UK first to issue free carbon credits to airlines

5th March 2012


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  • Mitigation ,
  • Carbon Trading ,
  • EU ,
  • Transport

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IEMA

DECC has issued the first free allowances to airlines under the EU emissions trading scheme (ETS)

The energy department has given almost five million allowances to three airline operators, making the UK the first EU member state to issue the allowances under the controversial expansion of the cap and trade scheme.

From 1 January 2012 all international airline flights to and from EU airports have been covered by the ETS, despite strong objections from operators based outside Europe and threats from governments including China and the US, to ban airlines from participating.

As with other high-emitting sectors, airlines receive a certain amount of free carbon allowances and then can sell spare allowances or buy the extra credits needed to cover annual emissions.

The UK, which has more than 56 million allowances to issue to 374 organisations including American Airlines, Cathay Specific and British Airways, issued the first free allowances on 28 February.

DECC is yet to release the names of the participant firms which received the allowances, due to concerns over commercial confidentiality, but has confirmed there is now nothing holding up the issuing of EU ETS credits.

According to a statement from the department: “As soon as aircraft operators complete the registry account opening process, they will be able to receive their allowances.”

The news came a week after government representatives from countries outside the EU, including Russia, India and the US, met to discuss potential retaliatory measures to the scheme including lodging a formal complaint to the United Nations’ International Civil Aviation Organisation and imposing extra levies on EU airlines.

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