EU to impose cap-and-trade on airlines in 2012; 85 percent allowances to be issued

The European Union (EU) issued a directive in late October to cap emissios for the airline industry operating in Europe in 2012. The cap will commence at 97 percent of the average 2004-2006 for emissions and would decrease by 5 percent per year thereafter. The airlines will receive 85 percent of their credits as a free allotment, and the remaining 15 percent will be auctioned off. Credits will be tradable under the European scheme.

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