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Aviation emissions were incorporated into the EU Emissions Trading System (EU ETS) in 2012, initially covering all flights within the EEA, but were limited to intra-EEA flights in 2016. In 2023, revised legislation aims to potentially expand the scope again to include all flights departing from the EEA in the future.
Aviation emissions were incorporated into the EU Emissions Trading System (EU ETS) in 2012, initially covering all flights within the EEA, but were limited to intra-EEA flights in 2016. In 2023, revised legislation aims to potentially expand the scope again to include all flights departing from the EEA in the future. It also sets the stage and the schedule for the phase out of free allowances for aviation. The EU ETS has reduced aviation emissions by over 17 million tonnes annually, with compliance rates of 99.5% . By 2024, all airlines operating within Europe, including non-European ones, must comply with EU ETS regulations, covering intra-European flights and those to/from Switzerland. In 2023, the EU ETS captured 22% of aviation emissions from European flights, totaling 164.5 megatonnes of CO₂. They have spent €3 billion to buy allowances, making carbon costs their third largest expense. Aviation emissions rose by 10% in 2023 compared to 2022, reflecting recovery from the COVID-19 pandemic, while other sectors saw significant emission reductions.
Aviation was incorporated into the EU Emissions Trading System in 2012, initially encompassing all flights departing from or arriving at an airport within the European Economic Area (EEA). However, due to substantial pressure from both the international community and the industry, the EU opted to temporarily limit the scope to cover only intra-EEA flights in 2016.
Throughout 2021 and 2022, the EU institutions engaged in negotiations to reform the Emissions Trading System for aviation again - this resulted in the publication of a revised legislation in 2023. The news of the document were regarding the future potential expansion of the scope to again include all flights departing from the EEA, just like at the beginning in 2012. Also, the new legislation engaged in a gradual phase-out of free allowances allocated to the aviation sector.
As per the EU Commission, the system has reduced the carbon footprint of the aviation sector by over 17 million tonnes annually, with compliance rates of over 99.5% for aviation emissions. Currently, under the scope of the EU ETS are non-commercial operators with emissions of 1,000 tonnes of CO2 or more per year, and commercial operators with emissions of 10,000 tonnes of CO2 or more per year and who have conducted 243 flights or more in at least one of the three consecutive four-month periods of the year.
Under the EU ETS presently, all airlines operating within Europe, whether European or non-European, must monitor, report, and verify their emissions, and surrender allowances accordingly.
At present, intra-European flights fall under the system, encompassing journeys to/from and within Norway, Liechtenstein, and Iceland. Flights from the EEA to Switzerland are also included.
In 2023, the EU ETS captured 22% of aviation emissions from flights originating in Europe. This is due to the fact that the system's current coverage is limited to intra-EU flights as mentioned above. Flights departing from Europe emitted a total of 164.5 megatonnes of CO₂ in 2023. To match their EU ETS compliance obligations, airlines operating in Europe paid €3 billion in EUA allowances in 2023. The cost of carbon has become the third largest expense for major European airlines in 2023, ranking behind fuel and labor.
As a reminder, data reported by EU Member States as of April 2, 2024, indicated a 15.5% decrease in emissions in 2023 compared to 2022 levels. The primary driver behind this record decrease in EU ETS emissions has been the power sector, which saw a 24% decrease in emissions from electricity production compared to 2022. The industry sector also witnessed a reduction in emissions, approximately 7% lower than in 2022. On the other hand, aviation emissions increased by approximately 10% compared to 2022, attributed to the industry's ongoing recovery from the traffic decline during the COVID-19 pandemic.
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