Air Passenger Duty

The agreement between the UK Government's coalition partners, the Conservative and Liberal Democrat parties, states that it plans to abolish the existing Air Passenger Duty regime and replace it with a per-plane tax. The argument in favour of this change is that it would discourage airlines from flying half-empty planes while also lowering emissions. If it is implemented, it will further complicate flight scheduling.

Emissions Trading Scheme

The coalition Government would like to establish a minimum floor price for carbon to encourage industry to reduce emissions. The Government also states that it would lobby the EU to move towards full auctioning of ETS allowances. The Aviation ETS Directive, as currently worded, will gradually reduce the number of free allowances to airlines over the various phases of the scheme down to zero. The unanswered question is whether the coalition Government will seek to accelerate this process.