Aviation Emissions - What Next?

Aviation and shipping account for around 5 per cent of global greenhouse gas (GHG) emissions. So it is surprising there is no global system to oversee or limit greenhouse gas emissions from these sectors. However, during 2016, that may change - leading to new environmental controls on airlines.

Since 2012, aircraft operators have been required to comply with the EU Emissions Trading System (EU ETS). Currently, this only covers carbon emissions from flights which take off and land within the European Economic Area. This derogation will expire in December 2016, the deadline by which the International Civil Aviation Organisation (ICAO) has agreed to deliver a global framework to regulate aviation emissions. If no global framework is agreed, the EU ETS will be extended to apply to all flights which either land or take off in the EU.

In February 2016, the ICAO announced that it has agreed an international carbon dioxide standard, which will lead to greater aircraft fuel efficiency. However, the ICAO member states still need to agree on a "market-based mechanism" in time for the EU's December 2016 deadline. The ICAO aims to have the talks completed by September 2016, in time for approval at the General Assembly meeting in October.

So what does this mean for the aviation sector?

EU Emissions Trading System (EU ETS) and the application to aviation

The EU ETS is the EU's key regulatory framework to reduce emissions of greenhouse gases. It requires operators of industrial installations to report on their annual emissions, and to buy and surrender allowances equivalent to those emissions. It covers around 12,000 factories, refineries, power stations and other industrial facilities in the EU.

In 2008 the EU tried to include the aviation sector within the EU ETS. However, many non-EU countries opposed this, arguing it was a breach of sovereignty, and that they should not have to pay emission offsets to European governments.

The US airline industry brought a legal challenge against the UK government, and the EU faced further pressure from the US, China and Russia. In November 2012 the EU agreed to "stop the clock" on the broader application of the EU ETS scheme to flights into or out of Europe, whilst the ICAO develops a global scheme.

Following the "stop-the-clock" decision, aircraft operators do not have to submit monitoring plans, report GHG emissions or surrender allowances for flights to and from countries outside the EEA until 31 December 2016.

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