European Parliament negotiators working on the revision of the aviation part of the EU Emissions Trading System (ETS) have agreed to accelerate the phasing out of free allowances for the sector in 2024, according to compromise amendments to be put to a vote in the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) on Monday 16 May.
While the European Commission’s proposal calls for 25% of free allowances to be auctioned in 2024, 50% in 2025, 75% in 2026 and 100% in 2027, the negotiators want 50% of free allowances to be auctioned from 2024.
As of 1 January 2025, all free allowances would be auctioned, according to the compromise amendments, but with one exception.
Negotiators agreed that during the period from 1 January 2024 to 31 December 2029, 20 million allowances would be set aside to be allocated in the same way as a ‘contract for difference’, covering the remaining price difference between paraffin fossil fuel and sustainable aviation fuels, in proportion to the quantity of sustainable aviation fuels that are used. The aim is to encourage airlines to switch to sustainable fuels, thereby supporting the creation of a European market for sustainable aviation fuels.
In addition, a further 20 million allowances should be set aside for the same period when flights from the European Economic Area (EEA) to third countries come within the scope of the ETS.
The negotiators propose to extend the ETS to all flights departing from an aerodrome located in the EEA as of 30 April of the year that follows the entry into force of the revised ETS Aviation Directive.
The vote on the amendments will be followed on Tuesday by the vote on the European Parliament’s amended draft report.
Read the compromise amendments: https://aeur.eu/f/1mp (Original version in French by Damien Genicot)