Overview

The EU Emissions Trading Scheme (EUETS) is a key mechanism by which the EU seeks to achieve the greenhouse gas emissions reductions to which it has committed under the Kyoto Protocol and the EU Energy and Climate Change Package.

The aviation sector is required by the EU Aviation Emissions Directive to enter into the EUETS for the first time from 1 January 2012. and the UK has just implemented regulations in relation to this Directive, which largely repealed earlier regulations made in 2009.

The new regulations introduce a duty on aircraft operators to surrender allowances equal to their emissions. Penalties for non-compliance will include the ability to impose an operating ban on aircraft operators.

However a case has been referred to the European Court of Justice which may lead to the inclusion of non-EU aviation emissions in the EUETS being deemed unlawful, and airline operators will need to track this closely. Eversheds has the details.