Tankering strategies for evading emissions trading in the aviation sector

Discussion Paper

In terms of the introduction of emissions trading in the aviation sector, the question arises as to which actors ought to be obliged to participate in emissions trading. One of the possible options being discussed is to oblige fuel suppliers to prove possession of allowances (upstream approach). By comparison, it is being argued that emissions trading can be partly avoided in this case by dint of increased re-fuelling beyond EU boundaries (tankering). The scope of emissions trading would not only thereby be reduced, but also greenhouse gas emissions would actually increase, since more fuel is consumed for every tonne of fuel that has to be additionally carried (fuel penalty).

In the following analysis, typical model relations will be used to analyse the conditions under which such tankering strategies undertaken on account of emissions trading are economically attractive for air carriers and to what extent additional greenhouse gas emissions would arise as a result. Furthermore, the extent to which emissions trading can thereby be sidestepped will be estimated on the basis of flight movements in 2004.