FACTBOX: Aviation in the EU Emissions Trading Scheme

(Reuters) - European Union governments gave their formal approval on Friday to include aviation in the bloc's emissions trading scheme, they said in a statement.

As a result of the decision, the 27-nation bloc will include aviation from 2012 in the program, a key tool in its plan to fight climate change.

Aviation generates 3 percent of all carbon dioxide (CO2) emissions in the EU but has been left out of the trading scheme so far due to fears it would damage the industry's ability to compete in international markets.

With global air traffic set to double by 2020, Europe is keen to apply the "polluter pays" principle as it struggles to reduce output of greenhouse gases blamed for global warming.

The European Parliament voted 640 to 30 in July in favor of including airlines in the scheme from 2012, forcing them to cut CO2 emissions by 3 percent in the first year, and by 5 percent from 2013 onwards.

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Below are details of the plan, according to the UK's Department for Transport:

THE PLAN

* All airlines flying into and out of EU airports will be included

* Instead of separate emissions caps for each of the 27 member states, one EU-wide cap will be set based on historical levels

* The 2012 emissions cap to be set at 97 pct of average 2004-06 EU airline emissions

* Proposed cap of 95 percent of average 2004-06 emissions for 2013 onwards, though this is still being discussed under wider EU negotiations

* According to the EU Commission, 2004-06 average emissions were around 218 million tonnes of CO2. They are estimated to be 340 million by 2015, and over 400 million by 2020

* According to DfT, the scheme is likely to affect at least 87 major airlines, 35 of which are headquartered outside the EU.

AVIATION ALLOWANCES (AAs)

* Airlines receive 85 percent of AAs for free from February 2012