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Aviation inclusion in EU's ETS - the facts

This is a media release from the European Commission
For immediate distribution
Tuesday, 15 July 2008
Aviation inclusion in EU's emissions trading scheme - the facts

Last Thursday the European Parliament voted to include aviation in the EU's Emissions Trading Scheme (ETS). This press release gives further clarification of what this may mean for New Zealand. Aviation emissions are growing fast and if no action is taken the increase in these emissions could offset any savings made in other sectors. Some facts:

The ETS is not a tax_. Emissions trading creates an asset - an allowance which enables the polluter to emit CO2. These allowances are property rights which have a market value. The value of the allowances is determined by the market and not by government

• At the start of the scheme, 85% of the allowances will be allocated for free to the aviation sector. These allowances are currently worth â‚30 per tonne, so provision of free allowances provides the sector with considerable free assets. Only the remaining 15% will be auctioned.

• The International Civil Aviation Organisation has recognised that emissions trading is more cost-effective than taxes and charges.

• Airlines will only be required to surrender allowances for the flights to and from the EU. If a flight from the EU to New Zealand makes a stop in Singapore then it is only this first leg of the journey which will be covered.

• As the scheme will apply to all airlines operating on routes to/from EU airports without regard to the nationality of the operator, competition between airlines is not expected to be significantly affected.

• Moreover, airlines that have only long haul-flights covered by the scheme are generally likely to be better off than the average airline in terms of the number of free allowances allocated under the benchmark approach proposed.

The Exemption - de minimis

• The legislation will contain a de minimis for airlines which operate infrequently to the EU, namely less than 243 flights for three consecutive 4-month periods (i.e. on average less than 2 flights per day to or from the EU) and a de minimis for airlines with low annual emissions of less than 10,000 tonnes CO2 p.a.

Further information:
DG ENV climate change website:


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