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Airlines recieve free carbon allowances worth between €800 million and €1 billion a year – halving what they should have to pay into the scheme. The free allowances are intended to protect sectors such as the steel industry against ‘carbon leakage’, where industries would move activities out of the EU to avoid paying for ETS allowances. But, unlike steel production, flights within Europe cannot be exported to another country.
Jo Dardenne, aviation manager at T&E, said: “It’s astonishing that the EU has a carbon pricing scheme that actually allows airlines to pollute for free. This surge in EU support to end free pollution permits is an important step to finally start tackling aviation emissions. EU Vice President Timmermans should use this opportunity to press on with taxes on kerosene and a European law to force airlines to use clean e-fuels.”
Aviation’s carbon pollution in the EU ETS continued to grow by 4.9% in 2018, while the other sectors’ emissions decreased by 3.9% on average. The European Commission is currently conducting an impact assessment of the options for revising the ETS, and it will make a proposal in 2021. The Commission’s European Green Deal already commits to “reducing” the number of free allowances given to airlines.
T&E said that removing free pollution allowances should go hand in hand with jet fuel taxation – including bilateral agreements to tax kerosene while waiting for an EU-wide tax to be agreed.
Jo Dardenne concluded: “Aviation benefits from a fuel tax holiday of €32 billion a year and fuel taxation is one of the most effective ways of putting a price on carbon emissions. The governments supporting Poland’s proposal should also start taxing jet fuel today through bilateral fuel tax agreements.”
The emissions of all flights departing from EU airports have grown from 1.4% of total EU emissions in 1990 to 3.7% today. If unmitigated, aviation emissions are expected to double or triple by 2050 and, in doing so, consume up to one-quarter of the global carbon budget under a 1.5 degree scenario.
Note to editors:
 The discussion on aviation allowances at today’s Environment Council was held in camera. Official sources have told T&E that Poland’s proposal was supported by: Denmark, the Netherlands, Sweden, Finland, France, Italy, Belgium, Hungary, Lithuania – and the European Commission.
Only Cyprus and Portugal expressed strong reservations.