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Europe

Brussels Approves CO2 Trading Plan for Airlines

All flights starting and landing in Europe will be included in an EU Emissions Trade System from 2012, following a vote in the European Parliament. Airlines say it will drive up the cost of air travel.

Airplane

As of 2012, airlines flying in and out of the EU will take part in the trading program

European legislators on Tuesday, July 8, gave their overwhelming approval, 640 votes to 30, to a compromise with the EU Council of Ministers, allowing the emissions trading plan to come into force in four years time.

Under the program, airlines receive rights to emit a specified tonnage of carbon dioxide annually. If they fall below their allocation, by using a modern fleet of aircraft, for example, they can sell off their unused emissions.

Airlines who emit more than allowed will be required to buy more emissions rights permits.

It forces airlines to cut carbon dioxide emissions by three percent in the first year and by five percent from 2031 onwards. All air carriers flying into the EU, including non-European airlines, would be included in the program.

Peter Liese, the parliament's rapporteur on emissions, called the move "revolutionary."

Experts expect the measures, which are designed to reduce harmful greenhouse gas emissions blamed for global warming, will lead to an increase in fares.

Unhappy airlines

Airlines howled in protest, saying the plan would distort competition and cost them hundreds of millions a year.

"From our perspective, the Emissions Trading Scheme is ecologically counter-productive and economically harmful," a spokesman from German airline Lufthansa told Reuters news agency.

While the European Commission has said the deal will add between two and nine euros to the price of a return flight in the EU, budget airline Ryanair said the plan could make a ticket 50 euros ($78) more expensive.

"When airlines like Ryanair have invested heavily in new aircraft to reduce our emissions per passenger by 50 percent, there is no justification for this tax theft," said Ryanair CEO Michael O'Leary.

Revenues toward climate change fight

Under the plan, 85 percent of the emissions certificates are to be allocated for free according to a common European benchmark. The remainder will be auctioned.

Revenues generated from the auctioning of emissions allowances will be used to fund efforts to combat climate change, research on clean aircraft, anti-deforestation measures in the developing world and low-emission transport such as trains or buses.

Airlines with fuel-efficient planes will benefit from the new measures, said Liese, while those with older fleets of environmentally unfriendly aircraft will pay more.

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