Loading please wait....
Login

If you are a registered, please log in. If not, please click here to register.

EU-ETS EXPLAINED

Since the European Union announced in spring 2009 its plans to add the aviation sector to the scope of the Emissions Trading Scheme (ETS), uncertainty and confusion has been widespread throughout the corporate aviation industry.

AvBuyer   |   8th January 2010
print
Back to articles
AvBuyer AvBuyer

The AvBuyer editorial team includes Matt Harris and Sean O'Farrell who contribute to a...
Read More

EU-ETS For Aviation:
What is it? What are registration requirements? What are the latest developments?


Since the European Union announced in spring 2009 its plans to add the aviation sector to the scope of the Emissions Trading Scheme (ETS), uncertainty and confusion has been widespread throughout the corporate aviation industry.

While many operators have experienced growing pains with the program’s initial uncertainty of requirements and deadlines - which have changed frequently - compliance is becoming more manageable.

To help clear up confusion and provide updates on the ETS topic, Universal Weather and Aviation, Inc. Supervisor of Regulatory Services Adam Hartley provides some answers to some of the most commonly asked questions he and his team answer daily.

WHAT IS EU-ETS AND WHY IS THE EU INCLUDING AVIATION?
Even though the program is more than a year and a half old, I regularly receive panicked calls from flight departments that have not acted with regard to EU-ETS and don’t really understand what the program is.

To put it in the most basic terms, EU-ETS is a cap-and-trade program designed to aggressively reduce the total amount of CO2 produced leading up to the year 2020 and beyond. Although brand new to the general aviation industry, EU-ETS has actually been around for many years. For example, EU-ETS plans are already in existence for electricity production and manufacturing industries. The aviation industry was selected as the next sector to be regulated by the EU-ETS starting January 1, 2010.

WHEN DOES EU-ETS GO INTO EFFECT?
Mandatory compliance with EU-ETS began on January 1, 2010. Based on calls we receive, I’m sure some operators will read this and become concerned that they have missed this deadline and will be subjected to fines and penalties.

There’s good news here: In all of my many conversations with EU authorities and Member States, I have ascertained that the authorities are aware of the confusion that has surrounded the program and are understanding that not everyone has completed the necessary steps to register for it.

The authorities evidently do not wish to begin sending fines to operators for noncompliance and missed deadlines. What they DO require is that operators act in good faith. For those operators who have not yet submitted their monitoring plan, I cannot be more emphatic in encouraging them to contact their Member State immediately. The Member States I have spoken with are more than willing to work with operators to help them get on track with this program.

Conversely, if operators continue to ignore deadlines and are deemed not to act in good faith, there will be penalties and consequences. In summary, it’s not too late, but we are getting to the point where operators have to make the first steps. Purposeful non-compliance is not an option!

HOW DO I IDENTIFY MY MEMBER STATE?
Designated Member States are generally, but not always, the country operators travel to most frequently. To find out what Member State you are assigned to, visit http://ec.europa.eu/environment/climat/aviation/operators_en.htm.

If your company is not listed on a Member State list and you have operated privately to the EU, you will need to submit a Fleet List form which is available at http://ec.europa.eu/environment/climat/aviation/pdf/Fleet List Form.doc.

Once completed, the form must be emailed to:

[email protected] Sorting this issue out has taken time and remains an ongoing issue. It’s important to note that until you operate to the EU, you are not subject to EU-ETS requirements. There is no way to request a particular Member State, change Member States, or be assigned without having completed an operation to the EU.

WHAT TYPES OF FLIGHTS ARE EXEMPT FROM THE SCOPE OF EU-ETS?
The following type of flights are exempt from EU-ETS:

• Flights performed by a commercial (Air Operator Certificate holder) air transport operator who falls below the de minimis rule (less than 243 EU legs for three consecutive four-month periods or 10,000+ tonnes/CO2 annually);
• Flights between aerodromes that are not situated in an EU Member State are not included in the EU-ETS scheme and do not have to be monitored or reported;
• Flights of a reigning monarch, heads of state, heads of government and government ministers, of a country other than a Member State;
• Military flights performed by military aircraft;
• Flights related to search and rescue, firefighting flights, humanitarian flights and medical service flights;
• Flights performed exclusively under visual flight rules;
• Circular flights (departing and arriving at the same airport without an intermediate stop);
• Training flights;
• Flights performed exclusively for the purpose of scientific research;
• Flights performed by aircraft with a certified maximum take-off mass of less than 5,700kg;
• Flights performed in the framework of public service obligations.

It’s also important to note that the EU and Eurocontrol do not designate flights as FAR Part 91, 121, 125, or 135 on a leg-by-leg designation as the U.S. and Federal Aviation Administration do. These are FAA designations and generally not understood in the European community.

For exemption purposes, all flights conducted by an operator carrying a valid AOC are exempt from EU-ETS as long as their total EU applicable legs and emissions fall below the de minimis rule’s thresholds which are noted above. 10,000 tonnes of CO2 annually is equivalent to approx 7,000,000 lbs of fuel consumed. Again, these thresholds only apply to EU applicable legs.

WHAT IS REQUIRED TO REGISTER?
The January 1 deadline required all aircraft operators that have made an applicable flight to, from, or within the European Union, European Free Trade Association (EFTA) Countries, or outlying territories since January 1, 2006, must:
• Identify their assigned EU Member State;
• Submit and gain approval for an Annual Emissions Monitoring Plan;
• Monitor emissions (Fuel Consumption = Tonnes CO2); and
• Report emissions annually to the regulatory agency of their administering Member State.

WHAT IS THE OPTIONAL BENCHMARKING PROGRAM?
In addition to the mandatory requirements, operators also have an opportunity to earn “free allowances” by completing an optional Benchmarking Plan for 2010.

Participating in the Benchmarking plan could result in significant savings. The best estimates show the amount of free allowances General Aviation could expect to earn is a minimum of five percent to a maximum of around 15 percent in the first stage of the ETS, which runs from 2012-2020.

The key to deciding whether to participate in the Benchmarking Program is to take into account the upfront fees required to submit a tonne-kilometer plan compared to the potential savings through the free allowances. For flight departments that travel to, and within Europe frequently, the savings in the long-run will far outweigh the initial investment.

The upfront fee varies from Member State to Member State, but an example of a fee for a popular Member State is approximately 750 Euros. Remember, operators not participating in the benchmarking plan will pay 100 pe
rcent of their emissions starting in 2012.

To participate in the Benchmarking Program, operators must:

• Submit and gain approval for a Tonne-Kilometer Monitoring (TKM) Plan;
• Monitor TKM Data (GCD + 95km Distance traveled/Payload); and
• Report TKM Data to the regulatory agency of their administering Member State.

WHAT IS THE EU-ETS MONITORING PLAN?
The EU-ETS Annual Emissions Monitoring Plans are templates in a question-and-answer format that include contact data, company ownership structure, operational information, procedures for monitoring data, and management structure to ensure processes.

Each Member State has its own template and process for submission of Monitoring Plans. Operators should check with their Member State or service provider for guidance.

HOW DIFFICULT IS IT TO CREATE A MONITORING PLAN?
There are a variety of sample Monitoring Plans available for free from Member States. One of the challenges of the EU-ETS program for operators has been not knowing where to find the information, which is spread among several websites and is sometimes difficult to find.

To help consolidate that information into one location and provide a free resource for all of the industry to utilize, Universal Weather has developed the EU-ETS Reporting Resource center at www.eu-ets.aero. The site hosts several versions of Monitoring Plan templates created by the UK Environmental Agency, as well as other free information, such as podcasts and frequently asked questions.

HOW DO I CALCULATE ANNUAL EMISSIONS DATA?
There are several options available to calculate Annual Emissions Data. Method A and Method B are fuel conversion calculations based on actual fuel uplifts. The Simplified Calculation is available for operators designated as Small Emitters.

A Small Emitter designation is for operators that fly less than 243 EU flights for three consecutive four-month periods, or emit less than 10,000 tonnes (or 7,000,000 lbs) of CO2 annually.

LATEST DEVELOPMENTS
WHEN WILL THE NEXT OPERATOR LIST BE PUBLISHED?

The latest Prior Compliance List, a preliminary assignment, was published on July 2, 2010 and is available at http://ec.europa.eu/environment/climat/aviation/pdf/prior_compliance_list.pdf.

The next Operator List, an official assignment, was expected to be released shortly after press time for this magazine (late August 2010) and posted at http://ec.europa.eu/environment/climat/aviation/operators_en.htm.

WHAT IS THE SMALL EMITTERS TOOL? IS IT AVAILABLE?
On July 9, 2010, the European Commission approved and released the Small Emitters Tool in conjunction with Eurocontrol. The tool is available for download at http://www.eurocontrol.int/environment/public/standard_page/small_emitters.html.

The Small Emitters Tool is a fuel consumption estimator and CO2 conversion tool. The tool takes into account generic operating data provided by Eurocontrol for thousands of different ICAO aircraft types.

For each leg, operators enter the appropriate aircraft type and nautical miles flown for the entire leg. The calculator will provide an Estimated Fuel Burn (in kilograms) and Estimated CO2 Emitted (also in kilos). The distance calculation can be an exact distance flown in Nautical Miles - if known - or the GCD + 95km calculation converted to Nautical Miles. Questions about the Tool can be directed to [email protected]

It is a good practice to copy your Member State’s regulatory agency on these communications to ensure everyone is on the same page. Member State contact info can be found at http://ec.europa.eu/environment/climat/aviation/pdf/contacts.pdf

WHAT ADDITIONAL SUPPORT WILL EUROCONTROL PROVIDE IN ADDITION TO THE SMALL EMITTERS TOOL?
Eurocontrol’s ETS Support Facility is in the final stages of production, following a quick preview which was displayed at EBACE. The ETS Support Facility should be able to provide an annual report of estimated fuel consumption and CO2 emissions to operators based on identified applicable flights and the same estimator model as the Small Emitters Tool.

The EBAA is working with Eurocontrol on the ETS Support Facility and trying to establish an easy process for Third Party Verification.

WHAT IS THIRD PARTY VERIFICATION & WHO CAN PROVIDE THIS SERVICE?
The directive approved by the European Commission calls for an operator’s annual report to be verified by an accredited third-party prior to being submitted to the Member State for reconciliation.

The Third Party Verification market within EU-ETS for aviation is still defining itself. It is expected that companies who are currently accredited verifiers for ETS ground emissions programs will be first in line to receive accreditation for the aviation sector.

Up to this point, no Member State has published a definitive list of approved verifiers for EU-ETS pertaining to aviation. Operators should check with their service provider or Member State frequently for further developments.

WHAT ARE CARBON CREDITS AND HOW DO I OBTAIN THEM?
A carbon credit, or allowance, is a traded commodity that can be obtained in a variety of different ways to offset an aircraft’s CO2 emissions, or carbon footprint, based on the operation's annual fuel consumption. The European Commission has just approved the Auctioning Regulation governing the sale of allowances.

An FAQ sheet can be found at - http://ec.europa.eu/environment/climat/emission/pdf/qa_final.pdf.

ULTIMATELY, HOW IS EU-ETS GOING TO IMPACT MY FLIGHT DEPARTMENT? EU-ETS for aviation is here to stay. Therefore, I recommend adapting now to understand the program’s requirements and make a plan for compliance.

Even if you have not yet been assigned a Member State, you can still begin tracking your emissions. This will provide familiarity with the requirements and allow a simple transition when your plan is accepted, or you begin operations to the EU.

I’M STILL CONFUSED! WHAT SHOULD I DO?
Contact your Member State or a service provider like Universal Weather. Our Regulatory Services team handles EU-ETS questions daily. Free information is available, and in my experience, the EU Member States are happy to help!

Universal Supervisor of Regulatory Services Adam Hartley has established himself as one of the industry’s top experts at helping operators comply with complicated and often unclear regulations, such as the EU-ETS. His expertise has earned him invitations to speak both domestically and internationally at major industry events and conferences held by the NBAA, Boeing Business Jets, Bombardier, CTA-FOS, and other regional business aviation associations. Tools, templates, FAQ’s, and guidance documents discussed in the above article are all available on Universal’s free EU-ETS Reporting Resource Center at www.eu-ets.aero.

Read more about: EU-ETS

Related Articles

linkedin Print

Other Articles