Abstract

This chapter explores the suitability of and regulatory barriers to using the European emissions trading scheme (EU ETS) to regulate the growing greenhouse gas (GHG) emissions from the transport sector. The inclusion of aviation in the EU ETS and road transport in the Californian scheme demonstrates that it is possible to regulate the sector through emissions trading. Experiences with the inclusion of aviation and the subsequent exemption of international aviation pursuant to progress under the International Civil Aviation Organization (ICAO) also show that for international sectors the scope of the EU ETS and the outcomes of international climate negotiations have a dynamic and interdependent relationship. Shipping is technically suitable for inclusion, but inclusion will depend on progress under IMO, as the EU’s preference is also for an international solution for shipping. The requirements for accurate data on emissions, the principle of direct emissions, and policy congestion constitute major barriers for the inclusion of road transport in the EU ETS that are currently difficult to overcome. The electrification of vehicles and vessels could, however, lead to the indirect inclusion of, in particular, road transport into the EU ETS through electricity producers.