UK Markets open in 1 hr 15 mins

Germany fines airlines for CO2 emissions breach

May 1 (Reuters) - Germany has fined airlines for not paying for their carbon dioxide emissions, a government official said, becoming the first country to announce such enforcement of Europe's Emissions Trading System (ETS).

In 2012 the European Union started charging all airlines for emissions for the full duration of their flights into and out of the bloc via its ETS but confined application to internal EU flights, initially for one year, to give the United Nations time to craft a global alternative.

Earlier this month the European Parliament agreed to extend the exemption on international flights until at least 2016 following intense pressure from national governments.

However foreign airlines are still liable for their emissions made in 2012, before the exemption started.

"As of 30 April 2014, the German Emissions Trading Authority has finished the process to issue penalty notices to all airlines that were in breach of their obligation to surrender allowances for 2012 intra-EU/EEA flights," a spokesman at Germany's Environment Ministry said via email.

He would not say which airlines had been contacted or how much the fines would be.

China's Air China (HKSE: 0753-OL.HK - news) and Shanghai Airlines, along with Russia's Aeroflot (MCX: AFLT.ME - news) and some small U.S. carriers, all of which are registered in Germany, were in breach of the regulations, according to European Commission documents published in February.

It was not clear whether those airlines were among those hit with a fine.

Under EU rules, the penalty for non compliance is 100 euros per tonne of emissions for which an operator failed to submit carbon allowances, plus they have to buy permits to make up for the shortfall.

A Bloomberg report citing an unnamed German official said the total fines issued by Germany amounted to 2.7 million euros ($3.74 million).

As the main air transport hubs for Europe, Germany and Britain are responsible for overseeing the bulk of airlines covered by the EU ETS.

A spokeswoman for Britain's Department of Energy and Climate Change said it does not have a formal deadline for the issuing of penalties in emissions cases. ($1 = 0.7212 Euros) (Reporting by Susanna Twidale and Ben Garside in London, editing by Mark Heinrich)