UK gave airlines 4.4m free pollution permits in 2021, study finds

theguardian.com:

The UK government gave airlines nearly a quarter of a billion pounds in free pollution permits in a single year, enough for the entire industry to dodge a carbon emissions cap and trade scheme entirely, according to new research.

In 2021, the UK Emissions Trading Scheme (UK ETS), which charges polluters per tonne of carbon emitted, handed airlines 4.4m free allowances, but the industry only surrendered 3.4m back. In effect, UK taxpayers covered the entire cost of aviation industry emissions, plus some to spare.

At an average price per allowance of £55.59 in 2021, according to the analysis by the clean transport campaign group Transport & Environment, it amounted to a hidden subsidy of about £242m. “This meant that – in direct contradiction of the polluter-pays principle – the industry as a whole simply did not have to pay for any of the carbon emissions they released,” said T&E in a briefing.

The government’s generosity meant not only could the aviation industry pollute for free, but airlines were also left with 0.9m excess permits they could either keep or sell on. T&E found airlines could have made a potential £72m if they had sold their spare permits for £79.20 each at the top of the market last year.

EasyJet was the biggest beneficiary of the scheme, T&E’s research found, with permits worth a potential £40m left over at the end of 2021. It was followed by British Airways with £23.5m worth of permits, Tui with £19.4m, RyanAir with £9.7m and Lufthansa with £5.5m.

Commercial confidentiality means taxpayers may never know whether airlines decided to save their spare permits to subsidise future pollution, or sell them for a quick cash boost.Sign up to First Edition, our free daily newsletter – every weekday morning at 7am BST

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