What’s Expected of NBAA Members in Order to Comply with the EU ETS?

August 9, 2010

NBAA has created a compliance resource to walk operators in five steps through the EU ETS compliance process.

Emissions Monitoring and Reporting

The EU ETS applies to US operators that conduct flights to or from airports located within EU countries or EU country territories. Those operators subject to the EU ETS must monitor emissions from their flights which are subject to the EU ETS. Operators are required to submit a plan to monitor emissions (the annual emissions monitoring plan) by August 31, 2009, to the appropriate regulatory authority for approval. Authorities in Germany, Sweden, Italy and the UK will provide more time for operators to submit their annual emissions monitoring plan. Aircraft operators assigned to Sweden for ETS administration must submit their plan by October 15, 2009. Italy now requires operators to submit their plan no later than September 30, 2009. Germany has not set a specific date, but it will be in early October 2009. The UK has set November 12, 2009, as its deadline date. Those operators required to comply with the EU ETS assigned to other EU member states should plan to submit their annual emissions monitoring plan by the original deadline of August 31, 2009.

The European Commission has created a monitoring plan template. From that template, each EU country can create its own template for dissemination and operator use. In 2010, operators must then monitor their emissions in accordance with their approved emissions plan and then submit a verified report of those emissions to the regulator by March 31, 2011. Emissions reporting means calculating carbon dioxide emissions from fuel usage. Broadly, the calculation will be fuel consumption multiplied by an emission factor for each flight subject to the ETS and for each fuel.

European Commission Draft Electronic Template: Monitoring Plan For Annual Emissions (Excel, 243 KB)
Please note that the competent authority in the administering Member State may have published a customized version of this template.

Many business aviation operators may opt to use a simplified method to determine their fuel consumption and carbon dioxide emissions for European Union Emissions Trading Scheme (EU-ETS) monitoring and reporting purposes. EUROCONTROL has released a European Commission approved tool in the form of a Microsoft Excel file that allows an operator to calculate and record its annual emissions that are subject to the EU-ETS.

Download the ETS Small Emitter Tool (Excel, 2.7 MB)

Instructions for using the ETS Small Emitter Tool

Application for a Free Allocation

The draft regulations set out what an operator must do if it wishes to apply for a free allocation. This is a voluntary system and operators that do not wish to apply for a free allocation are not under an obligation to do so. Accordingly there is no sanction for not applying for a free allocation, though an operator may incur a civil penalty if it submits false or misleading statements in its application.

Operators currently subject to the EU ETS who wish to apply for free allowances will need to submit a plan (the emissions benchmarking plan) to the regulator by August 31, 2009. Authorities in the UK, Germany, Sweden and Italy will provide more time for operators to submit their emissions benchmarking plan. Aircraft operators assigned to the UK for ETS administration must submit their emissions benchmarking plan by December 31, 2009. Sweden is allowing operators until October 15, 2009, to submit their emissions benchmarking plan. Italy now requires operators to submit their plan no later than September 30, 2009. Germany and has not set a specific date, but it will be in early October 2009. Those operators required to comply with the EU ETS assigned to other EU member states and who wish to apply for free allowances should plan to submit their emissions benchmarking plan by the original deadline of August 31, 2009.

The emissions benchmarking plan sets out how the operator plans to monitor metric ton-kilometer data in 2010. The Directive provides that 2010 is the benchmarking period for the free allocation of allowances for both 2012 and 2013-2020. It also explains how activity data is to be calculated: the weight of passengers (actual weight plus luggage or a default value of 100 kg for each passenger may be used [100 kg per passenger includes their luggage]) plus cargo (freight and/or mail) carried multiplied by the distances over which it was carried (great circle distance [km] + 95 kilometers). This metric is already used in aviation industry for other purposes.

Following the approval of the benchmarking plan operators that wish to apply for a free allocation must monitor the data in 2010 in accordance with the plan and relevant European legislation. They must then submit a verified report of their emissions to the regulator. As stated above, this is a voluntary requirement and there is no penalty for failing to submit a benchmarking plan. If an operator does not receive a free allocation, they will be required to buy all of the allowances to cover their carbon dioxide emissions from the market when the requirements to surrender allowances start in April 2013 for emissions during the year 2012. Existing operators should be aware that if they do not apply for a free allocation they will not receive any allowances for the first two phases of the scheme for aviation. This means that they will not receive a free allocation before 2020.

European Commission Draft Electronic Template: Monitoring Plan For Tonne-Kilometer Data (Emissions Benchmarking Plan) (Excel, 200 KB)
Please note that the competent authority in the administering Member State may have published a customized version of this template.

Emissions Trading

Inclusion of aviation activity in the EU ETS requires operators to account for their greenhouse gas emissions over a given year. At the end of that year, the aircraft operator must have enough CO₂credits for the fuel burned on flights to, from and within EU countries or EU country territories in the year. An operator has three sources to account for its carbon emitted: free allocation credits, credits purchased on the open market and carbon offset credits. The free allocation credits from the benchmarking process, carbon offset credits up to 15% of emissions, and if necessary, the purchase additional credits from the market are used to account for the operator’s emissions in that year. In the event the operator has a surplus of credits at the end of the year, the surplus is sold back to the market.

Non-compliance

These obligations are mandatory and civil penalties will be imposed where operators fail to comply. The UK has set substantial monetary penalties for non-compliance, up through the impounding of aircraft, for not having an acceptable plan in place with the regulating authority. NBAA has been working with the European Business Aviation Association (EBAA) and the British Business and General Aviation Association (BBGA) to obtain refined guidance and will make it available to the Membership as it is developed, but in the meanwhile operators should comply with the requirements in the timeframe allotted to avoid penalties.

Key Dates and Activities for Compliance with the Scheme

Assuming there is not a US regulation governing carbon emissions that supercedes the EU ETS, the EU ETS requirements are as follows:

April 10, 2009

For operators whose EU ETS Administering State is the United Kingdom, email the contact details (title, first name, last name, job title, email address, telephone number, and aircraft operator name) of an appropriate person within your organization who will deal with the monitoring and reporting requirements on your operation’s behalf to etaviationhelp@environment-agency.gov.ukwith the subject “Aviation Contact Details – (Operator Name)”.

For operators whose EU ETS Administering State is other than the UK, review a more complete listing of the Competent Authorities Responsible for the inclusion of aviation into the EU ETS.

August 31, 2009

Deadline for submission of carbon emissions monitoring plan to the operator’s assigned Administering State Authority, except those operators assigned to the UK, Germany, Italy or Sweeden.

August 31, 2009

Deadline for submission of optional benchmarking plan (for operators who wish to apply for a free allocation) to the operator’s assigned Administering State Authority, except those operators assigned to the UK, Germany, Italy or Sweeden.

September 30, 2009

Deadline for operators assigned to Italy to submit annual emissions monitoring plan to the operator’s assigned Administering State Authority.

September 30, 2009

Deadline for operators assigned to Italy to submit optional benchmarking plan (for operators who wish to apply for a free allocation) to the operator’s assigned Administering State Authority.

Early October 2009

Deadline for operators assigned to Germany to submit annual emissions monitoring plan to the operator’s assigned Administering State Authority.

Early October 2009

Deadline for operators assigned to Germany to submit optional benchmarking plan (for operators who wish to apply for a free allocation) to the operator’s assigned Administering State Authority.

October 15, 2009

Deadline for operators assigned to Sweeden to submit annual emissions monitoring plan to the operator’s assigned Administering State Authority.

October 15, 2009

Deadline for operators assigned to Sweeden to submit optional benchmarking plan (for operators who wish to apply for a free allocation) to the operator’s assigned Administering State Authority.

November 12, 2009

Deadline for operators assigned to the UK to submit of annual emissions monitoring plan to the operator’s assigned Administering State Authority.

December 31, 2009

Deadline for operators assigned to the UK to submit optional benchmarking plan (for operators who wish to apply for a free allocation) to the operator’s assigned Administering State Authority.

December 31, 2009

Determination of benchmarking and emissions plans.

January 1, 2010

Start of the benchmarking year for operators applying for a free allocation. This benchmarking year is the first and only benchmarking year out to 2020.

January 1, 2010 and every year thereafter

Start of the first emissions monitoring year. Please note however that 2012 is the first monitoring year for which operators must surrender the correct number of allowances to cover their carbon dioxide emissions. Allowances must be surrendered on Registry accounts by April 1, 2013. This will be covered by the second set of regulations due to come into force before February 2, 2010.

March 31, 2011

Deadline for submission of verified benchmarking data for applications for free allowances.

March 31, 2011 and every year thereafter

Deadline for mandatory submission of verified emissions data for 2010.

June 30, 2011

Closing date for Member State to submit applications for free allowances to Commission.

September 30, 2011

Commission produces benchmark number for calculating emissions.

December 31, 2011

Regulator publishes final allocations to each operator.

February 28, 2012

Regulator issues allowances to operators.

December 31, 2012

End of first emissions reporting year for which allowances must be surrendered by operators. Submission of first verified emissions report.

April 1, 2013 and every year thereafter

Operators surrender the correct number of allowances from their Registry accounts to cover their carbon dioxide emissions.