From 1 January 2012, emissions from all commercial flights arriving at or departing from EU airports have been subject to the EU Emissions Trading System (EU ETS). Aviation emissions will be capped for the year 2012 at 97% of the sector’s emissions over the period 2004-2006 (212 million tonnes of CO2). Between 2013 and 2020, the cap will be set at 95% of aviation’s 2004-6 emissions. Each airline will receive 85% of their emissions permits for free, based on their 2004-6 level. From 2013 onwards they will receive 83% for free. Airlines that operate more flights (or operate less efficiently) than in 2004-6 will have to buy more permits.
Meanwhile, negotiations have been proceeding in the International Civil Aviation Organisation (ICAO) on the development of a worldwide emissions scheme. When those negotiations reached a critical level, the European Commission proposed stopping the clock for one year on all international flights in the EU ETS. This proposal is now being examined by the European Parliament and Council before adoption. It remains to be seen whether ICAO can come up with a global solution before the clock starts again for the international portion of the EU ETS.