Volcanic ash cloud could reduce airlines’ carbon allowances

Market experts have warned that last week’s Europe-wide flight disruptions, following the volcanic ash cloud precaution, will affect the aviation industry’s carbon allocations under the European Union’s Emissions Trading Scheme (EU ETS) from 2012.

"This is not at the top of the list of airlines' concerns at the moment, but once the dust has settled, they will turn their attention to whether this will have an impact on 2012 allocations," says Stig Schjølset, senior analyst at carbon market research firm Point Carbon. "One obvious impact could be that the extra complications could delay aviation's inclusion in the EU ETS."

The Europe-wide flight ban, resulting from the Icelandic volcanic ash clouds from Thursday April 15 to Tuesday April