Aviation

Aviation sector under EU ETS

Since 2012 all flights operating within the EU member states are under the scope of the Aviation Emission Trading Scheme. Operators must surrender one allowance per ton of CO2 emitted on a flight to and from (and within) the EU. This covers passenger, cargo and non-commercial flights and applies no matter where an operator is based, non-EU carriers will also need to comply with the scheme.

Airlines are subject to different rules than industrial installations and are in a more volatile environment in respect to the regulation. Virtuse can manage your exposure in the EU ETS, and help you to understand and prepare for the future implications of Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Clients are required to purchase EUAAs (European Union Aviation Allowances) every year to comply. Aviation sector may use both EUAs and EUAAs for compliance, but due the fact that EUAAs sell at a discount to EUAs, majority of airlines prefer to use the EUAAs. Just like EUAs, EUAAs can be purchased through auctions, at the exchanges, or at the OTC markets.

 

Timeline

  • 2021 to 2023 – a ‘pilot’ voluntary phase of countries which choose to be part of the scheme.
     
  • A 2022 review will be conducted on the implementation of the CORSIA, to determine if there will need to be any adjustments before the scheme continues.
     
  • 2024 to 2026 – the first implementation phase, also on a voluntary basis.
     
  • 2027 to 2035 – the second phase which will include most States except least developed, small island states and any country with a small amount of international air traffic (currently proposed at less than 0.5% of global traffic). This second phase has triennial technical adjustments to the distribution of obligations between individual airlines, moving from a collective approach towards more of an individual approach.