European Union Emissions Trading Scheme
June 9, 2009
On January 13, 2009, aviation activities were officially included in the European Union’s (EU) Emission Trading Scheme (ETS). ETS is the EU’s version of a carbon emission “cap and trade” program. The program sets a cap on carbon dioxide (CO2) emissions by issuing and auctioning a limited number of emission allowances to covered entities. Covered entities must then monitor how much CO2 they emit and surrender the proper number of emissions allowances on a yearly basis. Entities not holding a sufficient number of allowances must purchase additional allowances on an open market. All aircraft operators, including U.S.-based entities, operating flights to, from or between EU airports are required to participate in ETS. The National Air Transportation Association (NATA) released a white paper in April detailing compliance requirements under ETS.
There are some important terms and dates with which aircraft operators should be familiar.
Administering State
Each aircraft operator that is subject to ETS requirements is assigned to an EU member state for the purposes of administering the ETS program. Non-EU-based operators will be assigned to the member state that historical data shows they operate into and from most frequently. The majority of U.S. operators covered by ETS have been assigned to the United Kingdom (UK). The list of operator-administering state assignments is available here.
Emissions Monitoring Plan
All operators subject to ETS requirements must create and submit to their administering state a plan to monitor their emissions by August 31, 2009.
Benchmarking Plan
Benchmarking is the optional process that operators must go through if they wish to receive free emissions allowances between 2012 and 2020. The number of free allowances an entity receives will depend on the data received from the entity’s benchmarking plan. Benchmarking plans must be submitted to the appropriate administering states by August 31, 2009. Operators not submitting a benchmarking plan will not be eligible to receive any free allowances between 2012 and 2020.
Eligibility:
All flights conducted to, from or between EU airports in an aircraft with a MTOW greater than 5,700 kg (12,566 pounds) will be included in ETS, with the following exceptions:
- Certain flights transporting Heads of State
- Military & police flights
- Search & rescue, firefighting, humanitarian aid, and EMS flights
- Flights departing and returning to the same airport, with no intermediate landings
- Flight Training
- Scientific or certain check flights
- Flights conducted by a commercial air transport operator that
- Has fewer than 243 flights, per period, for three consecutive four-month periods; or
- Has total annual emissions less than 10,000 tons per year
- Aircraft operating from states with emissions regulations meeting the approval of the European Commission
Resources:
- The UK has released a guide designed to assist operators in preparing monitoring and benchmarking plans. This guide also provides clarification on ETS eligibility, exemptions and streamlined procedures for small operators. The guide is available here.
- The EU commission has released a series of templates for monitoring plans, benchmarking plans and emissions and benchmarking reports. It should be noted that these templates have a “Draft” status and formal adoption is expected in mid-July. NATA will update its membership when the final templates are released. The templates are in Excel format.
- EU’s ETS – Aviation webpage: http://ec.europa.eu/environment/climat/aviation_en.htm
Compliance with ETS will involve significant administrative activity for eligible operators including integrating monitoring and benchmarking plans into company operating procedures. NATA encourages operators who operate in the EU to begin the compliance process now.
For more information, please contact:
Mike France
Manager, Regulatory Affairs
National Air Transportation Association
mfrance@nata.aero