EU EMISSION ROW

Chinese and Indian airlines did not submit carbon-dioxide emissions data for 2011, disregarding European rules that seek to expand the region’s emissions trading system to include aviation. There has been “systematic non-reporting” of emissions to and from Europe from 10 airlines based in India and China, the European Commission said on Tuesday.

The European Union expanded its Emissions Trading Scheme in January to include airlines. The new rules require carriers to submit data on their carbon emissions for last year, although carbon permits are not required for 2011 emissions.

The inclusion of airlines in the E.T.S. triggered opposition from countries including the United States, China and Russia. They said the European Union should let a United Nations agency, the International Civil Aviation Organization, decide on greenhouse-gas limits for the industry.

The Chinese and Indian airlines represent less than 3 percent of the sector’s emissions, said Connie Hedegaard, the European climate commissioner. Eight airlines in China and two in India have until mid-June to submit the data, she said. The remaining airlines reported last year’s emissions by the March 31 deadline, the commission said in the statement. More than 1,200 emissions reports have been submitted from airlines, it said.

The airlines that failed to obey the rules probably will not be penalized. Instead, the European Union may become more strict next year when airlines need to hand in allowances to cover their emissions, Isabelle Curien, a Paris-based analyst at Deutsche Bank, predicted.

This year, carriers will be given free emission permits covering 85 percent of the industry cap and will have to buy the remaining 15 percent at auction. They can also trade among each other.

The EU ETS is one of the policies introduced across the European Union (EU) to help it meet its greenhouse gas emissions reduction target under the Kyoto Protocol. The EU has to make an eight per cent reduction on 1990 levels by the first Kyoto Protocol commitment period (2008 - 2012).

The EU ETS is cost-effective and operates by the allocation and trading of greenhouse gas emissions allowances throughout the EU - one allowance represents one tonne of carbon dioxide equivalent.

An overall limit, or 'cap', is set by Member State's Governments on the total amount of emissions allowed from all the installations covered by the scheme. The allowances are then distributed to the installations in the scheme.

At the end of each year, operators are required to ensure they have enough allowances to cover their installation's emissions. They have the flexibility to buy additional allowances (on top of their free allocation), or to sell any surplus allowances generated from reducing their emissions.

These options create a flexible compliance regime for operators and also ensures emissions are effectively capped across the EU. 

The scheme currently has two operating phases:

            Phase I ran from 1 January 2005 to 31 December 2007 and was a 'learning by doing phase';

            Phase II runs from 1 January 2008 to 31 December 2012 and includes revised monitoring and reporting rules, more stringent emissions caps and additional combustion sources;

            Phase III, which will run from 1 January 2013 to 31 December 2020, brings major changes including, harmonised allocation methodologies and additional greenhouse gases and emission sources.