[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 20.12.2006

SEC(2006) 1684

COMMISSION STAFF WORKING DOCUMENT Accompanying document to the

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community Impact Assessment of the inclusion of aviation activities in the scheme for greenhouse gas emission allowance trading within the Community {COM(2006) 818 final}{SEC(2006) 1685}

TABLE OF CONTENTS

1. Procedural issues and consultation of interested parties 3

2. Problem definition 6

3. Objectives 7

4. Policy options 8

5. Analysis of impacts 24

6. Comparing the options 63

7. Monitoring and evaluation 67

Annex 1: Glossary and definitions 69

Annex 2: European Council and Parliament statements on Communication 72

Annex 3: Institutions' views on the coverage of non-CO2 climate impacts 80

Annex 4: Options for treatment of domestic aviation 81

Annex 5: Summary analysis of impact on tourism 83

Annex 6: FESG traffic growth scenario used in AERO baseline 89

Annex 7: Description of models used in the analysis 90

Annex 8: Analysis underlying impacts on consumers 101

Annex 9: International travel transferring at EU hubs 103

Annex 10: Impact on remote and isolated regions 105

Annex 11: Improvements in air traffic management efficiency 112

Annex 12: The impact of aircraft on the global climate 116

Annex 13: Threshold analysis for geographical scope 1 and 3 119

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES

Background to development of the proposal

On 27 September 2005 the Commission adopted a Communication entitled " Reducing the Climate Change Impact of Aviation "[1] (in the rest of this document referred to as "the Communication"). The key conclusion drawn in the Communication was that, in view of the likely future growth in air traffic, further policies and measures are needed to address the climate impact of aviation. Having analysed a number of options, the Commission decided to pursue a new market-based instrument at Community level in preference to other financial measures such as tax and charges and considered that " …the best way forward from an economic and environmental point of view, lies in including the climate impact of the aviation sector in the [Community] scheme " . On the basis of this conclusion, the Commission announced that it intended to present a legislative proposal to this effect and invited the other Community institutions to consider the policy and design recommendations made in the Communication. Accordingly, a legislative proposal was included in the Commission's Legislative Work Programme (CLWP) for 2006[2]. The present proposal aims at implementing this key pillar of the strategy without affecting its other means of addressing climate change through a comprehensive approach based on improved technology and utilisation of aircraft (including improvements in air traffic management, research etc.)[3].

The conclusions in the Communication were reached after having carried out an extensive web consultation and in the light of a study into the feasibility of including aviation in the EU Emissions Trading Scheme (the EU ETS) carried out on behalf of the Commission (the “feasibility study”)[4]. The Communication was accompanied by an Impact Assessment (referred to in this document as the "initial impact assessment")[5], which evaluated different policy options potentially available to reduce aviation's impact on climate change. On the basis of this analysis it was concluded that, for a fixed reduction in emissions, the economic costs for the aviation sector and the EU as a whole would be lower if this reduction is achieved through the inclusion of aviation in the EU ETS than if it were achieved through the imposition of a tax or charge, or the introduction of a trading scheme for aviation alone.

This impact assessment builds upon the initial impact assessment by considering the specific design options and policy choices for including aviation in the EU ETS.

Inter-institutional process so far

European Union:

On 2 December 2005 the Environment Council of Ministers adopted conclusions[6] recognising that the inclusion of the aviation sector in the EU ETS seemed to be the best way forward and urged the Commission to bring forward a legislative proposal by the end of 2006 which is both environmentally meaningful and economically efficient. It also set out a number of preliminary guiding principles which largely mirrored the recommendations from the Commission and emphasised the need for a further detailed impact assessment. At its meeting on 15-16 December 2005[7], the European Council confirmed the key conclusions reached by the Environment Council and echoed the request for a legislative proposal accompanied by an impact assessment addressing the specific aspects requested in the conclusions of the 2 December 2005. On 21 April 2006, the European Economic and Social Committee adopted an Opinion[8] on the Communication expressing the opinion that additional policy measures are needed to control the impact of aviation on climate change and that, depending on specific design elements, inclusion of aviation in the EU ETS could be a very feasible option. On 4 July 2006, the European Parliament adopted a Resolution[9] welcoming the Communication and recognising that emissions trading has the potential to play a role as part of a comprehensive package of measures to address the climate impact of aviation, provided it is appropriately designed. It further set out detailed views on a number of issues, including aspects of the potential design of a trading scheme for aviation.

International fora:At international level, the limitation and reduction targets adopted under the Kyoto Protocol include emissions from domestic aviation but not emissions from international flights. Instead the Kyoto Protocol places an obligation on the parties to " pursue limitation or reduction of emissions of greenhouse gases…from aviation…bunker fuels, working through the International Civil Aviation Organization… ". At the sixth meeting of the ICAO Committee on Aviation Environmental Protection in 2004, it was agreed that an aviation-specific emissions trading system based on a new legal instrument under ICAO auspices "… seemed sufficiently unattractive that it should not be pursued further ". However, Resolution 35-5 of the ICAO Assembly instead endorsed open emissions trading and requested the development of non-binding guidance for use by states, as appropriate, to incorporate emissions from international aviation into their emissions trading schemes. The Commission and Member States are participating in and supporting this work which is scheduled for finalisation by ICAO in 2007. The ICAO Assembly in September 2007 will discuss this issue. In any case, this proposal is not expected to enter into force before that date. The final ICAO guidance will be taken into account, as appropriate, during the co-decision procedure. The objective of this proposal is to provide a model for aviation emissions trading that can be a point of reference for the EU's contacts with key international partners and be extended or replicated worldwide. The Commission also supports the objective of a global agreement aimed at effectively tackling aviation emissions at global level.

Stakeholder participation

The Communication was based on extensive stakeholder consultation to which 5564 citizens and 194 organisations responded[10]. However, once the decision was taken to focus on emissions trading, further considerations were needed on the detailed design options for a trading system in consultation with stakeholders. Accordingly an Aviation Working Group (AWG) was set up under the second phase of the European Climate Change Programme (ECCP II). The terms of reference for the group, as annexed to the Communication, were translated into a work plan which was approved at the stakeholder conference launching the ECCP II, held on 24 October 2005 in Brussels. The role of the group was to consider and discuss issues on which the Commission had identified a need for further expert advice. The purpose was not to take final decisions but rather to consider options and identify the advantages and disadvantages of various design and policy choices.

The Commission invited representatives and experts from Member States and key stakeholder organisations including industry, consumer and environmental organisations to participate in the working group. Additional experts were invited to meetings where their expertise was particularly relevant. The Commission chaired the meetings and acted as secretariat for the group. Before each meeting a background paper summarising relevant parts of the Communication, initial impact assessment and feasibility study was distributed and used as a common reference for the discussion. After each meeting draft minutes were circulated to the participants for comments before a final version was reached. This final report of the working group was published in April 2006 and consists of a compilation of the agreed minutes of the 4 meetings (of which the 3rd was a 2-day meeting). The final report , the agendas , background papers and presentations from each meeting are publicly available on the internet on the CIRCA website for ECCP Aviation WG[11]. Also available on this website are position papers submitted by stakeholders to complement the views recorded in the minutes.

The consultation of stakeholders was undertaken in accordance with the minimum standards for consultation set out in the Commission Communication entitled " Towards a reinforced culture of consultation and dialogue - General principles and minimum standards for consultation of interested parties by the Commission "[12].

PROBLEM DEFINITION

The rationale for Community action was analysed and explained in detail in the Communication from September 2005 and the accompanying initial impact assessment. In summary, to date, policies instituted at international, regional and national level to mitigate climate change have not required any substantial contribution from the aviation sector . While air transport accounts for about 0.6% of the EU’s value-added[13], it accounts for about 3% of the EU's direct greenhouse gas (GHG) emissions. If indirect impacts[14] such as NOx emissions are included, which produce the strong GHG ozone (O3) under the influence of sunlight, aviation's impact on the climate is even more substantial. Further policy action is needed to prevent the projected rapid future growth in air traffic from leading to continued growth in the climate impact of aviation.

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Figure1 : Development in EU (international aviation) GHG emissions (Source: EEA)

As can be seen from figure 1, GHG emissions from international aviation in the EU have grown rapidly since 1990. At the same time policy action in other sectors has led to a reduction in overall emissions from those sectors.

The latest available figures released in 2006, after the adoption of the Communication, show a further increase in emissions: In 2004 greenhouse gas emissions from EU international aviation had increased by a further 7.5% compared to 2003, resulting in an accumulated growth since 1990 of 87% . As noted in the Communication, if this trend continues, growth in the EU's international aviation emissions will offset more than a quarter of the environmental effect of the reductions required by the Community's target under the Kyoto Protocol. In the longer run, international aviation emissions would become an ever-greater contributor to the EU's total emissions. Since international aviation is not yet covered by the Kyoto Protocol, this growth currently does not have legal implications. Nonetheless, this does not detract from its environmental implications which will have to be addressed as part of any effective forward-looking climate policy.

Objectives

The overall objective remains the one identified in the initial impact assessment: to address the growing climate change impact from aviation and ensure that aviation contributes to the achievement of the Community’s overall objective of limiting the global annual mean surface temperature increase to a maximum of 2°C above pre-industrial levels. As stated in the Commission’s 1999 strategy on air transport and the environment,[15] “ [t]he long-term policy target must be to achieve improvements to the environmental performance of air transport operations that outweigh the environmental impact of growth ”.

To achieve that long-term policy target, the initial impact assessment identified a number of specific objectives :

- Including the air transport sector in efforts to mitigate climate change.

- Better internalisation of the external costs of climate change.

- Stronger incentives for air transport operators to reduce their impact on the climate.

Based on the analysis set out in the initial impact assessment, the Communication proposed a comprehensive approach to fulfil these objectives under which a number of existing policies and actions would be continued and strengthened[16]. It also outlined a strategy for complementing such action by implementing a new market-based instrument at EU level. In this respect, and having analysed a number of options, the Commission concluded that "… the best way forward, from an economic and environmental point of view, lies in including the climate impact of the aviation sector in the EU emissions trading scheme ". This conclusion was reached on the basis of assessing emissions trading on its environmental effectiveness, economic efficiency and potential for wider application. Feedback received from the other EU institutions and stakeholders generally confirmed this conclusion. The operational objective therefore is to include aviation in the EU ETS.

In terms of environmental outcome, a number of options of varying ambition have been examined for the legislative proposal. These are described in further detail below. The core basis for examining these options is the long-term goal of achieving " improvements to the environmental performance…that outweigh the environmental impact of growth ". This implies that emissions attributable to aviation will have to be de-coupled from aviation growth in order that emissions stabilisation can take place, followed by emissions reductions. The differences between the options relate mainly to how this objective is met and by whom within the aviation sector.

POLICY OPTIONS

Introduction

This section discusses the most important design parameters that together define the effectiveness, the efficiency, the consistency and the practical workability of a system to incorporate aviation into emissions trading.

In considering the specific design of an emissions trading scheme for aviation, consideration must be taken of the specific characteristics of the aviation sector and the way in which it differs from other sectors currently included in the EU ETS. These include:

- the mobile nature of the emissions sources;

- the international nature of the aviation sector;

- the total climate effect of aviation being significantly higher than the effect of its direct GHG emissions (primarily CO2 emissions) alone;

- the main trading currency under the Kyoto Protocol, Assigned Amount Units, not being granted for international aviation emissions due to their not being included in the emissions commitments.

It is also important to maintain equal treatment of operators regardless of their nationality consistent with the requirements of the Chicago Convention and to take into account lessons learned to date from the existing EU ETS. Therefore, more harmonised solutions for aviation have been considered as being more practical and desirable.

A non-regulatory approach will not be considered as the inclusion of aviation emissions in the EU ETS could not be achieved in a harmonised way without amending the legislative framework[17]. For some of the design parameters, a best option was identified and the alternatives discarded at an early stage on the basis of qualitative analysis. In these cases, the key arguments are briefly summarised below. For other parameters, a range of options were maintained throughout the analysis while at the same time identifying a set of choices as the "main variant" against which variants were compared. This approach was taken to 1) keep the number of combinations of possible options analysed manageable and 2) to make it possible to isolate the effect of a change in any single design parameter.

The list of parameters discussed below is as follows:

- Accountable entity.

- Geographical scope.

- Consideration of treatment of remote and isolated regions.

- Other delimitations of the scope (including thresholds).

- Coverage of non-CO2 emissions.

- Open or closed system (extent of integration with existing EU ETS).

- Interplay with Kyoto Protocol (lack of AAUs for international aviation).

- Treatment of domestic aviation.

- Use of credits from the Kyoto Protocol's project mechanisms.

- Overall quantity of allowances issued for aviation's climate impact.

- Method of allowance allocation and distribution.

- Treatment of new entrants and closures.

- Monitoring, reporting and verification.

- Timing aspects.

Accountable entity

Different agents could conceivably be held responsible for complying with obligations under the EU ETS in respect of aviation emissions. The feasibility study looked at the options of aircraft operators, airports, fuel suppliers, air traffic management providers and aircraft manufacturers. In the Communication, the Commission stated its view that aircraft operators should be the responsible entities as they have the most direct control over the type of aircraft in operation and the way in which they are flown. This option was also preferred by a large majority of the organisations responding to the internet stakeholder consultation[18] (receiving support from more than 5 times as many respondents as the second-most advocated option). It also received preliminary support from the Council.

Despite the broad support expressed in favour of this option, the Commission has again reviewed two of the alternative options which have continued to receive limited support: airports or fuels suppliers.

The airport option would imply that each EU airport would surrender allowances for the emissions from flights to and/or from that airport. This option would have the advantage that an airport provides a possible "point of aggregation" for the polluting activity. However, although airport managers may take certain decisions that have an influence on aircraft emissions (in particular at congested airports) they cannot directly influence investment decisions or the actual operation of aircraft and therefore do not exercise any direct control over the emissions from the aircraft operating to and from their facilities. While the economic signal that emissions trading is designed to establish could conceivably be transferred to aircraft operators via airport landing charges, defining and agreeing on sufficiently accurate and harmonised mechanisms for providing correct price signals to those actually in control could be very difficult given the wide variety of approaches to airport charging that exists in the Community. If airports failed to pass on the costs or failed to pass on the costs by reference to emissions, then the scheme would not provide the right incentives and the objective of the policy would not be achieved.

The fuel supplier option would imply putting the obligation to surrender allowances on suppliers of aircraft fuel. This option would have the advantage that there are fewer fuel suppliers than aircraft operators and therefore it might be administratively simpler to keep track of suppliers delivering fuel at EU airports. However it would represent a departure from the current EU ETS approach in which obligations are imposed on the entities with direct control over emissions. It would also risk generating incentives for tankering and limit the possibility for increased coverage of non-fuel related emissions and effects over time. Finally it would be difficult to distinguish between aircraft fuel used within the scheme and that purchased for other purposes, since fuel suppliers do not hold the information required.

On balance, the aircraft operator option is considered to be by far the most effective and practical approach. The other options listed above were therefore discarded at an early stage and the analysis of remaining design options performed on this basis.

Geographical scope

This issue concerns the types of flights which would be included in the scheme. The geographical scope will partly determine the effectiveness of the scheme in meeting its objective because the greater the geographical scope of the scheme, the greater the amount of emissions covered by the scheme and consequently the greater the reductions.

The geographical scope could be defined by reference to a number of different parameters including flight routes, airspace or parameters relating to the aircraft operator or aircraft itself.

In considering the options for the geographical scope of the scheme, as well as considering the environmental impacts and range of economic impacts, it is also important to consider the aim for the scheme to provide a model for expansion.

For mobile sources, the actual physical location of the emissions is not necessarily the best way to establish a unique link from a given source to one particular State for the purpose of defining the responsibility to report (or to control) those emissions. This has been explicitly acknowledged both in the Revised IPCC guidelines[19] and by SBSTA – the UNFCCC’s Subsidiary Body for Scientific and Technological Advice (see below). At its fourth session in December 1996, SBSTA ruled out a number of options including allocation according to emissions generated in national airspace [20]. This option has the key disadvantage that even if applied globally, it could not secure coverage of emissions emitted over the high seas. A scheme delimited based on principles which have been disqualified by SBSTA could be seen as inconsistent with the UNFCCC, and thus with ICAO policy which only supports integrated trading " consistent with the UNFCCC process ". An airspace-based approach was therefore ruled out at an early stage.

Among the remaining options a route-based approach (defined on the basis of country of departure and/or destination) is most simple and workable. The ECCP Aviation Working Group advised the Commission to focus on three options . Two of these were considered in the feasibility study, and one (the third listed below) was put forward in subsequent discussions by low-cost air carriers and by environmental NGOs:

1. Intra-EU flights only.

2. All flights departing EU airports.

3. All flights arriving at and all flights departing from EU airports.

As a consequence of ruling out an airspace-based approach, a fourth option representing option (3) plus emissions from aircraft that fly through EU airspace without stopping has been discarded. In any case, emissions from these "over-flights" are relatively speaking very low, whilst the complexity of accurately monitoring emissions from aircraft flying through EU airspace would be relatively high. In addition, an incentive would be introduced to avoid EU airspace, thereby increasing fuel burn and CO2 emissions for certain flights where such deviations could become attractive. In summary, the costs from including over-flights would far outweigh the environmental benefits and so their inclusion has not been further analysed in this impact assessment.

In the Communication, the Commission indicated that from an environmental perspective the preferred option would be for the scheme to cover emissions from all flights departing from EU airports. This was reflected in the preliminary guiding principles set out by the Council in its conclusions of December 2005. The European Parliament expressed a preference for option 3. The different implications of the choice among these options are further examined in section 5.

Consideration of treatment of remote and isolated regions

In considering the options for the scope it is also necessary to consider how this would be applied to the most isolated and remote areas of the EU. The Council Conclusions urged the Commission to include in its impact assessment " analysis of the effects of the inclusion of the aviation sector on the diversity of situations in various regions of the Community including islands, the Outermost Regions and the Overseas Countries and Territories ". The European Parliament also asked " that special attention be paid to the situation of the most isolated territories which are particularly dependent on air transport services, and especially to insular or outermost regions, where alternative solutions are limited, or do not exist. " These views were also reflected in the Aviation Working Group.

"Overseas countries and territories" (OCTs) are a group of islands and areas which are associated with the Community in accordance with Part 4 of the EC Treaty, but to which the EC Treaty in its entirety is not directly applicable. The proposed measure would therefore not apply to the Overseas Countries and Territories.

As regards the "outermost regions" (also known as "ultra-peripheral" regions or UPRs, namely the French overseas departments, the Azores, Madeira and the Canary Islands), Article 299(2) of the Treaty recognises the special position of these regions by reason of their " structural social and economic situation … which is compounded by their remoteness, insularity, small size, difficult topography and climate, economic dependence on a few products, the permanence and combination of which severely restrain their development ". It also provides for the possibility of adopting " …specific measures aimed, in particular, at laying down the conditions of application of the present Treaty to those regions… ". Concern has been expressed about the impacts on such areas if flights to these regions are included in the scheme whilst flights to neighbouring islands are not included. This special position and the fact that UPRs constitute a short, well-defined list of territories means an option for consideration could be to treat them as if they were third countries for the purpose of the scheme.

In addition, arguments have been made about the need to consider the special situation of other islands or areas disadvantaged in terms of their dependence on, or incapacity to secure provision of, air transport services.

In summary, the following options have been considered:

4. Make no special provision for any type of regions.

5. Make special provisions for outermost regions defined in Article 299(2) of the Treaty.

6. Define further types of regions for which special provisions could be made.

Other delimitations of the scope (including thresholds)

In addition to defining the geographical scope of the scheme, it is also necessary to consider whether other exclusions and thresholds should be applied. These might be used to exclude particular types of flights which it may not be appropriate to cover or for which the administrative costs of inclusion would be disproportionate to the environmental benefits achieved.

In the Aviation Working Group, there was general agreement that military and other types of State aircraft[21] should be excluded from the scheme. This reflects the fact that the Chicago Convention does not apply to such flights and flights by state aircraft are largely excluded from en-route charges. The vast majority of EC legislation regulating the internal air transport market applies only to civil aircraft which represent by far the biggest share of aviation emissions. It was therefore at an early stage decided to exclude flights by State aircraft from the scheme .

In the Aviation Working Group there was also general agreement that flights performed exclusively under Visual Flight Rules (VFR), as opposed to Instrument Flight Rules (IFR)[22], should be excluded. Emissions from such flights amount to a very small percentage of total emissions from aviation and as Eurocontrol does not keep data on such flights it would be difficult to cross-check emissions reported for such flights. It was therefore decided at an early stage to exclude flights under VFR from the scheme.

The Aviation Working Group further discussed the option of excluding flights for testing navigation equipment or for training purposes . These types of flights are infrequent and produce a very small percentage of total aviation emissions. They are also largely excluded from en-route charges. Similar reasoning could be applied to circular flights , i.e. flights which take-off and land at the same airport without intermediate stops, the inclusion of which could add considerable complexity to any benchmarking system used for calculating the allocation of allowances given that the distance between origin and destination would be zero. It was therefore decided to exclude flights for testing navigation equipment or for training purposes and circular flights.

In addition to these exclusions, it may also be necessary to have additional limitations in order to ensure that the administrative burden of the scheme, both for aircraft operators and regulators, is not disproportionate. Such exclusions could be applied at the level of the aircraft size (expressed in terms of aircraft weight threshold and/or a maximum certified passenger capacity). This option has been analysed in further detail as described in section 5.

Coverage of non-CO 2 emissions

Aviation's impact on the climate is higher than the effect of its direct GHG emissions (essentially those of CO2), because a number of indirect effects also play an important role. Scientific research indicates that the non-GHG effects of most concern are NO x emissions (because they are particularly strong precursors for ozone – a greenhouse gas – when emitted at altitude), and the effects due to potential enhancement of cirrus cloud coverage (triggered by contrail formation and other emissions of particles around which water in the atmosphere can condensate – for more details see annex 12).

At an aggregate level the Intergovernmental Panel on Climate Change (IPCC) has estimated that the total impact of aviation currently is about 2 to 4 times higher than the effect stemming from its past CO2 emissions alone. Recent EU research results indicate that this ratio may be closer to double the impact. These estimates do not take into account the highly uncertain but potentially very significant cirrus cloud effects.

The Kyoto Protocol, and likewise the EU ETS, compares the potency of different GHGs using the metric Global Warming Potential (GWP). However, GWPs have not been defined for aviation's indirect warming effects, nor have alternative metrics, so there is currently no scientific consensus on how to compare the marginal/additional climate impact of these effects with the effects attributed to a marginal/additional emission of a greenhouse gas such as CO2.

In the Communication the Commission stated the view that "… both the CO 2 and non-CO 2 impacts of aviation should be addressed to the extent possible " but that " [p]ending scientific progress in developing more suitable metrics for comparing the different impacts, a pragmatic approach would be needed" and that in the short term, "… this could be based either on:

- a requirement for aviation to surrender a number of allowances corresponding to its CO2 emissions multiplied by a precautionary average factor reflecting other impacts; or

- an approach where initially only CO2 is included, but ancillary instruments are implemented in parallel such as differentiation of airport charges according to NOx emissions."

The views expressed on these issues by the Council, the European Parliament and the EESC are summarised in Annex 2.

The Aviation Working Group considered the issue in great detail but did not reach full agreement on which approach was preferable. There was general consensus that many measures to reduce CO2, at least in the relatively short-term, would also result in lower emissions of NOx (examples include technological measures such as the use of lighter aircraft construction materials and more aerodynamic aircraft designs, and operational measures such as flying more slowly and reducing holding over airports).

An implication of this is that in the shorter term, a system providing incentives only with respect to CO2 emissions would also imply reductions of NOx emissions. However, in the medium-to-long term , potential trade-offs between NOx and CO2 exist with respect to design of new engines and combustors. If a market-valuation of CO2 was not combined with a price signal valuing NOx reductions, engine manufacturers and their customers, airlines, would be likely to prioritise reductions in CO2 (and fuel consumption) exclusively as long as the ICAO NOx minimum standards can be met.

The two options above have been considered in further detail in the analysis.

Open or closed system

The Communication concluded that " …the best way forward, from an economic and environmental point of view, lies in including the climate impact of the aviation sector in the EU emissions trading scheme ". This envisaged an open system under which all sectors covered by the scheme would collectively need to meet the emission reduction goal. The equilibrium market price would then reflect their combined marginal abatement cost of meeting that goal.

An alternative to including aviation in the existing EU ETS would be to develop a separate emissions trading scheme for aviation (a closed system). This approach was advocated by the European Parliament in its resolution, at least during the second phase of the EU ETS (2008-12). Under this approach, aviation would need to meet the emission reduction goal on its own. This means that the equilibrium market price would reflect aviation's marginal abatement cost of meeting the goal.

Whilst the Commission strongly favours the creation of an open trading scheme, in section 5 modelling has been done to demonstrate the impacts of a closed system.

Interplay with Kyoto Protocol (absence of AAUs for international aviation)

From the second phase of the EU ETS, which runs from 2008-2012, Commission Regulation 2216/2004/EC ("the Registries Regulation") provides for allowances in the EU ETS to be created from Assigned Amount Units (AAUs being the main international currency provided for under the Kyoto Protocol). Allowances will be created by adding an allowance identifier to an AAU. The effect of this is that every time an allowance is transferred between two accounts in the registries system, an AAU is simultaneously transferred. The transfer of the allowance enables the operator to emit an additional tonne of CO2 under the EU ETS and the transfer of the AAU ensures that the Member State is able to emit an additional tonne of CO2 in accordance with the Kyoto Protocol.

This approach creates a difficulty for the inclusion of aviation in the EU ETS because international aviation (including flights between Member States) is not included in the targets under the Kyoto Protocol or Decision 2002/358/EC (the "burden sharing agreement"). Member States will not therefore hold AAUs in respect of international aviation.

The position is different for domestic aviation which is included in the targets. AAUs will be issued in respect of emissions from domestic aviation and Member States will be required to retire AAUs to cover such emissions (see section 4.9 below).

Both the Communication and the Council conclusions of December 2005 recognised that " the inclusion of aviation should not adversely affect the accounting system established by Commission Regulation (EC) No 2216/2004 to ensure consistency between trading under the EU ETS and trading under the Kyoto Protocol " .

The feasibility study and the Aviation Working Group considered a number of options for dealing with the interaction between the EU ETS and the Kyoto Protocol, namely extending the scope of the Kyoto Protocol, borrowing AAUs from sectors not covered by the EU ETS, no allocation of allowances to the aviation sector, obligations to surrender allowances for emissions growth above a certain baseline, semi-open trading for aviation and a gateway mechanism.

The AWG considered that the option of extending the Kyoto Protocol was only an option in the longer term. The option where no allocations are made to the aviation sector would increase the pressure on other EU ETS sectors as the aviation sector would have to buy allowances to cover all its emissions from other sectors in the EU ETS without a corresponding increase in the amount of allowances available. A system in which aviation was only required to surrender allowances above a baseline would provide no incentive to reduce emissions below the baseline. The semi-open trading option placed a blanket restriction on aviation selling allowances to the rest of the EU ETS which was felt to be overly limiting. A borrowing system would require allowances issued to the aviation sector to be backed by AAUs borrowed from those held by Member States to cover emissions from sectors which are not included in the EU ETS. Member States indicated this option was unlikely to be acceptable for Member States, and it would increase the complexity of the scheme because rules for borrowing and returning AAUs would have to be agreed and applied.

The single remaining option plus a new option have therefore been shortlisted:

7. Open trading with surrender restriction: under this option two types of allowances would be created: aviation allowances allocated to the aviation sector and allowances allocated to other EU ETS sectors. Both types of allowances can be traded freely. Aviation operators would be permitted to surrender both types of allowances but operators from other sectors would not be permitted to surrender aviation allowances.

8. Gateway: under a gateway system there would also be two types of allowances as above. The selling of allowances from the aviation sector to the core-EU ETS sectors would be limited to ensure that there is no net transfer of allowances from the aviation sector to the core-EU ETS.

The first option does not place any restrictions on trading in the market. The only restriction made is on the point of surrender. The price of an aviation allowance should follow the price of a normal allowance unless the aviation sector receives an over-allocation of allowances. This is because i) both types of allowances are in demand by the aviation sector and ii) anyone will be able to trade both types of allowances. As a result, arbitrage in the market should move to ensure that the price of an aviation allowance is the same as that of a normal allowance. The second option does place restrictions on trading in the market through a gateway system. Here, in theory, the price of an aviation allowance should follow the price of a normal allowance unless the aviation sector receives an over-allocation of allowances, in which case the gateway would close and the market would be split into two. However, the risk that a gateway system can close in an unpredictable fashion, thereby preventing the settlement of a trade through the transfer of allowances, would be expected to inhibit trading, and as such it is less likely that arbitrage in the market would move to ensure that the price of an aviation allowance is the same as that of a normal allowance.

As a result, avoiding any restrictions on trading, and thereby avoiding the creation of market barriers, is a primary consideration. In this context, the first option is preferred. Secondly, the first option is simpler and therefore cheaper to implement through a registries system linking up a different IT system for each Member State. Therefore, the Commission has concluded that an open system with the single restriction that non-aviation operators cannot surrender aviation allowances is the most effective system.

In addition, the proposal allows aircraft operators to request the Member State administering their participation in the EU ETS for aviation allowances to be exchanged for normal allowances. This exchange would use AAUs issued to that Member State to cover emissions from sectors which are not included in the EU ETS. Since this provision only increases the number of normal allowances, it does not raise issues of compatibility between the Kyoto Protocol and the EU ETS.

Treatment of domestic aviation

In view of the fact that domestic aviation emissions are included in targets under the Kyoto Protocol whereas international aviation emissions are not, there is a question as to whether domestic and international aviation should be treated differently under an emissions trading scheme.

Options are:

- Treat domestic and international aviation in the same way.

- Treat domestic aviation in the same way as existing sectors in the EU ETS through the national allocation plan process either determined by each Member State at its discretion or based on a harmonised EU methodology.

- Exclude domestic aviation emissions from the scheme.

At an early stage the Commission considered that domestic and international aviation emissions should be treated in the same way and that the trading currency allocated in respect of domestic and international aviation emissions should be the same. Consistent treatment of international and domestic operations makes sense from an operator's perspective and was supported by most participants in the Aviation Working Group on the basis that any difference in treatment could create distortions in competition. ICAO policy on market-based measures also recommends that Contracting States strive to take action in a consistent manner for both domestic and international emissions. The reasons for this decision are set out in further detail in Annex 4.

Use of credits from the Kyoto Protocol's project mechanisms

In principle, the aviation sector should be able to surrender project credits for compliance purposes from the Kyoto Protocol’s project mechanisms: Joint Implementation (JI) and the Clean Development Mechanism (CDM). So far as possible this should be consistent with the use of such credits permitted under the existing EU ETS. Under the existing scheme, installations are allowed to use project credits subject to a limit set by Member States in their national allocation plans (NAPs). In order to ensure that there is no discrimination between aircraft operators, there is a need for a harmonised approach in relation to aviation. This could be achieved by setting a limit for use representing the average of the limits imposed by Member States in their NAPs for the period.

The analysis in section 5 therefore considers two options:

- The use of project credits subject to a limit representing the average of the limits imposed by Member States in their national allocation plans.

- Unlimited access to project credits.

Overall quantity of allowances issued to aircraft operators

The emission reduction goal for the EU ETS is defined through the total quantity of CO2 allowed to be emitted. This is implemented through the total quantity of allowances allocated, each allowance representing a single tonne of CO2. Incorporating aviation into the EU ETS means that the sector will receive a quantity of allowances representing its individual emission reduction goal, which can be altered through trading.

In evaluating possible emission reduction goals for the aviation sector, the Commission has considered the possibility of two theoretical scenarios occurring beyond 2012:

9. "Kyoto Protocol freeze scenario": under this scenario, the assumption is that the international community does not agree upon a post-2012 climate change agreement. The EU ETS emission reduction goal between 2013 and 2030 therefore remains at the level set for the 2008-2012 period. Since the 2008-2012 emission reduction goal has not yet been fully established through the system of national allocation plans, an assumption would be made based on two factors: the requirement for the sectors covered by the EU ETS to make a proportionate effort towards Member States meeting their Kyoto Protocol commitments and the requirement for the 2008-2012 emission reduction goal to take account of aggregate 2005 verified emissions figures[23]. For the sectors not covered by the EU ETS, the policies and measures put in place to reduce greenhouse gas emissions in order to achieve the Kyoto Protocol target would also be assumed to continue between 2013 and 2030.

10. "Post-2012 agreement scenario": under this scenario, the assumption is that the international community agrees upon a post-2012 climate change agreement which sets emission reduction goals consistent with limiting global annual mean surface temperature increases to 2°C above pre-industrial levels. In this context, the European Council[24] has stated that "without prejudging new approaches for differentiation between parties in a future fair and flexible framework [...] reduction pathways for the group of developed countries in the order of 15-30% by 2020, compared to the baseline envisaged in the Kyoto Protocol [...] should be considered" . Therefore, all sectors of the economy, both within and outside of the EU ETS, would have an emission reduction goal lying midway between 15-30% by 2020. For the purposes of modelling out to 2030, further emission reductions would be undertaken at the same linear rate between 2020 and 2030.

This impact assessment concentrates on the "Kyoto Protocol freeze scenario" being the background scenario for establishing an emission reduction goal for the aviation sector. Looking at the emission reduction goals established for the existing EU ETS sectors under this scenario for both the first period (2005-7) and the second period (2008-12) onwards, the emissions caps are driving emissions to stabilise at, and then fall below, 1990 levels. However, data submitted under the UNFCCC shows that emissions from international aviation grew by 87% between 1990 and 2004. Data from Eurocontrol indicates that emissions increased again between 2004 and 2005 by 4.2%. Therefore, requiring aviation to stabilise its emissions close to 1990 levels would be a challenging task. In this context, the Commission has assumed an emission reduction goal for the aviation sector which requires it to stabilise its emissions at a level for which the most recent emissions data is available: 2005 levels. Hence an emissions cap at 2005 emissions levels is used throughout the modelling explained in section 5 of this impact assessment.

A consistent and accurate data set for aviation is available going further back in time than that available for the existing EU ETS sectors. Therefore, in order to take account of any concern regarding taking a single year of emissions data from a trend line in order to set an emissions cap, the mean average emissions data figure from the years 2004-2005-2006 has been used in the legislative proposal itself.

A possible option at this point would have been to divide the total emissions cap set at 2005 emissions levels for the EU-25 into 25 Member State caps. However, this would mean that, even with a harmonised method of allowance allocation (see section 4.12 below), two aircraft operators with exactly the same operations in two different countries might receive different quantities of allowances. The aviation sector to date has strongly supported a single EU-25 cap being directly distributed in a harmonised manner in order to avoid this situation occurring. Moreover, a harmonised approach will ensure equal treatment of operators regardless of their nationality consistent with the requirements of the Chicago Convention. This would not be the case if an EU-25 cap was divided into 25 Member State caps. Therefore, the Commission has proposed a single EU-25 cap.

Method of allowance allocation and distribution

An allowance allocation methodology encompasses two different factors: firstly, whether allowances are issued against payment or granted for free, and secondly, how allowances granted for free are distributed amongst the entities covered by a scheme.

The following options were explored in the feasibility study and then discussed by stakeholders within the Aviation Working Group and in other fora: no allocation (no allowances granted so all emissions must be covered by purchasing allowances on the market), auctioning (allowances issued against payment), grandfathering (allowances granted for free and distributed according to historic emissions data), and benchmarking (allowances granted for free and distributed according to an efficiency parameter).

A majority of stakeholders did not support the "no allocation" option because it would treat the aviation sector differently from those sectors already covered by the EU ETS. Additionally, as mentioned in section 4.8, it would increase the pressure on other EU ETS sectors as the aviation sector would have to buy allowances to cover all its emissions from other sectors in the EU ETS without a corresponding increase in the amount of allowances available. The "grandfathering" option was also criticised by a majority of stakeholders because it can be seen as rewarding the polluter, does not always favour early action (and can even incentivise a delay in the introduction of measures to reduce emissions), and is economically less efficient.

To date, grandfathering has been used reasonably widely as an allocation methodology for the sectors already covered by the EU ETS. However, one of the main reasons for this wide usage has been that Member States have lacked the sometimes extensive data requirements for implementing the other main methodology for granting allowances for free: benchmarking. For the aviation sector, the data requirements are fewer due to the relative mechanical homogeneity of carrying passengers or freight between two airports.

Therefore, the Commission has chosen not to further consider the "no allocation" or "grandfathering" options for the aviation sector, but to concentrate upon the "auctioning" and "benchmarking" options.

Treatment of new entrants and closures

Any methodology for allocating allowances for free can only upfront calculate specific quantities of allowances for incumbent companies, because only these exist. However, in any market there is some degree of change since new companies can establish themselves either in place of, or in addition to, incumbent companies, whilst incumbent companies sometimes close. Therefore, one of the design choices for incorporating aviation into the EU ETS is how to treat new entrants and closures.

To guarantee equal treatment of aircraft operators, new entrants and closures within the aviation sector must also receive consistent treatment. This means that the current system for new entrants and closures for sectors already covered by the EU ETS, where the rules can differ from country to country, cannot be applied to the aviation sector.

Guidance on allocation issued by the Commission in 2004[25] stated that: "A Member State has at least three options to enable participation of new entrants: it may have any new entrants buy all allowances on the market, it may make use of the possibility to set aside some allowances for periodic auctioning, or it may foresee a reserve in the national allocation plan to issue allowances to new entrants to free of charge" . This guidance also noted that each of these three options is consistent with the principle of equal treatment of new entrants vis-à-vis incumbents.

In determining how to treat new entrants and closures in a consistent manner within the aviation sector, the Commission has looked in detail at each of the above three options and explored the practical issues raised by applying these to the aviation sector.

11. New entrants buying allowances on the market: It is always possible for new entrants or incumbents to cover emissions through purchasing allowances from the market. However, this option would not foresee withholding any proportion of the total quantity of allowances for new entrants in order to provide an additional option for sourcing allowances. This means that the entire total allocation would be received by incumbents. It is possible that new entrants may perceive this as unfair. Regarding closures, the corollary of this option is that allowances are kept on closure up to the end of a period, but no further allocation would be made for the next period.

12. New entrants buying allowances through an auction: This option would foresee the withholding of a proportion of the total quantity of allowances in order that new entrants and incumbents have an additional source for purchasing allowances to cover emissions which is through an auction. Regarding closures, the corollary of this option is that allowances are kept on closure up to the end of a period, but no further allocation would be made for the next period.

13. New entrants receiving an allocation through a reserve: Under this option, the additional source of allowances is a proportion of the total quantity being set aside as a new entrant reserve which is accessible only by new entrants and not by incumbents. Managing a new entrant reserve means addressing the following points: how to define new entrants and closures, how to determine the size of a reserve, how to allocate allowances out of the reserve when no historic data for a new operator is available, and how to deal with any remaining allowances in a reserve at the end of the period.

14. A particular difficulty would be how to define a new entrant in the aviation sector. For the sectors already covered by the EU ETS, a new entrant is defined as a new installation, or a substantially changed/extended installation. The existence of such a change is recognised by the issue of a new regulatory permit or the update of an existing permit. This installation-based concept cannot be translated directly to the aviation sector. Due to individual aircraft being able to move in and out of the scope of the scheme and new aircraft commonly being added or used on different routes, a new entrant system focusing on aircraft would simply not work.

15. A new entrant within the aviation sector might alternatively be defined as a new route within the covered geographical boundaries of the scheme. However, the opening and closing of routes is a relatively fluid part of the aviation industry. This means that managing a new entrant reserve operating on this basis would be expected to increase the complexity of the scheme and lead to high administrative costs both for the operators and the regulators.

16. Finally, an alternative concept might be to define a new entrant as a new operator. If a new operator is undertaking commercial operations, then the granting of an Air Operating Certificate (AOC) could become the basis for managing a new entrant reserve. However, there is not always a clear link between new aircraft operators and new aircraft activity. For example, for business restructuring purposes, an existing aircraft operator could be re-defined as being two different aircraft operators. Furthermore, not all aircraft operators covered by the EU ETS are undertaking commercial operations. Therefore a further metric would need to be developed for non-commercial operations.

After considering all of the above arguments, the Commission has concluded that operating a new entrant reserve for the aviation sector is neither practicable nor cost-effective. However the Commission recognises that a source of allowances additional to purchasing on the market could be helpful to both new entrants and incumbents. Therefore, the option contained within the legislative proposal is that new entrants can purchase allowances through an auction or via the market. From the point of view of a new entrant, this is only a temporary measure: new entrants will be able to apply for an allocation of allowances as incumbents when allowances for the subsequent period are allocated.

Monitoring, reporting and verification

The ECCP Aviation Working Group considered possible approaches for monitoring, reporting and verification of emissions.

There was general agreement in the group that reporting of actual fuel use by airlines would be the most accurate method and that it would provide the broadest possible range of incentives to implement reduction measures including operational measures. Representatives of airlines confirmed that major airlines already collect detailed data for internal purposes and the experience from the UK emissions trading scheme demonstrated that operators have access to accurate fuel and operational data. While concern was expressed that smaller airlines may not currently have the systems in place to provide actual data on a flight by flight basis, the Association of European Airlines indicated its support for the use of actual data and explained that this position had been also agreed by its smaller members knowing that it would require them to put in place additional procedures. In fact, fuel consumption is already monitored and recorded routinely for safety purposes and financial reasons. Where actual fuel data is not available a standardised tiered method could be used to estimate emissions. All participants agreed that if the future rules made recourse to estimated data as a lower tier e.g. in cases where operators have failed to submit data, such estimates should be conservative (higher than actual consumption) to prevent operators from gaining by using low estimation methods. This would also provide an incentive for all operators to put in place adequate and accurate monitoring systems.

Concerning emission factors, there was wide agreement that emissions factors are not a complex issue in the aviation sector as the fuel used is relatively homogenous compared to many other industries including some of those already subject to the EU ETS. However, as is the case in the current EU ETS, the emission factors used should be able to vary according to the net CO2 content to stimulate the use of low carbon fuels. For this purpose, the emission factor for fuel produced from biomass will be zero.

Timing aspects

As highlighted above, aviation emissions are growing fast and therefore measures to reduce the climate change impact of aviation should in principle be introduced as soon as possible. The main issue of relevance for determining when aviation can enter emissions trading is the time required to implement the scheme.

The point at which it would be practically feasible to expect different obligations established by the scheme to enter into force depends on the time needed to a) complete the co-decision process b) complete the transposition and implementation process c) collect and verify data necessary for determining the distribution of allowances to the aviation sector. To provide certainty for aircraft operators and the wider market, decisions on allocation should take place at least 12 months in advance of the beginning of the first period for which operators need to surrender allowances. As indicated in the table below, the earliest year in which the scheme could start is 2010, and the earliest year when caps could be applied is 2011.

Process | Minimum time required | Realistic start/end |

Co-decision; national implementation | 1-2 years | 2007/2008 |

Reporting, verifying and collating benchmark data; calculating and deciding allocations | 3 years | Jan. 2008/Dec. 2010 |

First calendar year with data reporting obligations in effect | 1 year | 2010 |

Lead-time for allocations to be known before caps take effect | 1 year | Jan. 2010 |

First year of caps in effect | n.a. | Jan. 2011 |

Table 1: Outline of possible timetable required for implementation

In conclusion, the options for entry into force will depend on timely progress in the co-decision procedure, but the earliest realistic outlook seems to be a scheme starting in 2010, with reporting obligations taking effect as from 2010 and emission caps taking effect from 2011 onwards.

ANALYSIS OF IMPACTS

Introduction

Structure of the approach and presentation of impacts

This section presents analysis of the impacts of the various options for the design of the scheme that have been presented in section 4. Here, a "main variant" scenario has been defined and the impacts arising from the main variant will be described in the sections 5.2 and 5.3. The impacts of each of the alternative options will be addressed one by one in section 5.4.

Design parameter | Main variant | Alternatives |

Geographical scope | All departing flights | Intra-EU flights only All departing and all arriving flights |

Coverage of non-CO2 impacts | CO2 in EU ETS, other impacts addressed by specific measures | Multiplier of 2 on monitored CO2 emissions as proxy for internalising external costs from other effects |

Allowance allocation | 20%/40% auctioning in 1st/2nd period, remainder allocated free of charge | Consideration of different benchmarking parameters Different degrees of auctioning |

Aircraft size threshold | Exclude aircraft with MTOW<20.000 kg | Various alternative MTOW values and combinations with max certified passenger capacity limit of 19 |

Amount of allowances issued (cap) | Stabilisation at 2005 levels | Considerations of different levels of access to JI/CDM |

Treatment of remote and isolated regions | Treat outermost regions defined in Article 299(2) as third countries | No special treatment Define further types of regions for which special condition be made |

Sensitivity analysis parameter | Main analysis | Alternative assumption |

Aviation baseline emissions | AERO baseline based on ICAO FESG traffic scenario and 1% annual ATM improvements in 2013-2019 | Low aviation emissions growth scenario calculated by PRIMES on basis of traffic data from mid-term review of common transport policy white paper. |

Methodologies used

The analysis undertaken has required the use of a number of models as no single model exists that would be capable of assessing all aspects of incorporating aviation in the EU ETS.

Therefore, three formal models – AERO, PRIMES and TREMOVE - have been used. AERO is an aviation-specific model used to quantify any economic and environmental impacts of possible measures related to the air transport system. This model was used for the preliminary impact assessment underlying the Communication of September 2005 as well as for the feasibility study, and has also been used within ICAO. The geographical coverage of the AERO model for this exercise was the EU-25, Bulgaria, Romania, Norway, Iceland and Liechtenstein (coverage of the EU ETS from 2008 onwards). PRIMES is a modelling system that simulates a market equilibrium solution for energy supply and demand in the EU-25. This model is used across the Commission in order to quantify any impact of possible measures related to the EU's energy markets, and therefore has long been used in impact assessments supporting proposals related to the EU ETS. Finally, TREMOVE is a transport and emissions simulation model developed for the European Commission. It is designed to study the effects of different transport and environment policies on the emissions of the whole transport sector. The geographical coverage of the TREMOVE model is the EU-15, Czech Republic, Hungary, Poland and Slovenia. For this impact assessment, new modelling runs were undertaken in all three models. A short description of the models and references to their documentation is given in Annex 6.

In addition to the modelling work described above, a significant amount of air-traffic analysis has been performed, notably on the basis of data provided by Eurocontrol, the European Organisation for the Safety of Air Navigation. As central manager of the air traffic flow in Europe, Eurocontrol is in possession of a unique source of data which can be used to estimate the environmental impacts of aircraft operations in the area for which Eurocontrol is responsible for the reception, validation and subsequent distribution of flight plan messages. Every flight is recorded with planned or actual trajectory, aircraft type etc. Combined with the AERO, PRIMES and TREMOVE models, this kind of data can be used to produce consistent and high-quality estimates of, for instance, greenhouse gas emissions. The basic data used are the “flight plans” submitted by aircraft operators to Eurocontrol[26]. For most parts of the analysis, Eurocontrol estimates for flights to/from the EU25 (excluding UPRs), Bulgaria, Romania, Norway and Iceland have been used.

Finally, the results of the AERO model were compared to similar simulations made by a new aviation module to the POLES[27] under development by the Institute for Prospective Technological Studies (IPTS) of the Commission's Joint Research Centre (JRC). The comparison showed that the results of the POLES model were very much in agreement with the results of the AERO model which indicated that the conclusions based on the AERO model were not model dependent.

Clearly, the equilibrium allowance price in the EU ETS is a critical input for many parts of this impact assessment. As described in further detail in section 5.3.5 below, a number of scenarios within PRIMES have been run, making different assumptions most crucially regarding access for all operators to Joint Implementation and Clean Development Mechanism project credits. These model runs give a range of possible equilibrium allowance prices. Rather than use this entire range within the AERO and TREMOVE models, which could complicate understanding the results, instead a value from the lower end of the PRIMES results (equilibrium allowance price of €6) and a value from the higher end of the PRIMES results (equilibrium allowance price of €30) have been used for these model runs.

Environmental impacts

Greenhouse gas emissions from aviation and the EU ETS sectors

The environmental effect of an emissions trading scheme is directly dependent on the cap, since this corresponds to the number of allowances issued. Thus, the more allowances issued, the smaller the environmental impact is and vice-versa.

For a given cap the GHG reductions that can be expected depend on the assumptions in the alternative scenario , i.e. what would have happened if the cap had not been introduced. In the present case the reductions therefore depend on the assumptions about the growth of emissions in the business-as-usual scenario. In the analysis, direct emissions of greenhouse gases other than CO2 (i.e. methane: CH4 and nitrous oxide: N2O) have not been assessed since they are negligible. The effects of non-GHG impacts are discussed in section 5.2.2.

The main modelling scenarios assume a baseline growth of aviation emissions with average growth rates as presented in table 2.

Average growth rates of emissions |

2005 – 2010 | 2010 - 2015 | 2015 - 2020 |

Intra EEA flights | 5,1% | 3,9% | 3,1% |

All departing flights from the EEA | 5,2% | 3,9% | 3,3% |

Table 2: Emissions growth in FESG baseline scenario

The baseline growth in CO2 emissions was computed by the AERO model on the basis of a set of assumptions about traffic growth produced by ICAO's Forecasting and Economic Analysis Support Group (FESG). These underlying traffic growth assumptions are presented in Annex 5. The PRIMES model's baseline for growth in aviation emissions was adjusted to follow this scenario as closely as possible.

This FESG scenario forecasts passenger-kilometres for the global aviation industry (thus including a forecast for routes to, from and within Europe). It is supplemented with assumptions regarding the baseline developments of aircraft technology (especially assumptions regarding fuel efficiency improvement are relevant). Furthermore for the period 2013-2019 an air-traffic management (ATM) efficiency improvement of 1% per year is assumed[28].

The expected CO2 reductions attributable to the cap on aviation emissions depend - in addition to the cap itself and the baseline growth assumptions – also on the geographical scope considered. The table below gives an overview of the absolute and percentage annual GHG reductions under the different scenarios considered. As would be expected for a given percentage reduction linked to historical emissions, the reduction increases the wider the scheme is.

Geographical coverage | Reduction by 2015 | Reduction by 2020 |

% | Mt CO2 | % | Mt CO2 |

Intra EU flights | 36% | 31 | 45% | 44 |

EU - All departing flights | 36% | 77 | 46% | 115 |

EU - All arriving and all departing flights | 36% | 122 | 46% | 183 |

Table3: Absolute and percentage annual reductions: stabilisation at 2005 emissions levels compared to business-as-usual emissions levels

The exact extent to which the CO2 reductions required by the cap are actually made by the aviation sector, or are made by other sectors already covered by the EU ETS, is explored in section 5.3.5. However, the environmental benefits from CO2 reductions are accrued irrespective of which sector or company undertakes the emission reductions.

Other environmental and health impacts

Apart from the environmental benefits from CO2 emission reductions quantified in section 5.2.1 above, some other environmental and health benefits may occur. These benefits broadly fall in the following categories:

17. Impacts from changes in air transport volumes.

18. Impacts from changes in air transport technologies.

19. Impacts from other modes of transport substituting air transport.

20. Impacts on public health.

It is not possible to assess the net effect of all these possible changes reliably in quantitative terms, but each of the categories are discussed qualitatively below.

Impacts from changes in air transport volumes:

The modelling in section 5.3.1 shows that even assuming a full pass through of EU ETS compliance costs onto air transport users, this will only have a modest effect on transport demand and thus traffic, compared to business as usual growth. Other things being equal, this will still lead to some reductions in other nuisances associated with aviation, notably noise around airports and emissions of other substances such as NOx which affect local air quality. However, since the effect on transport demand is very limited, the improvement in other nuisances will also be modest and to some extent offset by increases in other modes of transport – see section 5.3.4. For the "all departing flights" scenario and an allowance price of €30, AERO forecasts a reduction of around 2% of CO2 emissions compared to business-as-usual emissions of around 1 million tonnes, corresponding to some 20,000 tonnes of NOx.

Impacts from changes in air transport technologies and operations:

In the short to medium term , aircraft operators have a range of - mostly operational - means of optimising their operations and fleet taking into account the additional price signal provided by the EU ETS[29]. Apart from measures such as replacing engines or retrofitting new engine combustors which tend to be difficult to justify economically, most other short term measures aimed at reducing CO2 emissions will also reduce other impacts such as NOx emissions. An example is the retrofit of winglets[30], which reduce drag and therefore also reduce both fuel burn and NOx emissions.

In the longer term , fleet renewal and changes in engine and combustor designs are of greater importance for the overall impacts in particular concerning NOx emissions and noise. Aircraft and engine design are characterised by trade-offs between different performance parameters. To the extent that the EU ETS will increase the value of fuel burn reductions (by putting a value on CO2 emissions), this will further strengthen the economic incentive for airlines (and thus aircraft and engine manufacturers whose clients are airlines) to reduce fuel burn. Compared to a business as usual scenario it will therefore increase the relative economic advantage of choosing fuel burn reductions over the reduction of other environmental impacts where trade-offs exist. See also section 5.4.4.

Impacts from other modes of transport substituting air transport:

See section 5.3.4.

Impacts on public health:

The estimated reduction in NOx emissions of some 20,000 tonnes would be expected to provide some benefits to public health through improvements in local air quality, although these are difficult to estimate and quantify. However, the reductions in CO2 emissions of 115 Mt compared to business-as-usual levels, assuming a scope of all departing flights, will contribute to reducing the adverse health effects of climate change such as: injuries and deaths caused by extreme weather events; increased mortality from heat stroke in vulnerable population groups such as children, the elderly and those suffering from cardiovascular diseases; and increased mortality from air pollutants due to the synergic effects of high temperatures and the dissemination of new infectious diseases.

Economic and social impacts

Economic impact on airlines

On routes covered by the EU ETS, all airlines, irrespective of nationality or business model, will be subject to the scheme. On any of these routes, broadly speaking, airlines can be expected to operate similar types of aircraft that are suited to the route’s mission characteristics in terms of aircraft capacity and stage length. Fuel consumption per flight by route will therefore only differ between airlines according to the fuel efficiency of the aircraft used, operational practices and the extent to which more passengers and freight are carried. Therefore, it follows that airlines will incur a similar additional operating cost per flight performed once incorporated into the EU ETS. A more efficient airline will incur a lower cost, and a less efficient airline a higher one.

Airlines' economic performance is determined mainly by the profit margin per unit transported (revenue minus both fixed and variable costs) multiplied by the number of units transported. This means that profitability is closely linked to the ability of an aircraft operator to pass on cost increases deriving from all sources (e.g. oil prices, security measures, airport charges etc.) to the consumer, an operator's market share, and the type and size of market in which it is operating.

When companies are operating within a market where all competitors are covered by the EU ETS, e.g. European power markets, they have the ability to pass on the costs of participating in the scheme to consumers, whether these costs stem from surrendering allowances received through the allocation process or purchasing allowances in the market. In this competitive environment, whether companies surrender allowances received free of charge or against payment during the allocation process does not make any difference to this cost pass-through decision[31].

Since the EU ETS will be covering all aircraft operators on all covered routes, aircraft operators would also be expected to have the ability to pass on the costs of participating in the scheme to consumers. In effect, this means that the cost of supplying air services to consumers has risen across the market. In theoretical terms, this means a shift upwards in the supply curve. Therefore, given the fact that the EU ETS will cover all aircraft operators on all covered routes, the AERO model assumes that aircraft operators fully pass on the costs of participating in the scheme to consumers.

However, a price increase to consumers would be expected to have some impact on the number of units transported - in other words, on demand for air services. In theoretical terms, the upwards shift in the supply curve means a new price equilibrium between demand and supply has been reached. The extent to which demand reacts to the increased cost of air services depends, in turn, on its elasticity i.e. how sensitive consumers are to price increases. The AERO model has estimated the extent to which future forecasted demand might be reduced relative to the business as usual scenario, calculated for the period 2005 to 2020.

The AERO results are as follows. For an allowance price of €6 and a geographic coverage of all departing flights, by 2020 payload carried by aircraft multiplied by the number of kilometres between airports ("revenue tonne kilometres") decreases by 0.3% for domestic flights, 0.4% for flights between Member States, and 0.3% for flights to and from third countries compared to business as usual levels. This breaks down into reductions of 0.3%, 0.4% and 0.3% respectively for passenger demand, and 0.6%, 0.4% and 0.3% respectively for cargo demand. For an allowance price of €30 and a geographic coverage of all departing flights, by 2020 revenue tonne kilometres decrease by 1.7% for domestic flights, 1.9% for flights between Member States, and 1.5% for flights to and from third countries compared to business as usual levels. This breaks down into reductions of 1.6%, 1.9% and 1.6% respectively for passenger demand, and 3.1%, 2.0% and 1.4% respectively for cargo demand.

It can clearly be seen that, for both scenarios, there is a greater impact on cargo demand for domestic flights, where consumers can more easily substitute air travel for other modes of transport. However, the figures become more similar as flight lengths become longer. More detail on shifts to other modes of transport is given in section 5.3.4.

To place all these figures on reductions in future forecasted demand into context, the business as usual increase in revenue tonne kilometres between 2005 and 2020 is estimated by the AERO model to be 138%. Therefore, a percentage reduction of the order of 0.3%-0.4% for an allowance price of €6 and 1.5%-1.9% for an allowance price of €30 (the percentage varying with the type of flight) is modest. In essence it means that, taking the maximum reduction figure of 1.9% across all flights (i.e. an over-estimate), the increase in revenue tonne kilometres would still be a minimum of 133%.

Therefore, the picture for the industry as a whole is aircraft operators being able to pass on the costs of participating in the EU ETS on to consumers, with only a modest impact on future forecasted demand being the reaction. The final step is to consider how this picture across the industry might differ at route level or company level.

Firstly, the analysis above has assumed that competition across routes functions well. The reality is that some routes are more open to competition than others, in particular between Europe and third countries. If a route is less open to competition, an operator may be able to raise prices to a level higher than that justified by cost increases.

Secondly, even if all operators function within the same competitive environment, some operators will find ways of further reducing costs and gaining a price advantage over competitors. For example, in the wake of oil price rises, some operators benefited from hedging strategies where fuel was purchased at rates reflecting lower oil prices. Regarding the EU ETS, operators that have invested in more fuel-efficient fleets, run more fuel-efficient operational practices, travel fuel-efficient distances and attract more passengers or cargo, will be affected to a lesser extent than other operators. The latter category may therefore not be able to fully pass on the costs of participating.

Finally, the actual impact on demand, as opposed to the modelled impact on future forecasted demand, depends on the extent to which it can be minimised by airlines through the types of customers they cater for. Aviation is a good example of a sector within which price discrimination is applied. Therefore, airfares for particular categories of customers e.g. business class passengers would be expected to increase by more than airfares for cheaper tickets. This means that the actual impact of incorporating aviation into the EU ETS on demand will in reality be lower than that modelled by AERO.

To conclude, the overall picture for airlines indicates that the impact on the sector from being brought into the EU ETS is expected to be marginal. This picture may vary from operator to operator depending on the number of companies competing on each route, efficiency levels, and the types of customers catered for, but all would be expected to be able to pass on, to a large extent or in full, the cost of participating in the scheme to their customers with the resultant price increase meaning only a modest impact on future forecasted demand.

Economic impact on airports

Alongside airlines, airports' future profitability levels are also correlated to future demand growth from consumers. However, as discussed in section 5.3.1 above, reductions in future forecasted demand growth from business as usual levels are projected to be modest. Therefore, the main impact on the competitive position of airports would rather be based on non-EU airports becoming more attractive because journeys starting and ending outside of the EU would have lower airfares, and journeys starting or ending outside of the EU would have lower airfares under a scheme covering all departing flights, all other factors being equal (because only one leg of the journey is covered, instead of both legs).

Three cases have been evaluated:

21. Passengers or freight being transported directly from or to the EU, or within the EU, where the airport of departure or destination (or both) could be changed to a non-EU airport.

22. Passengers or freight being transported from one non-EU country to another non-EU country and are currently transferred at an EU hub. There could be an incentive to re-route journeys in order to either fly directly, or to transfer at a non-EU hub.

23. Passengers or freight being transported from or to the EU and are currently transferred at an EU hub. Again, there could be an incentive to re-route journeys in order to either fly directly, or to transfer at a non-EU hub meaning, in turn, that airlines have an incentive to re-locate their hub to a non-EU airport.

With regard to the first category: Since there are very few major airports just outside EU territory, the option to change the airport of departure or destination from an EU airport to a non-EU airport often does not exist. The main exception is Swiss airports. However, the scale of existing air traffic in Swiss airspace is such that there is little room for substituting flights from surrounding airports towards Swiss airports.

In addition, the benefit from potentially lower airfares would have to be balanced against increased travel time (across EU borders). On a typical intra-EU flight of 1,500 kilometres and an allowance price of €30, approximately €4.5 would be saved for a one way trip and €9 for a round trip. It seems unlikely that these price increases would divert significant amounts of business , be it passengers or freight.

With regard to the second category: An incentive would exist for the transfer point of passengers or freight in this category to be changed from inside the EU to outside the EU. However, any impact on EU airports is likely to be extremely small. Currently, only an estimated 1.0% of all passengers at EU airports are travelling from a point of origin outside the EU to a destination outside the EU. It is estimated that only about 2.6% of these passengers (0.03% of all passengers) would choose to transfer at a non-EU airport when the allowance price is at €30. Taking the other alternative of flying directly would be expected to be more expensive than any increase in ticket prices deriving from aviation's inclusion in the EU ETS, and is not always possible, in particular for long haul flights where aircraft need to re-fuel[32].

With regard to the third category: Airlines choose the hub at which they break a flight, and therefore the route options they offer for transporting passengers and freight, based on the merits of its geographical location. Primarily, there needs to be a well-developed home market supplying large numbers of customers. Here, the concentration of economic activity in the catchment area of a hub is a vital indicator. The size of the EU economy means that it would not make sense for an airline to consider re-locating a hub to outside of the EU, since the potential to maximise revenues from EU-based clients would then be forgone. Finally, an airline changing its hub is by no means straightforward or inexpensive: traffic rights and slots must be acquired. For all these reasons, a change of hub airport is highly unlikely.

Secondly, the change in distance travelled when switching from an EU hub to a non-EU hub is a relevant consideration, since longer distances mean more fuel being burnt in order to reach the hub, more fuel needing to be carried (which in turn raises fuel consumption rates) and, if an extra stop was introduced, more fuel being burnt through the landing and take-off cycle. In this context, one of the most frequent examples cited by airline stakeholders has been analysed below, relating to direct air services from the EU to the Far East versus services operated via a hub in the Middle East. The concern is that a competitive disadvantage would be introduced as the latter would not be covered by the EU ETS for the entire journey.

[pic]

The extent of this difference has been assessed taking air services from London Heathrow to Hong Kong International, with the alternatives being a direct flight and a flight via Dubai. The difference in impact was assessed by comparing the EU ETS costs to the extra fuel costs implied by the necessary detour via Dubai, assuming an exchange rate of 1,3 $/€, current jet fuel prices and the use of aircraft typically operating on these routes (B747, A330 and B777).

The results indicate that EU ETS allowance prices would have to exceed some 75 €/tCO2 before the extra cost per seat imposed by the full EU ETS coverage of non-stop services (compared to the partial coverage of stopover services) would fully outweigh the advantage in fuel costs that non-stop services enjoy. This calculation assumes 40% auctioning and a doubling of traffic meaning that only 30% of required allowances are received for free. It is based on current fuel prices and takes into account the lower fuel costs in Dubai.

In other words, the advantage in terms of lower EU ETS compliance costs associated with stopovers in Dubai is small compared to the disadvantages in terms of extra fuel costs and longer flight times implied. The difference in impact of the EU ETS on the two alternatives is therefore unlikely to significantly affect the respective competitive positions of operators competing on the basis of these two alternatives. The main reason for this is the significant detour that a stop-over in Dubai implies – this is illustrated by the picture above. The stop-over flight is almost 20% longer than the direct one.

Economic impact on consumers

In section 5.3.1, taking into account both economic theory and experience from the EU ETS to date, the conclusion is reached that aircraft operators would be expected to be able to pass on, to a large extent or in full, the cost of participating in the scheme to their customers with the resultant price increase meaning only a modest impact on future forecasted demand.

In this section, these cost increases, and therefore price increases, at both flight level (relevant for both passenger and freight prices) and ticket price level (relevant only for passenger prices) are calculated for a return journey in 2020. The first figure in the range is the price increase when assuming an allowance price of €6 per tonne CO2 and the second figure in the range is the price increase when assuming an allowance price of €30 per tonne[33].

Per flight costs | Intra EU | All departing | Arriving & departing |

Without multiplier |

Short haul | 96 – 481 | 96 – 481 | 96 – 481 |

Medium haul | 190 – 948 | 190 – 948 | 190 – 948 |

Long haul | 0 | 942 – 4,711 | 1,884 – 9,422 |

With multiplier = 2 |

Short haul | 193 – 963 | 193 - 963 | 193 - 963 |

Medium haul | 379 – 1,895 | 379 – 1,895 | 379 – 1.895 |

Long haul | 0 | 1,884 – 9,422 | 3,769 – 18,844 |

Table 4: Impact at flights level (in € per round trip)

Per ticket costs | Intra EU | All departing | Arriving & departing |

Without multiplier |

Short haul | 0.9 – 4.6 | 0.9 – 4.6 | 0.9 – 4.6 |

Medium haul | 1.8 – 9.0 | 1.8 – 9.0 | 1.8 – 9.0 |

Long haul | 0 | 4.0 – 19.8 | 7.9 – 39.6 |

With multiplier = 2 |

Short haul | 1.8 – 9.2 | 1.8 – 9.2 | 1.8 – 9.2 |

Medium haul | 3.6 – 18.0 | 3.6 – 18.0 | 3.6 – 18.0 |

Long haul | 0 | 7.9 – 39.6 | 15.8 – 79.2 |

Table 5: Impact on ticket prices (in € per round trip)

Note: Figures indicate the expected increase in ticket prices for round trips in 2020. The first figure in the range is the price increase at an allowance price of € 6 per tonne CO2 and the second figure in the range is the price increase at an allowance price of € 30 per tonne.

Ticket price increases depend linearly on the allowance price. Therefore, the inclusion of a multiplier of 2 (to account for non-CO2 emissions) also doubles the expected ticket price increases.

Assuming no multiplier, it can be seen from the tables that with an allowance price of €30 and a coverage of all departing flights, ticket price increases vary from €4.6 on a short haul round trip to €19.8 for a long haul flight. As a proportion of the total ticket price, these ticket price increases are modest. Their modesty is also demonstrated by the very limited impact they have on reducing future forecasted demand as explained in section 5.3.1 above.

In interpreting these results, the following points should be noted:

24. The results are very sensitive to the load factor, which is assumed to be 70%. Therefore, if the load factor for an aircraft operator is higher than 70%, the price increase per ticket decreases proportionally.

25. The calculations assume that aviation does not make any emission reductions but instead covers 100% of the increase in emissions by purchasing allowances representing emission reductions in other sectors. In reality, however, there exists some potential for the aviation sector to reduce its emissions at a cost lower than that of purchasing allowances, e.g. operators can save money by implementing measures to improve fuel efficiency, which would cost less per unit of emissions saved than the allowance price. Therefore, in this respect, all of the figures are potentially slight over-estimates.

26. The figures represent the average ticket price increase for a particular flight route, assuming that all passengers on a flight pay equally for aviation's participation in the EU ETS. In reality, ticket prices for business customers are likely to increase to a greater extent than ticket prices for economy class customers.

The figures differ from the estimates given in the Communication published in September 2005, preliminary impact assessment and feasibility study for three reasons. Firstly, the background analysis assumed that (opportunity) costs would not be passed on to consumers, which is now not considered to be a realistic outcome. Secondly, the background analysis only provided results for a multiplier for one scenario (intra-EU), whereas the full set of results is provided in this impact assessment. Thirdly, the background analysis assumed allowance prices of €10 and €30 instead of €6 and €30.

Social aspects of consumer impacts:

An argument frequently put forward against measures to internalise the external costs of air transport is that this would go against the trend of "democratisation" of air transport brought about by the growing market shares of low-cost carriers. In other words, these measures would make it more difficult for the less wealthy parts of society to enjoy the benefits of air travel. However, the few data on the socio-economic distribution of air transport users that are publicly available do not support this argument.

According to analysis by Eurocontrol, the market share of low-cost carriers reached 16.3% of all Instrument Flight Rule (IFR) flights in May 2006[34] in the Eurocontrol statistical reference area[35]. In the UK, which is the only Member State where the market share of low-cost carriers is higher than 25%, Cairns and Newson[36] in a recent review of data from existing surveys concluded that " …available evidence suggests that flying is largely undertaken by those in richer households, and that most of the growth in flying is coming from people in such households flying more often ". This was confirmed in a subsequent report authored by the UK Civil Aviation Authority[37]: " The report shows that the average annual rate of growth of short-haul traffic is similar to that before the arrival of no-frills airlines. Most of the no-frills airlines’ growth seems to have been at the expense of other carriers. The report also finds that there has been little impact on the income or socio-economic profile of passengers. The profile of UK no-frills and full-service leisure passengers is similar, and has changed little over the last decade. " These results are contrary to the common perception that the growth in flying is primarily due to more people from lower income groups enjoying the benefits of international travel. In fact, even though lower income groups have benefited to some extent, the reality seems rather to be that the majority of the growth in aviation has occurred because wealthier people are flying more often - in some instances influenced by the existence of a second home or in other instances due to the general trend in tourism towards more frequent trips of shorter duration. While this conclusion is based on UK data, there are no indications that this should not also be the case in other Member States where low-cost services are not as developed as in the UK.

At global level, it is clear that the overwhelming majority of the Earth's population does not use air transport regularly. In fact, most are unlikely to ever have set foot onboard an aircraft. ICAO figures for scheduled traffic for 2005 indicated passenger numbers on scheduled services of just over 2 billion. Accounting for a) non-scheduled services, b) the fact that most flights are return flights and c) the fact that many people fly more than once a year, a good estimate is that far less than 5-10% of the world's 6.5 billion inhabitants use air transport at least once per year . These disparities are also reflected in global aviation emissions figures: For instance, the US and the EU together account for less than 12% of the global population, while their CO2 emissions from air transport amount to some 40% of global aviation emissions.

Therefore, in terms of distribution, while the impacts of climate change tend to create most difficulties for people in poorer regions of the world, increased ticket prices resulting from the EU ETS will be predominantly borne by the wealthier segments of the population both within the EU and globally. Despite the advent of low-cost services, air transport is still very much the preserve of the well off at both the regional and global level. The argument that higher ticket prices will strike poorer people hardest is therefore not credible – the facts indicate that the opposite would be the case.

However, the Commission will, in accordance with its general mandate to monitor competition in all markets, monitor airline ticket prices in order to ensure that price increases are not disproportionate to the costs to airlines from participating in the scheme.

Economic impact on other modes of transport

The impact on other modes of transport from the inclusion of aviation in the EU ETS has been modelled with TREMOVE, an economic and emissions assessment model for the transport sector developed for the European Commission[38].

TREMOVE has been used to model a scenario that corresponds to the main variant: it was assumed that all aviation emissions from flights departing from the EU would be subject to the EU ETS with an estimated allowance price of €30 in 2020. In TREMOVE, this has been implemented via an average increase in air transport fares of 4%. It has been assumed that the increase would affect air transport as a whole during 2010-20.

Table 6 gives the estimated impact of the price increase on passenger transport demand for each mode in 2020. Air transport demand decreases on average by 1.5%, which reflects a rather low elasticity. It is estimated that about 14% of the reduction in air transport would be picked up by other modes: passenger train demand would increase by 0.3% and long range buses (i.e. coaches) by 0.1%. Overall transport demand is projected to decrease by 0.1% as a result of the inclusion of aviation in the EU ETS.

Transport mode | Passenger transport demand (bn passenger km) |

Base case in 2020 | Impact of cost increase (€30/tCO2) in 2020 | % change |

Aviation | 609 | 600 | -1,5% |

Passenger train | 435 | 437 | 0,3% |

Long range buses (coach) | 347 | 347 | 0,1% |

Other passenger transport modes | 6.950 | 6.949 | -0,01% |

Total for all modes | 8.341 | 8.333 | -0,1% |

Table 6: Estimated impact of increased operation costs of aviation (€30 per tCO2) on passenger transport demand by mode in the EU in 2020 (billion of passenger kilometres). Source: TREMOVE model

Table 7 shows the projected changes in greenhouse gas and air pollution emissions based on “well-to-wheel” emission factors. It is estimated that the inclusion of aviation in the EU ETS would have a positive impact. CO2 emissions of the transport sector are projected to decrease overall by almost the full reduction made by air transport. A small part is however offset by additional emissions from trains (37 kt), coaches (79 kt) and private car transport (11 kt) as a result of the modal shift, but these additional emissions are almost neutralised by extra reductions of a similar magnitude from urban transport due to income effects.

The impacts on air pollutant emissions are also given in table 7. To some extent the reduction of air pollutant emissions in aviation is offset by the increase in emissions in rail and coaches. The overall balance is positive, though, as air pollution in transport sector is projected to decrease by about 0.1%. Further, the location of the emissions would differ and thus have a different impact on human health, ecosystems and global warming. For instance, due to different reactions in the atmosphere, a release of NOx by aircraft at altitude has a greater effect than NOx emitted at ground level regarding its role as an ozone precursor.

Environmental impact | Total change | Change in aviation | Change in Coach | Change in Passenger Trains |

Greenhouses gases (controlled under the Kyoto Protocol) |

Carbon Dioxide (CO2) | -0,14% | -1,54% | 0,33% | 0,21% |

Nitrous Oxides (N2O) (exhaust) | -0,01% | -1,54% | 0,38% |

Air pollutants |

Carbon Monoxide (CO) | -0,03% | -1,54% | 0,24% | 0,19% |

Non Methane Volatile Organic Compounds (NMVOC) | -0,05% | -1,54% | 0,36% | 0,20% |

Nitrogen Oxides (NOx) | -0,17% | -1,54% |