EU ETS aviation emissions

EU MEPs Back New Direction For Taxing Aviation’s Emissions

Members of the European Parliament have preliminarily agreed to continue with the aviation industry’s current treatment under the EU’s emissions trading scheme to allow for the development of a new industry-specific carbon tax arrangement.

The EU’s emissions trading scheme (ETS) was launched in 2005 to promote the reduction of greenhouse gas emissions at EU level. It is a “cap and trade” system with a cap or limit on the amount of certain greenhouse gases that can be emitted, with carbon emission permits traded between participants for emissions above this cap, to provide a method of taxing carbon emissions to encourage energy efficiency.

The aviation sector is part of the existing ETS regulation. Emissions from aviation also form part of the EU’s goal of cutting greenhouse gas emissions by 20 percent by 2020 compared to 1990 levels.

In 2014, the EU decided to reduce the scope of the ETS scheme to apply only to intra-European Economic Area (EEA) flights, in order to facilitate progress in the negotiations within the International Civil Aviation Organization, and in the hope of achieving clarity regarding emissions from international flights connecting the EEA and third countries. It was then decided that the derogation for non-intra EEA flights would apply only until the end of 2016.

In October 2016, the International Civil Aviation Organization (ICAO) and countries agreed on a Resolution for a global market-based measure to address CO2 emissions from international aviation as of 2021. The agreed Resolution sets out the objective and key design elements of the global scheme, as well as a roadmap for the completion of the work on implementing modalities. It was agreed on the basis of this Resolution that the EU would extend the derogation for non-intra EEA flights.

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EU ETS aviation emissions