July 7, 2008: The aviation sector will join the European Emissions Trading Scheme (ETS) in 2012. All airlines taking off or landing in the EU will fall under the scheme. Carriers will be allocated emission allowances based on their emissions in 2004-6. On average, Ascend Worldwide estimates that airlines flying in and out of the EU will be allocated 77% of their 2012 emissions, 15% of which will be auctioned to them. Some 63 million tonnes (less than a quarter of forecast emissions for 2012) will have to be bought on the carbon markets. According to Ascend, in the midst of the current fuel crisis, airlines are dismayed at the prospect of such a high level of auctioning in the first year. Currently, for every dollar increase in the oil price, global costs of the world's airlines go up by another US$1.6 billion. "EU operators such as BA, Virgin and easyJet have long understood that carbon trading may be a necessity and preferable over taxation", said Gehan Talwatte, Managing Director of Ascend. "However, some may question the need for ETS when the current fuel price is doing everything the EU Parliament intended the ETS to do, and more".
