Inclusion of aviation activity in EU Emissions Trading Scheme

Inclusion of aviation activity in the EU ETS requires operators to account for their greenhouse gas emissions over a given year. At the end of that year, the aircraft operator must have enough CO2 allowances (credits) for the fuel burned on flights to, from and within EU countries in the year.

An operator has three sources to account for its carbon emitted: free allocation allowances, allowances purchased on the open market (including auctions organised by MS) and carbon offset credits. The free allocation credits from the benchmarking process, carbon offset credits up to 15% of emissions, and if necessary, the purchased additional allowances from the market are used to account for the operator's emissions in that year.

In the event the operator has a surplus of allowances at the end of the year, the surplus may be sold back to the market.

Non-compliance

These obligations are mandatory and penalties will be imposed where operators fail to comply. The Directive has set substantial monetary penalties for non-compliance, including, as a last resort, operating bans on flights into and out of EU countries if necessary.