UK government lets airlines off the hook for £300m air pollution bill
Original article by Lucas Amin and Ben Webster at openDemocracy republished under a Creative Commons Attribution-NonCommercial 4.0 International licence.
The government wrote off emissions equivalent to 400,000 passengers flying from London to Sydney and back in one year
The government gave more than £300m worth of free ‘pollution permits’ to airline companies including British Airways, RyanAir and EasyJet under a scheme designed to tackle climate change.
The UK’s Emissions Trading Scheme is meant to reduce carbon emissions by forcing big polluters to buy a permit for each tonne of carbon they emit, with the money going into the public purse.
But data obtained by openDemocracy reveals the UK’s aviation sector was handed more than four million “pollution permits” last year, free of charge.
The 4.1 million tonnes of CO2 they represent are equivalent to the emissions of more than 400,000 passengers flying economy-class from London to Sydney and back. The free permits saved airlines the equivalent of £336m based on the annual average carbon price – 39% more than the previous year, 2021.
EasyJet, RyanAir and British Airways were the big winners of the handouts, bagging permits worth £84m, £73m and £58m respectively. The companies all made heavy losses during the pandemic but have since become profitable again: British Airways owner International Airlines Group (IAG) announced profits of £1.3bn last month, while RyanAir just enjoyed its “most profitable December quarter on record” and easyJet is reporting “record-breaking sales”.
openDemocracy has previously revealed how oil and gas companies including Shell and BP were similarly handed more than £1bn worth of free pollution permits during 2022.
Caroline Lucas, the Green MP for Brighton Pavilion, told openDemocracy the government was “letting aviation companies get away with it” and “forcing the public to pick up the tab”.
“Ministers must bring an end to these free pollution permits immediately, and make high-carbon companies pay for the climate-wrecking damage they’re causing,” she added.
The Department for Net Zero and Energy Security is now analysing the results of a consultation on phasing out free permits for the aviation sector – but policy changes will not take effect until at least 2026.
The government has already allocated 12.2 million free permits for the next three years, which at last year’s carbon price will be worth a further £965m.
A government spokesperson told openDemocracy the UK was giving away free permits because it was “committed to tackling climate change” but also to “protecting our industry from carbon leakage”.
But the risk of carbon leakage – when companies relocate to countries that do not have carbon pricing – is “minimal”, according to research commissioned by the government itself.
The study by Frontier Economics on behalf of the Department for Business, Energy and Industrial Strategy (BEIS) also found that ending permit giveaways would lead to a decrease in airline profits and improve market competition.
Daniele de Rao, an aviation expert at Carbon Market Watch, told openDemocracy: “Despite several studies showing that the risk of carbon leakage in the aviation sector is insignificant, airlines are still receiving an enormous amount of free allocation.
“The United Kingdom should apply the ‘polluters pay’ principle in its own ETS and, following the European Union’s example, should end the handout of free pollution permits to airlines as soon as possible.”
Matt Finch, UK policy manager of campaign group Transport & Environment, added: “The nation is up in arms about sewage pollution, but at the same time our government is paying airlines millions of pounds a year to pollute. Are these the actions of a climate leader? No. Free allowances should be phased out of the ETS as quickly as possible.”
The remaining £120m in free permits was carved up among the rest of the UK airline industry – with even the owners of private jets getting handouts.
Ineos Aviation, the company owned by oil and gas billionaire Jim Ratcliffe, was given free permits worth around £2,000.
The government has claimed that “our UK ETS is more ambitious than the EU system it replaces”.
But the EU has voted to phase out free permit allocations from 2026. It also redistributes the revenues raised by permit sales to environmental projects – whereas in the UK the proceeds are retained by the Treasury.
A government spokesperson told openDemocracy: “The UK is committed to tackling climate change while protecting our industry from carbon leakage. That is why a proportion of allowances are allocated for free to businesses under the UK Emissions Trading Scheme.”
They claimed handing free permits to airline giants would “support industry in the transition to net zero in the context of high global energy prices while incentivising long term decarbonisation”.
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Original article by Lucas Amin and Ben Webster at openDemocracy republished under a Creative Commons Attribution-NonCommercial 4.0 International licence.
