Aviation and the EU Emissions Trading System
The Kyoto Protocol adopted in Kyoto, Japan, on 11 December 1997, excluded emissions from international aviation services from national emissions targets, and stipulated that an approach to addressing emissions from international aviation should be developed separately through the International Civil Aviation Organization (ICAO). Owing to a lack of consensus over whether and how to allocate responsibility for these emissions, only domestic CO2 emissions are included in the Kyoto Parties’ national emission totals. Emissions from international flights are not subject to the quantified emissions limitations taken on by the countries which ratified the Kyoto Protocol.
The European Commission proposed in February 2005 that international aviation should be included in any post-2012 climate change regime. A new directive 2008/101/EC of the European Parliament and of the Council of the European Union requires all aircraft operators flying into or out of any EU airport to participate in the EU’s emissions trading scheme (ETS) from 2012.
In addition to the 27 EU Member States, the EU ETS for aviation covers three EEA-EFTA States (Iceland, Liechtenstein and Norway) and will extend to Croatia by 1 January 2014 due to the country's planned accession to the EU on 1 July 2013. It will thus soon cover 31 countries.
The European Greenhouse Gas Emissions Trading Scheme has been operational since January 2005 for some 12 000 installations in the 27 Member States ranging from oil refineries and power plants to cement, iron and ceramic production facilities. Emissions from these sectors account for nearly 40 % of the European Union total greenhouse gas emissions.
Companies under the trading system are given allowances which represent the right to emit a specific amount. Companies that emit in excess of their allowances must buy allowances from an operator that has more allowances than it needs or on the market.
EU aviation allowances (aEUAs or EUAAs) will be issued, which are not valid for surrendering for emissions by other than aircraft operators. Aircraft operators are allowed to surrender EU Allowances (EUAs) in addition to EUAAs. EUAAs will be issued as a percentage of the historical aviation (baseline). The historical aviation emissions being defined as the arithmetic mean average of annual emissions from aircraft operators during 2004-2006.
Those emissions amounts to 221.4 Mt CO2. The 2012 cap is 97% of the baseline. In 2012, 85% of the cap is allocated to operators free of charge, (182.6 Mt) and 15% offered at auction (32.2 Mt).
Those emissions amounts to 221.4 Mt CO2. The 2012 cap is 97% of the baseline. In 2012, 85% of the cap is allocated to operators free of charge, (182.6 Mt) and 15% offered at auction (32.2 Mt).
The 2013-
Key Dates
1 January 2012: Start of the third monitoring period for annual emissions.
30 January 2012: Activation of the Union Registry in order to allow airlines to open accounts and to enable the transfer of allowances free of charge
28 February 2012: Member states will issue allocated allowances free of charge to ETS operators for 2012.
28 February 2013: Issuing of free allowances for 2013
31 March 2013: Final date for receipt of the verified 2012 Annual Emissions report.
30 April 2013: Deadline to surrender allowances against reportable 2012 emissions
The European Greenhouse Gas Emissions Trading Scheme has been operational since January 2005 for some 12 000 installations in the 27 Member States ranging from oil refineries and power plants to cement, iron and ceramic production facilities. Emissions from these sectors account for nearly 40 % of the European Union total greenhouse gas emissions.
The scheme is based on Directive 2003/87/EC, which entered into force on 25 October 2003. Emission trading is an economic policy instrument used to control emissions by providing economic incentives for achieving emission reductions. An emission trading system sets a cap on the amount of a pollutant that can be emitted.
Aircraft operators may apply for an allocation of allowances that are to be allocated free of charge (82% of emission allowances will be allocated for free in 2012). An application may be made by submitting to the competent authority in the administering Member State verified tonne-kilometre data for the aviation activities.
From 1 January 2012 all flights which arrive at or depart from an airport situated in the territory of a Member State to which the Treaty applies shall be included in the EU ETS.
A ‘flight’ is the operation of an aircraft from the moment the aircraft first moves under its own power (block-off) for the purpose of taking off until the moment it comes to rest after landing (block-on).
Not included are categories such as military flights, customs and police flights, flights related to search and rescue, fire fighting flights, humanitarian flights, flights performed exclusively under visual flight, training flights, flights performed by aircraft with a certified maximum take-off mass of less than 5 700 kg, flights performed in the framework of public service obligations on routes within outermost regions or on routes where the capacity offered does not exceed 30 000 seats per year and flights which performed by a commercial air transport operator operating either fewer than 243 flights per period for three consecutive four-month periods or flights with total annual emissions lower than 10 000 tonnes per year.
Aircraft operators may apply for an allocation of allowances that are to be allocated free of charge (82% of emission allowances will be allocated for free in 2012). An application may be made by submitting to the competent authority in the administering Member State verified tonne-
From 1 January 2012 all flights which arrive at or depart from an airport situated in the territory of a Member State to which the Treaty applies shall be included in the EU ETS.
A ‘flight’ is the operation of an aircraft from the moment the aircraft first moves under its own power (block-
Aircraft operators operating fewer than 243 flights per period for three consecutive four-month periods and aircraft operators operating flights with total annual emissions lower than 10 000 tonnes CO2 per year may estimate the fuel consumption using tools implemented by Eurocontrol.
An aircraft operator making use of the simplified procedure and exceeding the threshold for small emitters during a reporting year shall notify this fact to the competent authority. Unless the aircraft operator demonstrates to the satisfaction of the competent authority, that the threshold will not be exceeded again from the following reporting period onwards, the aircraft operator shall update the monitoring plan to meet the monitoring requirements. The revised monitoring plan shall be submitted without undue delay to the competent authority for approval.
General rules of the Emission trading system
The allocation methodology for the distribution of allowances to aircraft operators will be based on the verified tonne-
The annual issuance of allowances to operators must take place before March of each year. So an aircraft operator will receive the allowances for the year 2012 before March of that same year.
Each operator under the EU ETS has to have a greenhouse gas permit before it can operate. This permit is the monitoring plan. This plan lays down the rules that have to be followed when reporting the CO2 emissions data under the EU ETS. Each year, before April, the aircraft operator has to report the amount of CO2 emissions that have been emitted in the previous year. This report has to comply with the rules of the monitoring plan and has to be verified by an accredited verifier appointed by the operator.
Aircraft operators are obliged to match the (verified) emissions with an equal amount of allowances. This is called ‘surrendering’ of allowances. Each aircraft operator has to surrender the allowances (of the previous year) before May of the ongoing year. If an operator is short of allowances it will have to buy allowances from an installation or aircraft operator that has more allowances than needed to cover the verified emissions or on the market. A company that does not surrender enough allowances will be fined and will still be obliged to surrender the missing allowances.
AIRETS
Trading solutions for airlines in the EU ETS
Trading solutions for airlines in the EU ETS
Emissions Trading Registries
The revised ETS Directive adopted in 2009 provides for the centralisation of the
EU ETS operations into a single European Union registry. This new registry will be
operated by the Commission and will replace all EU ETS registries currently hosted
in the Member States. All transactions taking place in the registry will be subject
to the approval of the European Union Transaction Log (EUTL), the successor of the
CITL.
The EUTL will be activated in two steps. In a first step and as of 30 January 2012
the single registry will be partially activated in order to allow airlines to open
registry accounts and receive free allowances by end February 2012.
The full activation
of the single registry, including the transfer of existing accounts from national
registries, will not take place before June 2012.
All listed operators will have an Operator Holding Account, i.e. the transaction
account which the operator uses for compliance purposes.
It is the account on which
the operator receives his allocated allowances and the account from which he proposes
his verified emissions and surrenders his allowances.
The account may also be used
for transfers or trading.
It is expected that these accounts will be available before
the end of 2011.
Current registries
European Community
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Latvia
Lithuania
Luxembourg
Monaco
Netherlands
Norway
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
Switzerland
The United Kingdom of Great Britain and Northern
Ireland
Platform of Aircraft Operators in the
EU ETS
Forum for financial managers, compliance,
fuel and environmental managers in the aviation sector
