New studies have found that British airlines have been allowed to pollute for free and have been subsidized through the UK’s flagship scheme to reduce carbon emissions.
The UK government has given airlines so many pollution-free permits through the aviation carbon market that they do not have to pay for any of the climate warming emissions. According to a new study by Green Group’s Transport & Environment (T & E), airline pollutants received £ 242 million worth of free CO2 “allowances” last year¹. The UK carbon market is to reduce carrier emissions under the polluter pays principle.
Studies show that 4.4 million free permits reduce 3.4 million that carriers had to surrender under the UK Emissions Trading System (UK ETS). The airline could have held an excess allowance of 900,000 for the future or sold it back to the UK ETS secondary market. If these excess allowances were sold, the airline could have deposited up to £ 72m in the bank.
Matt Finch, UK Director of T & E, said:
“The government has implemented plans aimed at reducing air emissions, but it still allows free jailbreak cards. Last year it was doubly silly. Airlines are free and contaminated. In addition to being allowed to do so, the government has given airlines an excess of free allowances that airlines can sell. This is the gap in public funding needed for public services that taxpayers had to fill in instead. “
EasyJet, Ryanair and British Airways were the largest beneficiaries of free pollution permits. This happens after British Airways and easyJet have received significant government relief during the COVID pandemic.
UK ETS is a cap-and-trade skim aimed at reducing carbon emissions from polluted industries such as aviation. In this scheme, one ton of carbon corresponds to one allowance. The airline is obliged to waive its carbon allowances from all other destinations departing the UK, the European Economic Area, and all flights departing from the UK to Gibraltar.
However, ETS in the UK gives airlines free allowances, allowing them to pollute for free. Theoretically, this is to mitigate “carbon leaks” (potential additional emissions created by airlines that avoid paying ETS allowances by rerouting). However, studies have shown that carbon leaks in aviation are minimal or nonexistent.
T & E warns that most carbon emissions from UK flights come from long-haul flights. This is outside the scope of the scheme. As a result, airlines do not pay most of the pollution. In 2019, only 14% of British Airways emissions were subject to the pricing policy. T & E wants to extend the scope of UK ETS to all departure flights in order to properly tax aviation carbon emissions.
“The UK Government has a great opportunity to solve the problems of the aviation carbon market and apply the polluter pays principle. Free pollution allowances in aviation make no sense, planning on one continent only. There were no restrictions. If the government wants to be seen as a leader in climate change, the only option is to end the free allowance and apply the scheme to all departure flights. ” Finch concludes.
UK ETS: Broken but fixable — Download briefing
Originally published on Transport & Environment.Related article:
¹ Using an average 2021 UKETS price of £ 55.59 per ton of carbon, these allowances were worth £ 242 million.
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