What goes up must come down: GHG emissions and aviation in the EU.

Australia may have been one of the first nations to see in the new year, but not the dawn of a new era of making airlines pay for their GHG emissions, which has already begun this year in Europe.
Well before Australia’s clean energy legislation, the EU passed legislation to include aviation in the EU emission trading scheme (ETS) in 2008. From 2012, aviation GHG emissions are now capped at 97% of 2005 levels, and from 2013 onwards at 95%. This cap is expected to be represent two thirds of 2012 emission levels, so the remaining third above the cap must be covered emission allowances.
Two thirds of allowances to operators who fly in, out and within the EU will be allocated for free based on an average fuel efficiency benchmark, so some aircraft operators flying older fleets or a greater number of short-haul flights may find themselves more strongly impacted.

Overall the cost to aviation industry is expected to be €900 million in 2012 increasing to €2.8 billion by 2020. To cover these costs individual operators are increasing airfares. For example, Delta Air Lines has a $3 surcharge on tickets for flights between the United States and Europe, and Cathay Pacific, is expected to add $6 per ticket between Hong Kong and Europe.
Whilst airlines from outside the EU have rallied against the scheme and so far unsuccessfully argued against the extension of the EU ETS, for the foreseeable future a carbon cost will be applied at a Flight Centre near you…. Just spare a thought for Qantas which will operate across three different carbon schemes - Australia, New Zealand and Europe - from the middle of 2012.