Source · Select Committees · Environmental Audit Committee
Recommendation 23
23
Accepted
Paragraph: 158
Requiring airlines to price emissions through trading schemes is a constructive mechanism.
Conclusion
Requiring airlines to set a price on their emissions, and purchase credits for these emissions through a trading scheme, can be a constructive mechanism to ensure that the carbon cost of aviation is more adequately reflected in the cost to the consumer. This in itself may influence consumer demand for flights, depending on the availability and cost of the necessary carbon credits. Sustainable Aviation has categorised market-based measures as demand management mechanisms.
Government Response Summary
The government agrees with the mechanism described and commits to enhancing the UK ETS for aviation, including phasing out free allocation by 2026 and developing proposals for how the UK ETS should treat Sustainable Aviation Fuels (SAF).
Paragraph Reference:
158
Government Response
Accepted
HM Government
Accepted
The Government agrees with this recommendation. We are committed to enhancing the effectiveness of the UK ETS for aviation; and we will take forward the commitments in the Developing the UK ETS government response, which was published on 3 July 2023. The decision to phase-out aviation free allocation by 2026 is implemented by not extending existing free allocation arrangements for the aviation sector into the UK ETS’s 2026–2030 allocation period. Furthermore, during the current phase-out period there is a cap on the maximum amount of free allocation aircraft operators are eligible to receive per year. Regarding SAF, we will continue to develop proposals on how the UK ETS should treat the use of SAF by aircraft operators and will consult on these in due course. While SAF will continue to be zero rated under the UK ETS in the short-term, the UK ETS Authority will continue to explore alternative options to SAF being zero rated in the future. Proposals will take into account other SAF policy and incentives, as well Government’s wider objectives to support the development and use of SAF in the UK as set out in the Jet Zero Strategy.