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EU carbon allowance allocation to airlines proceeds despite protest

08 Dec 2011 17:26:05 | edcm

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As international opposition to the inclusion of aviation in the EU's carbon emission trading system (ETS) continues to grow, member states have begun informing airlines of their exact free allocation.

Germany is the latest country to do so, saying on Thursday that it expects to allocate 42.8m free EU allowances (EUAs) to airlines at the start of 2012, which is the first year that the aviation sector will be included within the ETS.

German carbon registry DEHSt said it will inform individual airlines about the number of certificates they will receive until 2020.

The UK and Ireland have already published this information (see EDCM 3 October 2011 and 28 Ocotber 2011).

However, DEHSt said it will publish only a detailed list of relevant airlines and their respective EUA allocations on 23 December.

Pushed for details of the German system, a registry spokeswoman said: "All I can say is that we are going to allocate in total 42.8m EUAs in 2012 and 40.5m EUAs annually from 2013-2020 to around 130 airlines that have applied for the allocation of free allowances in Germany."

The allowances will be handed out to airlines by 28 February.

In early 2013, the airlines will have to report their emissions for the year 2012 and hand in the relevant number of allowances to registries.

The EU set the emission benchmarks, on which the exact allocation is based, in September ( see EDCM 26 September 2011).

US opposition grows

Meanwhile, after the European Court of Justice (ECJ) said it will rule on 21 December whether the EU's inclusion of airlines in the ETS is legal (see EDCM 7 December 2011) - which is expected to give the move a green legal light - US Senator John Thune introduced a bill to block the inclusion of US airlines in the trading system.

"The idea that the European Union has the right to tax American air passengers and carriers flies in the face of our country's sovereignty," Thune said in a statement on his website on Wednesday.

"I reject this proposed European tax and will work with my colleagues in Congress and countless concerned stakeholders to block this tax."

The bill introduced by Thune is similar to one brought by John Mica to the House of Representatives that was passed on 24 October (see EDCM 25 October 2011).

European estimates

In 2012, airlines will receive 0.6797 free aviation emissions allowances for every 1,000 tonne-kilometre reported for 2010.

A tonne-kilometre is a measure of the distance travelled and the total weight of load and passengers of flight.

According to calculations by consulting firm Altimedes, British Airways will receive the most 2012 allowances, collecting around 4.82% of total free credits, amounting to 10.35m EUAs.

It will be followed by Ryanair (5.6m EUAs), Iberia (4.6m), Emirates (4.3m) and Easy Jet (3.7m) as the top five recipients of free allowances in 2012.

In 2013-2020, the allocation will fall to 0.64219 free aviation allowances per 1,000 tonne-kilometre reported for 2010.

From 30 April 2013, flights landing or departing from airports within the territories of the EU states, as well as Norway, Liechtenstein and Iceland, will have to surrender EUAs matching their emissions in the previous year.

Each year, airlines will receive some free EUAs and will have to buy any extras they need on the carbon market. MLDB

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