Update On Aviation And The Emissions Trading Scheme

The European Commission's proposal to extend the European emissions trading scheme (ETS) to include aviation activities has been controversial and subject to amendments by the European Parliament and, most recently, the European Council (Council).  The Council's position generally is consistent with the Commission's proposal, while the European Parliament has adopted a position which would lead to a much more stringent scheme for the aviation sector than any other sector.

Reason For Change

Under the existing ETS Directive 2003/87/EC (Directive), all operators subject to the scheme are allocated a number of allowances for their greenhouse gas emissions. Each allowance entitles an operator to emit one tonne of carbon dioxide per year.  If an operator produces less emissions, it may sell its extra allowances for the benefit of any other operator whose emissions exceed its emissions