The aviation industry is set to face additional costs of €1bn (£848m, $1.4bn) when it enters the European Union’s Emissions Trading Scheme in 2012, according to a new report.

Airlines are likely to find out in the autumn how many carbon emissions allowances they will be allocated, and a study by analysts Point Carbon and RDC Aviation says the industry is likely to be allocated 210m tonnes of allowances for free when the European Commission makes its announcement. Airlines will have to buy 15 per cent of the allowances they need, or 77m tonnes.