Corporate jets used by billionaires the Duke of Westminster and Lord Ashcroft are among the aircraft to be allocated free "carbon allowances" to offset the cost of a new green tax.
Almost 200 corporate jet owners, from oil company ExxonMobil to Starbucks and Iceland Foods, will be awarded free permits to compensate them for the new expense of Europe's carbon trading scheme for aircraft.
The emissions trading scheme means airlines will have to surrender a permit for every tonne of carbon dioxide they emit, which is expected to raise the cost of flying for millions of passengers.
Bigger airlines, such as easyJet and British Airways, have long been preparing for huge bills from the emissions trading scheme.
They will get a large number of free allowances in the first few years of the scheme to protect their businesses from becoming uneconomic.
However, corporate jet owners will also be able to take advantage of these free allowances, potentially selling them on for cash if they don't use their aircraft as much as in previous years.
Dozens of corporate jet owners will get free permits, including Iceland Foods, JP Morgan Chase, Procter and Gamble, Hertz Corporation, McDonalds, IBM and Coca-Cola.
Flying Lion Ltd, a company used by Lord Ashcroft, which has flown Conservative politicians around the world, will initially get 24 allowances per year worth €240 (£207) at today’s prices.
However, the value of each permit is variable and is expected to rise significantly after the scheme comes into force in 2012.
The list of approved operators also shows that the Duke of Westminster, one of Britain’s richest men, is getting 28 allowances in the first year, worth €280 at today’s prices.
A spokesman for the Duke of Westminster said: “We are aware of the forthcoming legislation and that it includes private planes such as the one owned by the Duke of Westminster.
“We are considering how best to handle participation in carbon trading but are not yet in a position to give any detail.”
The Department for Energy and Climate Change said operators of aircraft had to submit flying data this spring to qualify for relief of up to 85pc of their total bill through free allowances in the first year.
The emissions trading scheme has severely angered foreign airlines, leading British Airways boss Willie Walsh to warn that Europe risks angering US and Chinese companies.
American airlines have been trying to argue that they should be exempt from the scheme, according to international law.
However, last week, the European Union’s advocate-general, Juliane Kokott, issued an opinion that including foreign airlines in the scheme is legal.
It is likely that airlines will pass on the cost of the scheme to their customers, who are already facing an increase in Air Passenger Duty.
Read more: www.telegraph.co.uk
"Carbon could become one of the fastest growing markets ever, with volumes comparable to credit derivatives inside of a decade"
Chris Leeds, Head of Emissions Trading - Merrill Lynch, London
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