EU takes next step in making airlines pay for carbon

BRUSSELS Mon Jan 30, 2012 7:16am EST

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BRUSSELS (Reuters) - The European Commission on Monday took another technical step to bring all airlines using EU airports into its carbon trading scheme, following on from last year's court ruling that, despite loud international opposition, the EU plan was legal.

U.S. Secretary of State Hillary Clinton and China are among those to have stated fierce objections to the EU law forcing airlines landing or taking off from the European Union to pay for carbon emitted.

Airlines, meanwhile, have begun buying carbon permits under the EU Emissions Trading Scheme (ETS) and carriers, such as Germany's Lufthansa, have said they will pass the cost on to passenger fares.

At first, airlines will get free allowances to cover some 85 percent of their emissions and their bill will only be calculated after their carbon output has been added up at the end of the year.

To begin the accounting process, the Commission on Monday partly activated its registry to centralize carbon allowance accounts currently held under national registries, pending full activation, which will not take place before June.

"We have jointly taken the decision to partially activate the Union registry based on the assurance that the system is ready from a security and operational point of view," said a letter from the Commission to EU member states seen by Reuters.

The effect is that from Monday, aircraft operators can open accounts in the central EU registry and will then become eligible for free allowances.

At the end of February, they will receive a first tranche of roughly 181 million aviation carbon permits to be handed out in 2012.

(Reporting by Barbara Lewis and Francesco Guarascio; editing by Keiron Henderson)

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