Airlines could make up to £2.7 billion profits if aviation emissions become part of the EU Emissions Trading Scheme (ETS), according to a report today from the Institute for Public Policy Research (IPPR). The EU is to announce whether aviation is due to be included in the ETS this week, the UK Press Association reported.

IPPR said the EU should require member states to auction the credits to emit greenhouse gases to airlines.

The institute added that if the airlines are simply given the credits they will pass on emissions credit costs to passengers, leaving the industry to pocket up to £2.7 billion in windfall profits.

The report said the UK energy industry made around £1 billion windfall profits in the first year of the EU ETS when it was given free emissions credits. The IPPR said that the profits from an auction should be used to fund low-carbon transport and fuels.
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