ETS plans due as deadline looms
Aircraft operators who will be subject to Europe’s new emissions trading scheme (ETS) from Jan. 1, 2012, need to start preparing now to be part of this complex process. Pre-compliance emissions monitoring will be conducted for flights in 2010 and 2011, and in order to participate, operators must submit a monitoring plan by this August for approval by year-end.
The pre-compliance emissions monitoring will measure each aircraft’s emissions in terms of metric tons of carbon dioxide (CO2) per kilometer flown. In fact, operators do not have to take part in this benchmarking process from 2010, but unless they do so, they will not be entitled to the “free” ETS credits or allowances that will be issued on the basis of the measurements. The benchmarking data will be based on analysis of the passengers, baggage and freight carried with flight distances calculated according to the great circle route plus 95 km (51 nm).
Under ETS, in 2012 total emissions from aviation will be capped at 97 percent of the average levels from 2004 to 2006; in 2013 this limit will be reduced to 95 percent. Operators needing more than their assigned allowance will have to purchase additional carbon credits (each allowing for an emission of one metric ton of CO2) on the open market.
Operators can buy credits from companies or individuals in industries other than aviation. They also can meet ETS requirements by purchasing “clean development mechanism credits” that pay for emissions-reduction projects in developing countries.
Under ETS, 85 percent of available carbon credits will be allocated free to operators, with 3 percent of the total number of credits held back to allow for new market entrants and operators who grow very fast. The remaining 15 percent of the credits available in 2012 will be auctioned off to operators between then and 2020, with proceeds being spent on measures intended to deal with climate change within the EU. The business aviation lobby has complained that its operators will not have sufficient buying power to bid against major airlines in this auction process.
All aircraft with a maximum takeoff weight of more than 5.7 metric tons (12,666 pounds) will be subject to the ETS, which applies to flights within European airspace as well as to and from it. The only exemption for commercial operators will be for those who fly an average of fewer than two flights per day over the course of a year (that is, fewer than 730 flights per annum). An alternative exemption is available if an operator’s fleet generates fewer than 10,000 metric tons of CO2 each year.
However, confusion has arisen over whether an exemption for commercial operators who fly fewer than 243 flights in a four-month period over three consecutive four-month periods applies only to flights into or within Europe. This is the interpretation of the European Business Aviation Association and, if correct, it could exempt many U.S. operators who make relatively few flights in Europe (see page 44).
EBACE Convention News has been trying to get definitive confirmation from the European Commission (EC) on this point. The implemention of ETS will be discussed at the EBACE session on the environment this afternoon from 2 to 3 p.m.
At the British Business and General Aviation Association conference at St. Albans on March 3, Philip Good, a policy officer with the EC’s environment directorate, explained that his department has drawn up an initial list assigning each of 2,700 operators to one of the 27 European Union (EU) member states for the purposes of the ETS process. He warned that operators who fail to account for the emissions associated with their flights within Europe can be fined, blacklisted and ultimately have their aircraft impounded. Fines will be levied at a rate of €100 ($126) per metric ton of CO2.
Operators within the EU are accountable to authorities in their own country for complying with ETS. In the case of the UK, for example, the Environment Agency will administer the scheme.
EASA has assigned each of the non-European operators to a specific EU state and expects them to deal with that state in meeting their ETS obligations. For example, it assigned many U.S. corporate flight departments as well as the U.S. fleet of fractional ownership provider NetJets and Jet Aviation’s U.S.-based fleet to the UK for ETS jurisdiction.
The list of operators assigned to states so far can be found at the EC Web site.
Good said operators not assigned to a European state will still have to ensure that they comply. The EC will be able to trace flights into European airspace through Eurocontrol’s CFMU en-route slot allocation system, which also will allow it to check that the number of credits spent corresponds with the actual emissions associated with a given flight.
Operators also have to ensure that an approved auditor independently verifies their emissions declarations for each year. More detailed guidelines for compliance were agreed to in late February but will not become law until June. They included simplified emissions measurement procedures for smaller aircraft and the ability for “smaller emitters” flying fewer than 243 flights in a four-month period to use emissions-modeling techniques rather than precise measurements.
The ETS directive was finalized in December and became EU law on February 2. EU member states have 12 months from that date to implement the rules on their own national statute books.
The EC has agreed that operators from outside the EU can be exempt from the ETS if they are part of an equivalent emissions trading program in their own countries. So, for example, if President Barack Obama were to introduce an emissions-reduction program in the U.S., the Europeans would honor it under reciprocity arrangements.
Over the past couple of months, many U.S. business aircraft operators have reacted with dismay to the news that they must start registering for the European ETS, which comes into force in 2012. Privately, UK officials have acknowledged they do not have sufficient resources to deal with large numbers of operators and close observers believe the registration deadlines could slip.