The cap for aviation-sector emissions under the EU emissions trading system (ETS) will stand at just under 29mn t of CO2 equivalent (CO2e) next year.
A European Commission decision adopted this week sets the 2024 emissions cap for aviation operators at 28.9mn allowances. Each carbon allowance under the EU ETS is worth 1t of CO2e.
The calculation adjusts the sector's allocation down in line with the scheme's linear reduction factor, which decreases the overall EU ETS supply cap annually. The rate of reduction was raised to 4.3pc for 2024-27, from 2.2pc now, as part of efforts to align the system with a stricter target to cut EU emissions by at least 55pc by 2030, compared with 1990 levels.
Until now, 85pc of this cap was allocated free to airlines and the remaining 15pc auctioned. This would have constituted free allocations of 24.5mn allowances in 2024, according to the decision.
But free allocations for the sector will be gradually phased out by 2026, meaning a quarter of the 85pc allocation will be auctioned in 2024, rising to half in 2025 and 100pc in 2026, with the exception of a maximum of 25mn allowances that could be put towards sustainable aviation fuels or innovation support each year.
The EU ETS applies to all flights within the European Economic Area (EEA) — which includes all of the bloc's member states, along with Iceland, Liechtenstein and Norway — as well as those departing from the EEA to Switzerland and the UK.
The sector emitted about 47.4mn t of CO2e last year, commission data show, up from 27.7mn t of CO2e in 2021, as aviation activity continued to rebound from the slump at the height of the Covid-19 pandemic.
