Aviation And The EU ETS: What's Next?

The European Union Emissions Trading System ("EU ETS") faced serious international opposition in 2012 for seeking to include carbon emissions from flights into and out of the EU under the ETS regulatory umbrella. While the EU retreated from full enforcement at the 11th hour of 2012, EU officials have made clear that the EU intends for aviation emissions associated with European Union travel and transport to be regulated under some scheme by the end of 2013. This intent to regulate emissions outside the EU, coupled with volatile carbon prices, will prove 2013 to be a year of significant EU ETS developments for the aviation community as well as the global community. This article briefly outlines recent aviation-related developments with the EU ETS and then highlights areas to watch in 2013.