EU delays deadline for ETS plans

Aviation International News » September 2009
August 25, 2009, 6:50 AM

Aircraft operators needing to register their plans for the monitoring, reporting and verification (MRV) of emissions data under Europe’s emissions trading scheme (ETS) are probably facing a revised deadline of around Nov. 8, 2009. The European Commission (EC) on August 22 officially published a long-awaited revised list of operators and the European Union (EU) member states to which they have been allocated for compliance purposes.

In early July, European officials were forced to push back the earlier August 31 deadline because the EC had not published the revised list. At the time they indicated that the revised deadline for ETS registration would fall at least 11 weeks after the publication of the new list, which would take the timetable into November.

In fact, the UK Environment Agency is the only ETS regulatory body to publicly acknowledge the deferral of the August 31 deadline. However, since the revised operator list–on which the whole MRV registration process hinges–was not officially published until August 22 it seems inconceivable that the August 31 deadline could still be enforced, not least because for many operators this will be the first time they become aware of their ETS obligations.

On August 12, the EC quietly posted a draft version of the revised list of ETS operators on its Web site and confirmed August 22 as the official publication date, from which the revised deadline will be calculated. The list is significantly longer than one published earlier this year and includes more business aircraft operators.

The list outlines the EU member states with which operators will have to register MRV plans but does not make it clear exactly which government agency in these countries will be handling the ETS process. In the UK, which has one of the longest lists of operators, the Environment Agency is responsible but the same may not be true for other countries. In theory, whichever national agencies are handling ETS implementation will write directly to all the operators on their list to explain what is expected of them.

However, several sources with an intimate knowledge of the ETS process have told AIN on condition of anonymity that some government agencies around Europe are woefully under-resourced to handle the job and that widespread delays and confusion are anticipated as operators try to register. One expert said that in France, which also has a long list of operators assigned to it, just one civil servant had been assigned to work on ETS implementation as of mid-August. This person currently faces the daunting task of having to process the MRV plans of almost 1,000 individual operators.

Another puzzling aspect of the EC’s revised list of operators is that in a significant number of cases the only available details indicate “operator ICAO code XXX” or “operator using tail number XXX.” In these instances, not only is the operator not clearly identified but no state of registration for the operators’ aircraft is shown.

After an aircraft operator has filed its proposed MRV plan for ETS, the agency in question then has to approve or refuse the plan within four months. However, monitoring, reporting and verification is due to start in January 2010, as part of the data-gathering process required before actual emissions trading can begin in January 2012. So in view of a likely deadline of early November for filing MRV plans, government agencies probably will be hard-pressed to process the plans in what will amount to less than two months.

Operators who want to apply for the so-called benchmarking plan that will result in a free allocation of ETS credits must do so by Dec. 31, 2009. All aircraft weighing less than 5.7 metric tons (12,566 pounds) are exempt from ETS.

Fresh advice from the UK Environment Agency has confirmed that commercial operators who can be categorized as so-called small emitters can in fact be exempt from the ETS process and will not have to monitor, report and verify their emissions. This is contrary to an explanation of the terms under which commercial operators can be exempt in the August 2009 edition of AIN.

To qualify as a small emitter, commercial or private operators need to prove that they have flown fewer than 243 flights within European airspace over three consecutive four-month periods (equivalent to an average of two flights per day over the course of a year–that is, fewer than 730 flights in total per annum). An alternative exemption is available if an operator’s fleet generates fewer than 10,000 metric tons of CO2 each year. Operators who make some flights under commercial rules and some under private rules need to calculate whether all their flights combined would fall below the thresholds.

Commercial operators that fall under either of these thresholds can report this to their assigned government agency and claim a full exemption from reporting an MRV plan, and from subsequent MRV activity and trading in emissions. However, the list of ETS operators will be revised annually each February 1, so operators whose flying activity subsequently takes them above the small emitter thresholds will then have to register an MRV plan for ETS compliance.

Private operators can also be categorized as small emitters under the same terms. The difference is that they still have to both report their emissions through the MRV process and trade in emissions beginning in 2012.

Management companies that routinely have to operate the same aircraft under commercial rules one day (with themselves designated as “the operator”) and then under private rules another day (with the aircraft owner then designated as “the operator”) have faced a dilemma as to how to register for ETS. At face value, the rules suggest that such a company would have to file an ETS plan for itself as operator and then separate ETS plans for all its various private “operators” under Part 91 rules. Then it would be faced with the bureaucratic nightmare of monitoring, reporting and verifying emissions for all these various flights and keeping all the data straight.

Official guidance on this issue has been far from clear. An official at the UK Environment Agency has indicated that this paradoxical situation is now being reconsidered and fresh guidance may be issued in time for companies registering their MRV plans.

At face value, it would appear that for ETS purposes “the operator” is defined as whichever individual or entity is identified as “the operator” in the aircraft registration records associated with a specific aircraft tail number. This is because the main data tracking point for ETS is in fact Eurocontrol’s Central Route Charges Office database, which logs all flights made in European airspace.

AIN questioned a specialist consultant who is advising operators about ETS compliance on this point. He confirmed that government agencies are aware of the dilemma and have essentially accepted that it will be too complicated to distinguish between the exact status of the defined operator for the same aircraft flying under different rules. He anticipated that agencies will effectively accept just one registration from the entity they regard as the main operator, in this instance the management company.

The EC list of operators, along with more information, can be found at the following page in the EC Web site: http://ec. europa.eu/environment/climat/aviation_en.htm. More information on the ETS process can be found at the UK Environment Agency Web site: www.environment-agency.gov.uk/ business/topics/pollution/107596.aspx.

Cessna has posted guidance at its Web site for Citation operators needing to register for ETS compliance: www.cessnasupport. com/CarbonEmissions. The following models fall into the ETS net: Citation CJ3, Citation II/III/IV/V/VI/VII, Bravo, S/II, Ultra, Encore/Encore+, Excel/XLS,/XLS+, Sovereign and Citation X.

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