Under the deal, all flights entering and leaving the EU – not just those within the EU – would fall under the scheme in January 2012 – the final year of the scheme's second phase.
The number of allowances in 2012 would be capped at 100 per cent of average emission levels over 2004-6. This is weaker than the 90 per cent cap proposed by the European parliament, but in line with the European Commission’s proposals published last January. The cap for the scheme's third phase, which begins in 2013, will initially also be set at 100 per cent, but this figure could be amended in a planned review of the EUETS.
Ministers agreed that ten per cent of allowances should be auctioned for the first year and that auction revenues "should" be used to tackle climate change and cover the administrative costs of the system, but the final decision on how to spend the funds is left entirely to member states.
Governments also agreed to set aside three per cent of total allowances during the third phase of the EUETS which begins in 2013 for new airlines joining the scheme, or for fast-growth airlines whose traffic increases by more than 18 per cent annually. This is to allow for the expected growth in aviation among the EU's newer member states.
Whilst Environment Minister Hilary Benn welcomed the agreement, environmental groups, who had wanted further caps on aviation emissions, were angry. “These plans will give a dangerous free rein to the aviation industry and see climate changing emissions soar. This is solely about making money, and not cutting global warming gases.”, said Anna Jones from Greenpeace.
The draft directive now goes to the European parliament, with a final decision due in spring.