EU Postpones ETS Extension

In mid-November 2012, the European Union (EU) postponed planned extension of its Emissions Trading Scheme (ETS) for a year, in hope that the International Civil Aviation Organization (ICAO) will create a global emissions deal.
The extension would have made all international flights into and out of the EU eligible to pay the tax, but postponement means that only domestic flights will continue to participate, as they have done for most of the year.  The announcement was made following a tumultuous year for the ETS, in which both China and the USA refused compliance with the scheme.
Climate Commissioner Connie Hedegaard, said she had “stopped the clock […] as a gesture of good faith.”
She continued: “It seems that because of some countries’ dislike of our scheme, many countries are prepared to move in the [direction of] ICAO, and even to move toward a market-based mechanism at global level.”
The EU ETS was first implemented in the aviation industry from January 1, 2012, when internal EU flights were liable to pay a tax on each tonne of CO2 emitted.
Ms Hedegaard said that if no progress was made by the ICAO in time for its September 2013 annual assembly, the ETS would be reintroduced.
Airlines have estimated that the ETS would cost them €17.5 billion (US$22.3bn) by 2020.