Commission to propose ETS for aviation Dec 20

The European Commission will publish a proposal on 20 December to bring all aviation companies flying to and from the EU into the ETS for CO2 as of 2011.
A spokeswoman for Environment Commissioner Stavros Dimas said according to European Voice that the proposal was the best way to tackle growing concerns about the impact of aviation on climate change. “Our plans are not too ambitious,” she said. “We have done our homework and concluded that the price that needs to be paid is reasonable, as far as it is transferred to the customer, and can be borne by industry.”Commission impact assessments estimate that including all flights in the ETS will add €0-€9 to the price of a ticket. British Airways is in particular unhappy with the Commission proposal to make governments auction 40% of annual aviation emission permits by 2022

“The idea is to create a level playing-field,” said the spokeswoman, “both between airlines and sectors already covered by ETS, and between different airlines.” The Commission proposal will require all airlines to keep CO2 emissions at 2005 levels until 2022. Flight companies wishing to go beyond this baseline would have to buy emission permits from other airlines, or other companies already covered by ETS.
UK-based flight company British Airways said the plans were too ambitious and would damage European competitiveness. Paul Marston of BA said that a simplified emission trading scheme, applying only to flights within the EU, could be a model for the rest of the world to follow. BA is also unhappy with the Commission proposal to make governments auction 40% of annual aviation emission permits by 2022. Marston said this would unfairly increase costs for the airline sector. The majority of emission permits under the existing ETS are given directly to industry. The Commission says auctioning raises the price of emission permits and increases the incentive to find carbon-reduction technologies.
Airlines could profit by £2.7bn ($5.3bn, €4bn) from their inclusion in the EU’s greenhouse gas emission trading scheme, according to an analysis published on Monday by the UK’s Institute for Public Policy Research, a left-leaning think-tank. A separate report by WWF, the conservation charity, suggested that airlines, many of which have protested against being included, would profit by €3.5bn ($4.6bn, £2.3bn). Both reports assume that airlines would be given free allowances for the amount of carbon dioxide they could emit, but that they would pass on the notional cost of buying the allowances to airline passengers. But in practice airlines might find it difficult to profit from emissions trading in this way, given the fierce competition over prices on many routes.