Commission proposed to defer the requirement for airlines to surrender emission allowances for flights into and out of Europe until after the 2013 International Civil Aviation Organization (ICAO) General Assembly in September 2013.  The proposal was approved by the European Parliament and the Council on 24 April 2013 and came in to force immediately.  This became known as 'Stop the Clock'.  Since the ICAO General Assembly the EU Commission has proposed an amendment to the EU-ETS to take the form of a European Regional Airspace Approach.  This proposal is still draft and going through the legislative process of the EU Commission.

Application of the EU ETS in the UK

The EU Aviation ETS Directive has been transposed into UK law.

The regulators for EU ETS for aviation in the UK are:

The CAA's role 

The CAA provides expert assistance and advice to Government and the UK regulators listed above to help ensure the smooth implementation of the System in the UK. It is not a regulator for EU ETS. For more information on the CAA’s role please contact Ian Russell at the CAA:

ian.russell@caa.co.uk

Regulatory Policy Group, CAA House, 45-59 Kingsway, London, WC2B 6TE

Further information