CoolPass: European Commission to allocate 212.9 million aviation allowances in 2012.

The aviation industry is to be allocated 212.9 million allowances under the EU’s emissions trading scheme next year, but demand for permits may cost the sector over $1 billion says one analyst.
March 7, 2011 - PRLog -- CoolPass sources report that the allocation announced recently by the commission is based on 97% of the sectors average annual emissions between 2004 and 2006.

According to the EC the cap is set to fall to 95% of historical emissions from 2013 until the end of 2020, equivalent to 208.5 million.

While 82% of allowances (174.6 million) will be given for free to around 4,000 airlines participating in the program in 2012, airline operators will need to purchase a total of about 70 million carbon units, which includes EUAs and UN-backed offsets, Barclays Capital analyst Trevor Sikorski told CoolPass.

Sikorski predicts the sectors emissions at 248 million tonnes of CO2 next year, which will leave a deficit of about 36 million tonnes.

“We would expect that 15% use of CERs will largely be employed and that the airlines will be in the market for some EUAs – likely to be under 10 (million),” he informed CoolPass.

Above the 82% that will be given away free, a further 15% will be auctioned and 3% will be reserved for new entrants.

The majority of flights taking off or landing from EU airports from the beginning of 2012 will be covered by the bloc’s emissions trading scheme, irrespective of the nationality of the aircraft operator.

The EC predicts that by 2020 a total of 183 million tonnes of carbon will be saved each year on flights covered by the scheme, equating to a 46% reduction compared with business-as-usual levels.

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