Financial Times, 1 June 2005 - The European Commission said it expected aviation to be included in Europe's greenhouse gas emissions trading scheme in 2012 rather than impose a fuel tax or a levy on passengers.

Stavros Dimas, environment commissioner, said this option "appears the most probable to be approved" of three options for reining in the industry's carbon dioxide emissions associated with climate change. But because of likely political and technical obstacles, Mr Dimas expected aviation emissions to be included in 2012 rather than in 2008 when the scheme is next revised.

Airlines, commission officials and environmental campaign groups are meeting today before European Union ministers take a final decision later this year.

Next month's Group of Eight leading industrialised countries' summit at Gleneagles, Scotland, is expected to discuss possible aviation tax to finance African debt relief. In addition, Europeans and the US have been struggling to agree a joint declaration on climate change at the G8. Although negotiations with the US were still "difficult", Mr Dimas saw "some hesitant steps away from the immobile position they had before".

It would be a success if the G8 agreed a text that committed Washington to act in areas such as energy efficiency, as it was unlikely to drop its opposition to setting emission reduction targets. Mr Dimas said he hoped the trading scheme would become global and bring in non-EU countries. More industries are supposed to be brought within the EU trading scheme in 2008 but officials privately admitted it would be difficult to include, for example, the chemicals industry in the scheme by that date. In the case of aviation, the UK government, along with some airlines, has spoken out strongly in favour of emissions trading.

Peter Gammeltoft, a Commission official, said it would have little effect on ticket prices: "It does not mean the man in the street will be prevented from taking his charter holiday."

The scheme imposes a cap on how much carbon dioxide participating industries can produce but allows companies that produce less to sell excess permits to others.

Officials point to a big increase in the price of carbon dioxide allocations - yesterday down 65 cents from Friday's record high of Euros 20.30 (Dollars 25, Pounds 14) - to pronounce the scheme a success. Mr Dimas said a voluntary agreement with car manufacturers was on track to bring emissions down to 140mg of carbon dioxide per kilometre by 2008-9.

Copyright 2005 The Financial Times Limited
Financial Times (London, England)