UK Authority Set Timeline for Phasing Out Aviation-Free Allocation
17/07/2023
In a recent webinar conducted by the UK authority, key decisions were announced regarding the gradual elimination of free allocation to the aviation sector. These measures aim to enhance environmental sustainability and reduce carbon emissions in the industry. Here are the significant points discussed during the webinar:
Phase-Out of Aviation-Free Allocation by 2026:
The authority has made a decisive move to gradually eliminate the practice of providing free allocation to the aviation sector. By the beginning of the 2026 scheme year, full auctioning will be implemented, marking a significant shift in the allocation process.
Reduction of Aviation-Free Allocation Entitlement:
To align with the phased elimination of free allocation, the entitlement to aviation-free allocation will decrease annually at a fixed rate of 2.2% in both 2024 and 2025. These reductions will lead up to the complete implementation of full auctioning in 2026, ensuring a fair and market-based approach.
No Updates to Aviation-Free Allocation Methodology:
Considering the decision to phase out aviation-free allocation by 2026, the authority has chosen not to revise the aviation-free allocation methodology. Additionally, no consideration will be given to the new entrants, emphasizing a consistent approach throughout the transition period.
Cap on Aircraft Operators' Free Allocation Entitlement:
Commencing in 2024, the authority has decided to impose a cap on aircraft operators' free allocation entitlement. The maximum entitlement will be limited to 100% verified emissions. Any surplus-free allowances exceeding this cap will be returned to the authority.
Furthermore, the authority will continue to develop proposals on how sustainable aviation fuel is treated in the UK ETS (Emissions Trading Scheme) and consider whether and how aviation non-CO2 impacts should be brought within the scope of the UK ETS. The authority plans to consult on these issues in due course, highlighting their commitment to further enhancing environmental measures in aviation.
Separately, the authority will also consult on the interaction between the UK ETS and CORSIA (Carbon Offsetting and Reductions Scheme for International Aviation) in due course. This consultation aims to address the coordination and alignment of these two important schemes for carbon emissions in the aviation industry.
These decisions underscore the UK authority’s commitment to addressing climate change and reducing greenhouse gas emissions in the aviation sector. By gradually phasing out aviation-free allocation, implementing full auctioning, and promoting sustainable practices, the UK aims to foster a greener and more sustainable future for aviation.
The UK authority is anticipated to organize a webinar dedicated exclusively to the aviation sector soon.
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