European emissions trading scheme

Abstract

In response to the Kyoto Protocol the European Union implemented the European Emission Trading Scheme (EU-ETS). Starting in 2005 the scheme had initially been limited to certain stationary installations. Since 2012 it has been extended to encompass emissions from aviation activities as well. Hence for emissions resulting from the combustion of fossil fuels emission allowances have to be surrendered. These allowances are either allocated free of charge or auctioned. For emissions resulting from the combustion of sustainable biofuels no emission allowances are required. Following the broad international opposition against the inclusion of aviation in the EU-ETS, flights beyond the European Economic Area have been excluded in anticipation of an international approach to mitigate the global aviation emissions. This paper first outlines the intention and development of the EU-ETS with a focus on the legislation concerning aviation. Moreover the administrative procedures to fulfil the regulatory obligations are described, especially the requirements to account for the use of biokerosene. Finally, the derogation from the original legislation and the Market-based Measures currently developed on the ICAO-level are considered in the outlook.