Aviation is one of the fastest-growing sources of greenhouse gas emissions. The EU is taking action to reduce aviation emissions in Europe and working with the international community to develop measures with global reach.
Revision of the EU ETS Directive concerning aviation
On 14 July 2021, the European Commission adopted a series of legislative proposals setting out how it intends to achieve climate neutrality in the EU by 2050, including the intermediate target of an at least 55% net reduction in greenhouse gas emissions by 2030. The package proposes to revise several pieces of EU climate legislation, including the EU ETS, Effort Sharing Regulation, transport and land use legislation, setting out in real terms the ways in which the Commission intends to reach EU climate targets under the European Green Deal.
The Inception Impact Assessment (Roadmap) on the legislative initiative was open for feedback until 28 August 2020.
The open public consultation on the legislative initiative is open until 14 January 2021.
Policy actions and the efforts of industry have led to improvements in fuel efficiency over recent years. For instance, the amount of fuel burned per passenger dropped by 24% between 2005 and 2017. However, these environmental benefits have been outpaced by a sustained growth in air traffic, with passengers in 2017 flying on average 60% further than in 2005.
In the EU in 2017, direct emissions from aviation accounted for 3.8% of total CO2 emissions. The aviation sector creates 13.9% of the emissions from transport, making it the second biggest source of transport GHG emissions after road transport.
- If global aviation were a country, it would rank in the top 10 emitters.
- Someone flying from Lisbon to New York and back generates roughly the same level of emissions as the average person in the EU does by heating their home for a whole year.
Before the COVID-19 crisis, the International Civil Aviation Organization (ICAO) forecasted that by 2050 international aviation emissions could triple compared with 2015.
Aviation also has an impact on the climate through the release of nitrogen oxides, water vapour, and sulphate and soot particles at high altitudes, which could have a significant climate effect. A November 2020 study conducted by the European Aviation Safety Agency (EASA) looks into the non-CO2 effects of aviation on climate change, and fulfils the requirement of the EU Emissions Trading System Directive (Art. 30.4). Overall, the significance of combined non-CO2 climate impacts from aviation activities, previously estimated to be at least as important as those of CO2 alone, is now fully confirmed by the report.
To achieve climate neutrality, the European Green Deal sets out the need to reduce transport emissions by 90% by 2050 (compared to 1990-levels). The aviation sector will have to contribute to the reduction.
Aviation in EU Emissions Trading System
CO2 emissions from aviation have been included in the EU emissions trading system (EU ETS) since 2012. Under the EU ETS, all airlines operating in Europe, European and non-European alike, are required to monitor, report and verify their emissions, and to surrender allowances against those emissions. They receive tradeable allowances covering a certain level of emissions from their flights per year.
The system has so far contributed to reducing the carbon footprint of the aviation sector by more than 17 million tonnes per year, with compliance covering over 99.5% of emissions.
In addition to market-based measures like the ETS, operational measures – such as modernising and improving air traffic management technologies, procedures and systems – also contribute to reducing aviation emissions.
The legislation, adopted in 2008, was designed to apply to emissions from flights from, to and within the European Economic Area (EEA) – the EU Member States, plus Iceland, Liechtenstein and Norway. The European Court of Justice has confirmed that this approach is compatible with international law.
The EU, however, decided to limit the scope of the EU ETS to flights within the EEA until 2016 to support the development of a global measure by the International Civil Aviation Organization (ICAO).
In light of the adoption of a Resolution by the 2016 ICAO Assembly on the global measure (see below), the EU has decided to maintain the geographic scope of the EU ETS limited to intra-EEA flights from 2017 onwards. The EU ETS for aviation will be subject to a new review in the light of the international developments related to the operationalisation of CORSIA. The next review should consider how to implement the global measure in Union law through a revision of the EU ETS legislation. In the absence of a new amendment, the EU ETS would revert back to its original full scope from 2024.
Aviation activities are also included in the Linking Agreement with Switzerland. The aviation activities in the ETS of Switzerland reflect the same principles as those of the EU ETS. Following the entry into force of the Linking Agreement, a Commission Delegated Decision adapted the text of the EU ETS Directive to reflect the scope of aviation activities covered by the Linking Agreement. A Commission Decision ensures the corresponding changes of the free allocation to aviation operators.
Results of public consultation
In 2016, the European Commission held a public consultation on market-based measures to reduce the climate change impact from international aviation. The consultation sought input on both global and EU policy options.
In total, 85 citizens and organisations responded.
Global scheme to offset emissions
In October 2016, the International Civil Aviation Organization (ICAO) agreed on a Resolution for a global market-based measure to address CO2 emissions from international aviation as of 2021. The agreed Resolution sets out the objective and key design elements of the global scheme, as well as a roadmap for the completion of the work on implementing modalities.
The Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA, aims to stabilise CO2 emissions at 2020 levels by requiring airlines to offset the growth of their emissions after 2020.
Airlines will be required to
- monitor emissions on all international routes;
- offset emissions from routes included in the scheme by purchasing eligible emission units generated by projects that reduce emissions in other sectors (e.g. renewable energy).
During the period 2021-2035, and based on expected participation, the scheme is estimated to offset around 80% of the emissions above 2020 levels. This is because participation in the first phases is voluntary for states, and there are exemptions for those with low aviation activity. All EU countries will join the scheme from the start.
A regular review of the scheme is required under the terms of the agreement. This should allow for continuous improvement, including in how the scheme contributes to the goals of the Paris Agreement.
Work is ongoing at ICAO to develop the necessary implementation rules and tools to make the scheme operational. Effective and concrete implementation and operationalisation of CORSIA will ultimately depend on national measures to be developed and enforced at domestic level.
Non-CO2 effects of aviation emissions
- 2020/11/23 - COM (2020) 747 - Updated analysis of the non-CO2 climate impacts of aviation and potential policy measures pursuant to the EU Emissions Trading System Directive Article 30(4)
- 2020/11/23 - SWD (2020) 277 - Full-length report accompanying the study
EU ETS application from 2017 to 2023
- 29/12/2017 - Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021
- 03/02/2017 - COM (2017) 54 - Proposal for a Regulation amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021
Aviation under the Linking Agreement between the EU and Switzerland
- 16/12/2020 - Commission Decision of 16 December 2020 on instructing the central administrator to enter the national aviation allocation tables of Belgium, Bulgaria, Cyprus, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Iceland, Italy, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Norway, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden into the European Union Transaction Log
- 05/11/2020 - Decision No 2/2020 of the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emission trading systems of 5 November 2020 on on amending Annexes I and II to the Agreement and the adoption of Linking Technical Standards (LTS)
- 01/01/2020 - Consolidated version of the Linking Agreement between the European Union and Switzerland
- 01/01/2020 - Notice concerning the entry into force of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems
- 05/12/2019 - Decision No 2/2019 of the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emission trading systems
- 07/12/2017 - Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems
Building Global Action
- 25/06/2020 - Council Decision (EU) 2020/954 - Position to be taken on behalf of the European Union within the International Civil Aviation Organization as regards the notification of voluntary participation in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) from 1 January 2021 and the option selected for calculating aeroplane operators’ offsetting requirements during the 2021-2023 period (COM/2020/194 final - Proposal for a Council decision on the position to be taken on behalf of the European Union in the International Civil Aviation Organization, in respect of notification of voluntary participation in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) from 1 January 2021 and of the option selected for calculating the aeroplane operators’ offsetting requirements during the 2021-2023 period)
- 29/11/2018 - Council Decision (EU) 2018/2027 - Position to be taken on behalf of the European Union within the International Civil Aviation Organization in respect of the First Edition of the International Standards and Recommended Practices on Environmental Protection — Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)
- 10/2016 - 2016 ICAO Assembly Resolution
- 30/10/2013 - 2013 ICAO Assembly Resolution
- 12/01/2012 - Statement of reservation to the ICAO Council decision
- 10-11/2010 - Reservations to the 2010 ICAO Assembly Resolution on Climate Change
- 07/10/2010 - 2010 ICAO Assembly Resolution on Climate Change
- 02/10/2007 - Statement of reservation on behalf of the member states of the European Community (EC) and the other states members of the European Civil Aviation (ECAC) [made at the 36th Assembly of ICAO, 18-28 September 2007]
EU ETS application from 2013 to 2016
- 19/03/2015 - Frequently Asked Questions. Free allocation from the Special Reserve
- 16/04/2014 - Regulation (EU) No 421/2014 of the European Parliament and of the Council amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions
- 16/10/2013 - COM (2013) 722 - Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions.
- SWD (2013) 430 - Impact Assessment
- SWD (2013) 431 - Executive summary of the impact assessment
- MEMO/13/906 – Commission proposes applying EU ETS to European regional airspace from 1 January 2014
- 28/10/2013 - FAQ: Commission proposal for a European Regional Airspace Approach for EU emissions trading for aviation
- 23/10/2013 - Provisional list of countries to/from which it is proposed that routes be exempted from EU ETS for the period from 2014 to 2020
EU ETS application for 2012
- 04/10/2013 - Communication from the Commission - Guidance on the implementation of Decision No 377/2013/EU of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community
- 24/04/2013 - Decision No 377/2013/EU of the European Parliament and of the Council derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community
- 16/04/2013 - Flights that benefit from the derogation ("exempted flights")
- 18/04/2013 - Step by step instructions
- 20/11/2012 - COM (2012) 697 - Proposal for a Decision of the European Parliament and Council derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community
Main EU ETS and aviation legislation
- 19/11/2008 - Directive 2008/101/EC - Amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community
- 13/10/2003 - Directive 2003/87/EC - Establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC
- 23/04/2021 – EEA-wide list of aircraft operators
- 20/07/2011 - EEA JC Decision 93/2011 - has incorporated the Commission Decision on the Union–wide quantity of allowances for aviation into the EEA agreement and has established EEA-wide quantities of allowances for aviation
- 01/07/2011 - EEA JC Decision 87/2011 - has incorporated the Commission Decision on Union-wide historical aviation emissions into the EEA agreement and has established an EEA-wide figure for historical aviation emissions
- 20/04/2011 - Reglement 394/2011: List of aircraft operators further to the expansion of the Union emission trading scheme to EEA-EFTA countries
- 07/03/2011 - Commission Decision 2011/149/EU - Historical aviation emissions pursuant to Article 3c(4) of Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community
- 08/06/2009 - Commission Decision 2009/450/EC - Detailed interpretation of the aviation activities listed in the Annex I to Directive 2003/87/EC
- 16/04/2009 - Commission Decision 2009/339/EC - Inclusion of monitoring and reporting guidelines for emissions and tonne-kilometre data from aviation activities
Process for the inclusion of aviation in the EU Emissions Trading System
- 19/09/2008 - COM/2008/0548 - Communication on the European Parliament's amendments to the Council's Common Position
- 08/07/2008 - 2006/0304(COD) - Resolution of the European Parliament on the Council common position on the Commission's proposal
- 22/04/2008 - COM/2008/221 - Communication of the European Commission on the Council's common position
- 18/04/2008 - 2006/0304(COD) - Common Position of the Council on the proposal
- 20/12/2007 - Political agreement reached by the Environment Ministers on the Council's first reading position on the Commission's proposal
- 13/11/2007 - First reading position of the European Parliament on the Commission's proposal
- 10/10/2007 - Opinion of the Committee of the Regions stating it agrees with the Commission that aviation should be included in the ETS
- 08/06/2007 - Council Conclusions on the position to be taken by EU Member States at the ICAO Assembly in September 2007 in relation to the inclusion of aviation in the EU Emissions Trading System
- 31/05/2007 - Opinion of the European Economic and Social Committee welcoming the Commission's proposal as a "carefully considered and pragmatic approach" to address emissions from aviation
- 20/12/2006 - Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community
- 04/07/2006 - Resolution of the European Parliament in response to the Commission's Communication
- 04/2006 - Opinion of the European Economic and Social Commitee on the Commission's Communication
- 16/12/2005 - European Council conclusions
- 12/2005 - Supportive conclusions of the Environment Council
- 27/09/2005 - Communication of the European Commission outlining plans to reduce the impact of aviation on climate change
- 04/2006 - Final report of the Aviation working group bringing together experts from Member States and industry, consumer and environmental organisations
- 2005-2006 - Background documents and minutes from working group meetings
Other useful documents
- 02/12/2015 - Study: Possible legal arrangements to implement a global market based measure for international aviation emissions
- 25/03/2014 - ETS Aviation small emitters: Cost assessment of applying EU ETS on aviation small emitters and analysis of improvement potential by simplifications, alternative thresholds and alternative means of regulation (Summary)
- 20/12/2006 - Summary Impact Assessment
- 20/12/2006 - Full impact assessment
- 27/09/2005 - Preliminary impact assessment
- 07/2005 - Study on the possibility of including aviation in the EU Emissions Trading System
- 2005 - Report on the public consultation on Reducing the Climate Change Impact of Aviation from 11 March until 6 May 2005
The legal case of ATA against the EU ETS
- 21/12/2011 - Documents related to the ATA case against the EU ETS
Open all questions
Frequently Asked Questions on the impact of Brexit on the EU Emissions Trading System for aviation (September 2021)
Frequently Asked Questions on Regulation (EU) 2017/2392 amending the EU Emissions Trading System for aviation (January 2018)
Frequently Asked Questions on the 2013-2016 Regulation amending the EU Emissions Trading System for aviation (May 2014)
Frequently Asked Questions. Free allocation from the Special Reserve (March 2015)
Questions & Answers on historic aviation emissions and the inclusion of aviation in the EU's Emission Trading System (EU ETS)
Why are historic aviation emissions important for aviation's inclusion in the EU ETS?
Historic aviation emissions are the basis for calculating the cap on aviation emissions applied when the sector is included in the EU ETS from January 2012. Today's decision by the European Commission publishes the mean average of the annual emissions for the years 2004, 2005 and 2006 of all flights that would be covered by the EU ETS performed by air carriers to and from European airports. Based on this average annual historical aviation emissions for the period 2004-2006, the number of aviation allowances to be created in 2012 amounts to 212,892,052 tonnes (97% of historic aviation emissions), and the number of aviation allowances to be created each year from 2013 onwards amounts to 208,502,525 tonnes (95% of historic aviation emissions).
How were historic aviation emissions calculated?
The Commission has been assisted by Eurocontrol – the European organisation for the safety of air navigation. The comprehensive air traffic data contained in Eurocontrol's databases from the Central Route Charges Office (CRCO) and the Central Flow Management Unit (CFMU) were considered the best available data for calculation of the historic emissions. These provide among other things a calculation of the actual route length for each individual flight. Emissions were then calculated on a flight-by-flight basis using the ANCAT 3 (Abatement of Nuisances Caused by Air Transport) methodology and the CASE (Calculation of Emissions by Selective Equivalence) methodology.
In addition to Eurocontrol's data, the Commission also used information on actual fuel consumption from almost 30 aircraft operators of different types and sizes. This data was for aircraft types that were responsible for 93% of emissions in the base years.
Thirdly, additional calculations were carried out to account for fuel consumption associated with the use of the auxiliary power units (APUs). APUs are small engines that are used to provide lighting and air conditioning when the aircraft is stationary at airports. They are used when the aircraft is not connected to ground source electrical power and ventilation services. The approach taken was first to determine the average APU fuel consumption for different aircraft types. The individual emission factors of APU fuel consumption were then extrapolated to calculate total APU emissions applying a process which took into account the actual share of fuel burn for the flights under the EU ETS of each aircraft type and the use of ground power in airports. The emissions corresponding to the resulting total APU fuel consumption were included in the historical aviation emissions for each of the years 2004, 2005 and 2006.
Why was the 2004-2006 period chosen as a baseline for aviation emissions?
The 2004-06 baseline period is defined in the legislation on the inclusion of aviation in the EU ETS. The baseline period for aviation allocation under the EU ETS is different from the 1990 baseline for the EU's overall reduction commitment as it takes into account the significant growth in aviation over the last 15 years.
Why has there been a delay in publishing historic aviation emissions?
This decision has been adopted later than originally foreseen in order to spend more time collating data on the historic emissions. Additional studies were done to increase the accuracy of the estimations of historic aviation emissions, in particular in relation to the fuel used by auxiliary power units (APU). Together with the support from Eurocontrol and contribution from aviation sector, a methodology to assess the APU was developed and the fuel consultation by APU was estimated. This figure was then added to the flight based CO2 emissions.
The subsequent steps foreseen in the implementation of the Directive are to determine free allocations to aircraft operators and the volume of allowances to be auctioned.
How will allocations per aircraft operator be calculated?
82% of the allowances will be given for free to aircraft operators and 15% of the CO2 allowances are allocated by auctioning. The remaining 3% will be allocated to a special reserve for later distribution to fast growing airlines and new entrants into the market.
The free allowances will be allocated by a benchmarking process which measures the activity of each operator in 2010 in terms of the number of passengers and freight that they carry and the total distance travelled. The benchmark should be published by 30 September 2011.
Member states have agreed that all revenues from auctioning should be used to tackle climate change including in the transport sector.
Will the cap on aviation emissions be affected by the Icelandic volcanic ash cloud in 2010?
The events from the Icelandic volcano in 2010 will have no effect whatsoever on the total size of the emissions cap for aviation under the EU ETS or the total number of allowances that will be allocated free of charge to aircraft operators.
We have not seen data to suggest that the impact of the ash cloud will have a material impact on the distribution of free allowances between aircraft operators. Redistribution might occur if certain airlines had to cancel a greater proportion of flights then others, while the vast majority of operators have been impacted by the flight restrictions resulting from the volcanic ash cloud. Indeed all the estimations that we have seen confirm that distributional impacts are very small.
For the regulator to change or adapt the 2010 benchmarking year for the allocation of free allowances to aircraft operators, it would require a change in primary EU legislation. Adopting such legislation usually takes 2 years and there are no plans to start this process.
Which airlines and routes will be affected by the EU ETS?
The EU ETS will cover any aircraft operator, whether EU- or foreign-based, operating international flights on routes to, from or between EU airports. All airlines will thus be treated equally. Very light aircraft will not be covered. Military, police, customs and rescue flights, flights on state and government business, and training or testing flights will also be exempted.
To reduce administrative costs, each operator will be administered by a single Member State regarding emissions from the total of its flights to, from and within the EU.
The list of aircraft operators that may be covered by the system includes over 4000 operators. The list has been created with the support of Eurocontrol and was based on actual flight information; it was last updated in February 2011 to take account of all changes that happened in 2010.
Aviation is an international business – why not conduct emissions trading at global level?
The EU is the strongest advocate for global action to reduce climate impacts of aviation. States have not been able to agree on a common global system through either the United Nations Framework Convention on Climate Change (UNFCCC) or the International Civil Aviation Organisation (ICAO). In the Resolution on climate change adopted at its most recent Assembly in October 2010, states in ICAO called for further work to explore the feasibility of a global market-based measure. The Resolution also recognized that states may take action prior to 2020. The EU ETS provides a good model for applying market-based measures to aviation. Development of other national programmes covering international aviation, compatible with the EU ETS, are a pragmatic way in which global action can be implemented.
What about the litigation by some US airlines against the EU Directive?
While a number of airlines support action by the EU to address the climate change impacts from aviation, a challenge to the EU Directive has been launched by a number of US airlines. This has been referred to the European Court of Justice, and the European Commission, European Parliament, Council and a number of Member States have submitted observations, in addition to other organisations intervening in the case. The airlines involved are complying with the Directive's requirements in full pending the resolution of this challenge.
What will the effect be on aviation emissions?
The environmental impact of including aviation in the EU ETS will be significant because aviation emissions, which are currently growing rapidly, will be capped at below their average level in 2004-2006. By 2020 it is estimated that a total of 183 million tonnes of CO2 will be saved per year on the flights covered, a 46% reduction compared with business as usual. This is equivalent, for instance, to twice Austria's annual greenhouse gas emissions from all sources. Some of these reductions are likely to be made by airlines themselves. However, participation in the EU system will also give them other options: buying additional allowances on the market – i.e. paying other participants to reduce their emissions - or investing in emission-saving projects carried out under the Kyoto Protocol's flexible mechanisms. Providing aviation with these options does not reduce the environmental impact of the proposal since the climate impact of emission reductions is the same regardless of where they are made.
Will ticket prices increase?
Including aviation in the EU ETS will not directly affect or regulate air transport tickets. However, aircraft operators may have to invest in more efficient planes or buy emission allowances in the market in addition to those allocated to them. The impact on ticket prices will probably be minor. Assuming airlines fully pass on these extra costs to customers, by 2020 the ticket price for a return flight within the EU could rise by between €1.8 and €9. Due to their higher environmental impact, long-haul trips could increase by somewhat more depending on the journey length. For example a return flight to New York at current carbon prices of around €15 might cost an additional €12. However, ticket price increases are in any case expected to be significantly lower than the extra costs airlines have passed on to consumers due to world oil price rises in recent years. Including aviation in the EU ETS will also have a smaller impact on prices than if the same environmental improvement were to be achieved through other measures such as a fuel tax or an emissions charge.
How big is EU aviation’s contribution to climate change?
Direct emissions from aviation account for about 3% of the EU’s total greenhouse gas (GHG) emissions. The large majority of these emissions comes from international flights, i.e. flights between two Member States or between a Member State and a non-EU country. This figure does not include indirect warming effects, such as those from NOx emissions, contrails and cirrus cloud effects. The overall impact is therefore estimated to be higher. The Intergovernmental Panel on Climate Change (IPCC) has estimated that aviation’s total impact is about 2 to 4 times higher than the effect of its past CO2 emissions alone. Recent EU research results indicate that this ratio may be somewhat smaller (around 2 times). None of these estimates take into account the uncertain but potentially very significant effects of cirrus clouds.
EU emissions from international aviation are increasing fast – doubling since 1990 – as air travel becomes cheaper without its environmental costs being addressed. For example, someone flying from London to New York and back generates roughly the same level of emissions as the average person in the EU does by heating their home for a whole year. Emissions are forecast to continue growing for the foreseeable future.
Emissions from aviation are higher than from certain entire sectors covered by the EU ETS, for example refineries and steel production. When aviation joins the EU ETS it is forecast to be the second largest sector in terms of emissions, second only to electricity generation.
What are the next steps?
Airlines have been monitoring their emissions during 2010, and are required to verify and report these emissions to their administering Member States by 31 March 2011. By that same date, airlines may also apply for free allocations of emissions allowances on the basis of their activities in 2010. Based on information submitted by the Member States, the European Commission will calculate the benchmark that will define how many free allowances aircraft operators will receive. This benchmark decision will be published by 30 September 2011.
By end September the Commission will also publish the emissions cap and the percentages of allowances to be: auctioned; given for free; and allocated to the special reserve.
Who is an aircraft operator?
The definition in Article 3(o) of the EU ETS Directive determines who is an "aircraft operator" for the purposes of the EU ETS. This definition refers to a natural or legal person which operates an aircraft at the time it performs an aviation activity specified in Annex I to the EU ETS Directive (i.e. a flight departure or a flight arrival at an aerodrome in the territory of the EU). If the identity of the operator cannot be ascertained then the aircraft owner is deemed to be the operator unless the owner identifies the relevant operator.
From what moment do aircraft operators have to comply with EU ETS requirements?
The legal requirements of the EU ETS apply when an aircraft operator first performs an aviation activity in Annex I of the EU ETS Directive which is not covered by any of the exemptions in that Annex. The specific obligations which an operator needs to fulfil are explained in FAQs 3.1and 3.2 below.
From what moment does an aircraft operator cease having to comply with EU ETS requirements?
An aircraft operator that does not perform any flight activity in Annex I of the EU ETS Directive for a complete calendar Year X is not required to comply with EU ETS requirements for that calendar year. However, verified emissions reports and the surrender of allowances will be required in Year X in respect of any relevant flight activity performed in the calendar year X-1.
How will operators and their flight activities be identified?
Annex XV of the Monitoring Decision states in Part 2 that for the purpose of identifying the aircraft operator defined by Article 3(o) of the EU ETS Directive, the ICAO designator in box 7 of a flight plan is to be used or, in the absence of such a designator, the aircraft registration marking is to be used. It appears that there is no uniform system, criteria or procedure for the application and issue of ICAO designator codes. So that it is unclear whether all operators will have a designator or whether aircraft operators within the same corporate group will share the same designator or have separate and distinct ICAO designators. Further complications may arise in identifying an aircraft operator due to the various types of aircraft leasing, the use of management companies, or the use of multiple ICAO designators by the same aircraft operator. Where the aircraft operator cannot be identified then the legislation stipulates that the owner will be responsible unless the owner can identify the relevant operator. Naturally, complications will not arise if each operator possesses and uses its own distinct ICAO designator.
Are companies in the same corporate group to be considered as a single operator?
The relevant test in the EU ETS Directive for an aircraft operator is simply that there is a legal person responsible for flights arriving or departing from EU aerodromes which are not covered by the exemptions in Annex I of the EU ETS Directive. Individual companies that have been duly incorporated each possess their own distinct legal personality. It follows, therefore, that each company responsible for flights covered by Annex I is a different aircraft operator for the purposes of the EU ETS Directive even if they are in the same corporate group of companies.
In addition, Article 18(a) of the EU ETS Directive identifies an administering Member State, in relation to a particular commercial aircraft operator, by reference to the mandatory operating licence issued to that operator by the Member State concerned. There is a presumption, therefore, that each legal person issued with an operating licence by a Member State should be treated as a distinct and separateaircraft operator.
Can an operator have multiple ICAO designators?
There is no explicit requirement for an aircraft operator to have a uniqueidentifier. Recital 15 of the Aviation Directive states that an aircraft operator may be identified by the use of an ICAO designator or any other recognised designator used in the identification of a flight and that if the identity of the operator is not known, then the owner of the aircraft should be deemed to be the operator unless proven otherwise. The crucial point for the operation of the EU emissions trading scheme is that the activities of a given aircraft operator can be attributed unequivocally to that operator. As such, and given the absence in Community law any requirement to be identified by a single and unique identifier, it follows that there is no legal obstacle for an aircraft operator to be identified by multiple ICAO designators so long as these are associated with a single aircraft operator. Obviously, it is administratively simpler if an operator uses only a single identifier when filing its flight plans.
Who is the operator under a "wet lease" arrangement?
Under a wet lease arrangement an aircraft is operated by the lessee for the benefit of the lessor who essentially remains responsible for the state and maintenance of the aircraft i.e. the lessor retains effective control of the flight. The presumption, therefore, is that the lessor is the aircraft operator and that the flight plan will contain the ICAO designator of the lessor/owner or the registration marking of the aircraft. However, the lessor and lessee may agree and indicate alternative responsibility for the flight activity by, for example, using the ICAO designator of the lessee in the flight plan.
Who is the operator under a "dry lease" arrangement?
Under a "dry lease agreement" an aircraft is operated by the lessee under the AOC of the lessees and control of the aircraft effectively passes to the lessee. The presumption, therefore, is that the lessee is the operator and the ICAO designator of the lessee should appear in the flight plan.
Can a management company be an aircraft operator?
Some aircraft operators employ the services of management companies to file flight plans and pay route charges on their behalf. Some management companies also provide services related to the ETS obligations of their clients. However, management companies are notaircraft operators for the purposes of the EU ETS Directive unless they also operate flights covered by Annex I of the EU ETS Directive.
Can a management company represent an aircraft operator regarding the EU ETS?
It is entirely possible for a service company to be empowered to represent an aircraft operator before the competent authorities of the administrating Member State in relation to EU ETS matters. The extent of the powers of the service company will depend upon what is agreed between the operator and the service company.
It is possible, therefore, for a management company to file monitoring reports, and applications for free allowances on behalf of a particular aircraft operator if the management company is duly empowered. The issue of allowances can only be made directly to a registry account held by the aircraft operator. However, the Registries Regulation permits an aircraft operator to nominate an "additional authorised representative" who has limited rights on the account (the exact scope of these limited rights can be set by the account holder). Naturally, administering Member States will wish to be certain about the identity of the aircraft operator represented by a management company.
The Commission also has a duty to ensure the efficient operation of the EU ETS and so it will continue to identify and to include in the list of aircraft operators it publishes those operators who may nonetheless be represented by service companies for the matters relating to the EU ETS.
Are any flights exempted from the EU ETS?
There are several categories of flight which are exempt from the EU ETS. These are contained in Annex I of the EU ETS Directive and include activities such as search & rescue, state flights transporting third countries' Heads of State, Head of Government and Government ministers, police flights amongst others. There are special codes to designate these types of flight which should be inserted into the flight plan which is filed by the operator in order that the flight can be correctly excluded. More information about the types of flight excluded and the associated codes to be inserted in the flight plan can be found in the Annex I Decision1.
Which flights of a commercial operator are considered for the de minimis exemption?
There is a de minimis exemption in subparagraph (j) of Annex I to the EU ETS Directive below which an entity ceases to be an aircraft operator covered by the provisions of the EU ETS. This exemption only applies to commercial air transport operators. Flights may also be provided by commercial operators without remuneration but this factor is not relevant when determining whether the de minimis threshold is exceeded.
In summary, all flights of a commercial operator which are not covered by any of the other exemptions in Annex I of the EU ETS Directive must be considered when assessing whether the de minimis threshold is exceeded.
The aircraft operators list
What is the role of the list of aircraft operators published by the Commission?
The primary function of the list of aircraft operators published by the Commission is to facilitate the good administration of the EU ETS by providing information on which Member State will be regulating a particular operator. This prevents double regulation.
It must be emphasised that inclusion on the list of aircraft operators published by the Commission is not determinative as to whether a natural or legal person is an aircraft operator. This is clearly spelled out in Part 1 paragraph (3) of the Annex to the Annex I Decision. Moreover, a separate information note has been published on the Europa web site on the role of the list whose primary function is to facilitate the good administration of the EU ETS by informing regulators and aircraft operators about who is regulating whom. Conversely, aircraft operators that are on the list do not fall under the EU ETS if they only perform aviation activities that are exempt under Annex I to Directive 2003/87/EC.
It is possible that the list published by the Commission contains inaccuracies or does not reflect the most up to date information about aircraft operators' activities. The Commission will update the list from time to time and where appropriate bring inaccuracies to the attention of competent authorities. Member States are not bound only to regulate those entities contained in the list published by the Commission but have some flexibility to regulate "off-list", for example, where a Member State issues an operating licence to a new operator.
What changes will be made to the list when the Commission updates annually?
The Commission intends to publish an updated list each year around the beginning of February on the basis of the best available information. The aim of this update is to include new aircraft operators that have undertaken flight activities covered by Annex I of the EU ETS Directive in the previous calendar year. In addition, this represents an opportunity to correct manifest errors in the designation of operators or administering Member States.
It is not so important to remove operators that cease their activities given that obligations arise under the ETS from performing relevant flight activities in Annex I of the EU ETS Directive rather than from inclusion on the list. However, to keep the list manageable administratively, where operators have clearly ceased to be covered by the ETS and will not return to it because, for example, they are no longer in existence or because they have rescinded their operating licence, then the Commission will remove such operators from the list at the time of its update. It should be remembered that the activities of some operators may be such that in one year they are not covered by the ETS but activity levels may increase so that in subsequent years they are covered. It does not make sense to amend the list in such circumstances.
I use a service company to file flight plans and pay route charges and I am not on the list – how do I get assigned to a Member State?
Airspace users using services companies for flight planning and payment of route charges may not necessarily be included in the list.
Whilst an aircraft operator is defined by Article 3(o) of the EU ETS Directive, in practice the call sign used for Air Traffic Control (ATC) purposes has been used. The call sign appears in field 7 of the flight plan. The call sign either starts with the 3-letter ICAO designator of the operator or, if not available, represents the registration marking of the aircraft. In the latter case, the aircraft operator is identified by the operator indicated in field 18 of the flight plan or the operator identified by EUROCONTROL’s Central Route Charges Office (CRCO) with alternate sources of information (such as States’ registries or States’ administrations).
An airspace user may not appear as a distinct aircraft operator in the current list if all of its flights have been (a) operated under the ICAO designator of a service company; or (b) identified by the aircraft registration marking and the service company has indicated to the CRCO that it is responsible for the payment of route charges. In such cases, all the flights of the airspace user have been attributed to the service company.
I use service companies for air navigation services. How do I ensure that future flights are not attributed to a service company?
If an aircraft operator has a 3-letter ICAO designator, the aircraft operator should ensure that this code is used in its flight plans or that box 18 of the flight plan indicates its ICAO designator as the operator of that flight. Alternatively, the operator can place the registration marking of the aircraft in field 18 of the flight plan and submit to EUROCONTROL an annual declaration, including information on the composition of their fleet.
Subsidiaries of my company are not on the list, why is this?
The aircraft operator responsible for a flight has been identified on the basis of the information inserted in field 7 of the flight plan. Consequently, flights of subsidiaries operated under the ICAO 3-letter designator of the parent company will have been allocated to the parent company. Also, subsidiaries operating flights under their own ICAO 3-letter designator may also have been allocated to the parent company when the parent company took responsibility of the flights for air navigation charges purposes.
If the parent company has been identified as the aircraft operator for all the flights of a subsidiary, the latter will not appear as a distinct aircraft operator in the current list as there are no flights attributed to it. Aircraft operators which are subsidiary companies should ensure that they identify their flights using a separate ICAO designator and/or that they include all aircraft under their company in the fleet declaration submitted to EUROCONTROL’s Central Route Charges Office (CRCO).
I should not be on the list because I am a commercial operator and should be exempt under point (j) of the Annex 1 of the EU ETS Directive ("de minimis")
Two conditions need to be fulfilled in order for an aircraft operator to benefit from the de minimis exemption under subparagraph (j) of Annex I to the EU ETS Directive:
- the operator is a commercial air transport operator; AND
- the aircraft operator operated less than 243 flights per consecutive period of four months (Jan-Apr, May-Aug, Sep-Dec) or emitted less than 10,000 tonnes of CO2 annually.
If these conditions are met, the most probable reason for inclusion in the list is that for its present functions EUROCONTROL does not retain comprehensive records about AOCs for all operators flying in the EU region. As a result, EUROCONTROL may not be aware of the commercial status of particular operators (as defined in Article 3 of the EU ETS Directive). When this AOC information is missing, the operator is deemed not to be a commercial air transport operator.
An operator may also be included in the list because the last condition above is not satisfied. This means that according to the air traffic information held by EUROCONTROL and the CO2 emissions estimations produced by EUROCONTROL, in any of the years since 2006 both of the following conditions were fulfilled:
- in one of these years, the annual CO2 emissions were estimated to be above 10,000 tonnes and
- in at least one of the four month periods Jan-Apr, May-Aug, or Sep-Dec of the same year you operated at least 243 flights;
If your AOC contains information confirming that you are a commercial air transport operator, please provide a copy of it to EUROCONTROL. Please also keep your competent authority informed that you have sent your AOC to EUROCONTROL.
For non EU operators it may not be possible in all cases to determine your commercial status from your national certificate that is equivalent to the AOC (e.g. US Air Carrier Certificates). This is due to differences in the types of information that is contained in these certificates. However, you are still welcome to submit a copy of your certificate to EUROCONTROL, who may contact you for additional supporting documents.
Why am I on the list when I operate aircraft of less than 5.7 tonnes maximum take-off mass?
The maximum take-off mass that has been used to determine whether flights should be exempted under subparagraph (h) of Annex I to the EU ETS Directive was that held by EUROCONTROL for the calculation of route charges. If you consider that all the flights you have operated were flown only with aircraft of less than 5.7 tonnes, please discuss this issue with your competent authority. The Commission is not in a position to decide whether an operator is exempt from the EU ETS. You may also wish to contact EUROCONTROL for further information.
I am on the list but I only operate flights that are exempted under subparagraphs (a) to (i) of Annex I to Directive 2003/87/EC, e.g. training or circular flights.
If you are on the list it means that you have been identified as the aircraft operator of at least one flight since 2006 that was not considered exempted according to Annex I of the EU ETS Directive.
This situation could be the case for ferrying flights operated, for instance, during the delivery of the aircraft or for bringing it to or back from maintenance facilities. Such ferrying and positioning flights are not exempt from EU ETS. If you consider that all the flights you have operated are exempted under either of the subparagraphs of Annex I of the EU ETS Directive, please discuss this with your competent authority. The Commission is not in a position to decide whether an operator is exempt from the EU ETS. You may wish to contact EUROCONTROL for further information.
I am on the list but I have never flown to, from or within the EU.
If you are on the list it means that you have been identified as the aircraft operator of at least one flight since 2006 that was flown to, from, or within the EU and that was not considered exempted according to Annex I of the EU ETS Directive.
This can be the case for ferrying flights operated, for instance, during the delivery of the aircraft or when bringing it to or back from maintenance facilities. If you consider that you have never operated any flight to, from or within the EU, or you do not plan to have any flights in the future, please discuss this with your competent authority. You may also wish to contact EUROCONTROL for further information.
The name of the operator is not correct
The name of the operator is the name used by EUROCONTROL’s Central Route Charges Office (CRCO) when establishing the invoices for route charges. If you wish to correct the name of the operator on the list, please notify EUROCONTROL about the name change, providing sufficient evidence as to the correct name of the aircraft operator.
The operator is no longer in operation.
The list has been defined on the air traffic information since 2006. An operator has been included in the list as long as it had operated at least one eligible flight in those years.
EUROCONTROL can determine when the most recent flight was flown by a given operator but does not hold comprehensive information on whether such operator is still in operation. If you consider that an operator should NOT be on the list because it does not exist any longer or because it has ceased or suspended its aviation actives in the EU, please inform the competent authority about this. Please also notify the European Commission by sending a message to:
You may wish to contact EUROCONTROL for further information (e.g. the date of the most recent flight in the EU).
The administering Member State is incorrect according to the EU operating licence
The EU ETS Directive stipulates the administering Member State for any given operator in receipt of an operating licence in the EU is the Member State that issued the operating licence. Unfortunately, a complete and comprehensive database of all the operating licences granted by Member States in accordance with the provisions of Council Regulation (EC) No. 1008/2008 is not available, nor does EUROCONTROL hold this information. There is no definitive way, therefore, for the Commission or EUROCONTROL to check which Member State has issued AOCs and operating licences to particular operators and so there may be discrepancies in the list.
If you possess an operating licence from an EU Member State, but in the list you are allocated to a different Member State, please provide a copy of your operating licence to EUROCONTROL.
The administering Member State is incorrect as the operator does not fly (any more) from (or to) such State
The administering Member State has been determined on the basis of the information available for the operator’s base year as defined by Article 18a(5) of the EU ETS Directive. The fact that an operator no longer operates or does not fly mainly from (or to) aerodromes located in such a State does not change the designation of the administering Member State.
Subsidiaries companies are allocated to different EU Member States, how can I avoid this?
Different companies operating flights covered by Annex I of the EU ETS Directive are considered as separate aircraft operators (see question 1.5). Administering Member States are attributed either on the basis of which Member State issued the operating licence or the State with the greatest attributed emissions for that operator. It is for the parent company to decide how to organise its corporate structure and flight activities in relation to the administration of the EU ETS and the allocation of administering Member States.
Can an operator on the list be reattributed to a different administering Member State within the same trading period?
Article 18a(1) of the EU ETS Directive sets the rules on the initial attribution of an aircraft operator to an administering Member State. Attribution is done on the basis of which Member State has issued the operating licence or which is the Member State with the greatest attributed emissions from flights performed by that operator in the base year (2006).
However reattribution of an operator to a new Member State may be necessary if it turns out that the initial attribution does not meet the conditions set under Art 18a(1) of the EU ETS Directive.
Reattribution may be necessary where:
- the Commission together with EUROCONTROL changes the methodology used for the generation of the list of aircraft operators in order to improve the list's accuracy and better reflect the requirements of the Directive (such reattribution will not occur frequently after the initial set up of the scheme);
- there is an error in the list as a result of incomplete or inaccurate information held by the Commission or EUROCONTROL;
- the scope of the EU ETS is expanded to other countries, for instance the full integration of the EEA-EFTA countries (Iceland, Liechtenstein and Norway) into the EU ETS.
Reattribution is different from the transfer of aircraft operators based on Article 18a(2) of the EU ETS Directive. Such transfer occurs where in the first two years of any trading period, none of the attributed aviation emissions from flights performed by an aircraft operator without an operating licence granted by a Member State are attributed to its administering Member State. That aircraft operator must be transferred to another administering Member State in respect of the next period. The new administering Member State will be the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator during the first two years of the previous period.
When an aircraft operator's administering Member State changes, can monitoring plans of an aircraft operator be transferred to a new administering Member State?
After an aircraft operator is reattributed on the basis of Article 18a(1) or transferred on the basis of Article 18a(2) of the EU ETS Directive to a new administering Member State, the monitoring plan will have to be transferred from one administering Member State to another, or resubmitted by an operator to the new administering MS. This process has to be agreed between the Member States on a case by case basis, taking account of the views of the aircraft operator affected and seeking to minimize the financial costs and administrative burden to aircraft operator.
The timing of the transfer or resubmission of the monitoring plan should also be agreed between the Member States and the operator.
What does the aircraft operator identification number signify?
The list now contains a unique identification number (code) for each aircraft operator. This code will be used for compliance purposes. The code coincides with the number used by EUROCONTROL’s Central Route Charges Office (CRCO) for identifying airspace users in the route charges system. This identification number is shown in the reference of air navigation charges bills.
Why am I identified only by my ICAO designator or aircraft tail number?
In the list, a number of aircraft operators may be indentified only by their ICAO designator or the registration mark of the plane. The majority of such aircraft operators are associated with flights operated entirely outside of the region for which EUROCONTROL provides the Central Route Charges Office function, such as flights from the French overseas territories to the Americas. In these cases EUROCONTROL does not have full information about the identity of the operator at this stage. In future versions of the list, the intention is to replace these notations with a complete company name.
Obligations and procedures for new entrants
What does a new operator with an EU operator's licence have to do under the EU ETS?
For new entrants the EU ETS requirements will start from the moment an operator performs an aviation activity laid down in Annex I of the EU ETS Directive i.e. it departs or arrives at an aerodrome in the EU. The Administering Member State responsible for all aspects of administering the ETS in respect of the operator is the Member State that issued the operating licence. The following steps will need to be followed by the new aircraft operator and administering Member State for an activity which commences in Year X:
- Operators will have to submit a monitoring plan to the administering Member State as soon as possible.
- The administering Member State should approve the monitoring plan and the operator should monitor its emissions according the methods in the monitoring plan, the Monitoring Decision and relevant aspects of the Member States national rules and procedures.
- The operator should draft an emissions report for the calendar year X and have it verified by a verifier at the beginning of year X+1.
- The operator submits the verified emissions report to the administering Member State by 31 March of year X+1.
The operator must surrender sufficient emissions allowances to cover its emissions in calendar year X.
What does a new operator without an EU operator's licence have to do under the EU ETS?
The same basic procedure in 3.1 above should be followed. However, the administering Member State is determined according to the greatest attributed emissions in the first year of operation which may not be immediately clear and may not be established definitively until the operator is included in a revised list published by the Commission. As such, the operator cannot submit a monitoring plan for approval to its administering Member State.
In such circumstances, the operator is required to determine its emissions with retrospective effect for the time it falls under the scope of EU ETS. For the period when it has not been attributed to an administering Member State, the operator can determine its emissions according to the approach in section 5 of Annex XIV of the Monitoring Decision to fill "data gaps". This allows an operator to determine its emissions which are missing for reasons beyond its control by a simplified method.
Where the administering Member State is clear from the nature of the operator's flight activity, operators can submit monitoring plans on an informal basis to the administering Member State before formal inclusion on a revised list of operators published the Commission.
Allocation of emissions allowances
Do competent authorities need to assess the applications made by aircraft operators for free allowances?
An operator could apply to its administering Member State by 31 March 2011 for free allowances and provide verified tonne-kilometre activity reports to support the application. Before forwarding the applications to the Commission by 30 June 2011, the Member State should assess the admissibility of the reports and check for potential irregularities. This could be complemented by inspections of the monitoring activities of the operator during the monitoring year as well as supervision of verifiers. Nonetheless, the Member States should also be able to rely upon the verification process to establish the reliability and correctness of the activity data submitted by the operator.
Should the administering Member State check the eligibility of any application for the allocation of allowances from the special reserve?
Article 3f of the EU ETS Directive permits new operators who commence flight activity after 2010 or operators who experience a growth in tonne-kilometre activity in excess of 18% on average annually between 2010 and 2014 to apply for free allowances from the "special reserve". Any application must be made by 30 June 2015 and be supported by verified tonne-kilometre activity data and documentary proof that the operator meets the either of the two eligibility criteria. Before forwarding the application to the Commission (within 6 months) the administering Member State should assess compliance with the eligibility criteria using the material provided by the operator in support of the application as required by Article 3f(3) of the EU ETS Directive. The Commission may provide further guidance on how to perform this assessment at a later date.
Allowances from the special reserve will not allocated for the continuation of activities carried out in whole or in part by another aircraft operator. What does this mean?
Article 3f(1) states that allowances in the special reserve will not be allocated in respect of the flight activities of a new operator or the sharply increased growth of an existing operator if this new activity or increase in activity is a continuation of the activity (either in part or in whole) of another aircraft operator.
The above provision is designed to prevent the free allocation of allowances for flight activities that have already been the subject of a free allowance allocation albeit to a different operator. As such the competent authorities in the administering Member States will need information to establish that:
- There has been no acquisition by share sale of another aircraft operator or acquisition of business assets from another operator;
- There has been no internal corporate reorganisation or creation of a subsidiary company that involves the transfer of flight activity within the corporate group;
- There has been no restructuring as a consequence of an insolvency, scheme of arrangement or bankruptcy resulting in the creation of a new operator performing flight activity previously undertaken by another operator or the transfer of significant flight activity to an existing operator;
- There has been no outsourcing or leasing arrangements whereby existing flight activity of an operator in receipt of free allowances is transferred to a third party who becomes the effective operator of the flights.
What is a small emitter and why is there a distinction?
A small emitter is a non-commercial air transport operator (i) whose flights in aggregate emit less than 25 000 tonnes of CO2 per annum; or (ii) which operates fewer than 243 flights per period for 3 consecutive 4-month periods. A small emitter can take advantage of a simplified procedure to monitor its emissions of CO2 from its flight activity. This procedure is described in Section 4 of Annex XIV of the Monitoring Decision and involves the use of a calculation tool developed by EUROCONTROL or similar tool developed by other organisations.
Aircraft operators emitting less than 25 000 tonnes of CO2 per year, both commercial and non-commercial, can choose an alternative to verification by an independent verifier. The alternative involves determining their emissions by using the small emitters tool approved under Commission Regulation No 606/2010. In such cases, data used for determining emissions must originate from Eurocontrol. As a result, aircraft operators taking advantage of this simpler method need to use data from the ETS Support Facility, without any modification, Of the two types of small emitters defined by Article 54 of Regulation No 601/2012, this simplification only applies to aircraft operators operating flights with total annual emissions lower than 25 000 tonnes CO2 per year. It should be noted that the exemption threshold of 25 000 tonnes CO2 per year is based on the full scope of the EU ETS as defined in Annex I to the EU ETS Directive.
Penalties & enforcement of the EU ETS - Aviation legislation
Why are penalties applied in the Member States not harmonised?
Article 16 of the EU ETS Directive establishes a limited harmonisation of the financial penalties that will be paid by operators that fail to surrender the necessary number of emissions allowances (i.e. €100 per tonne of CO2). More generally, the co-legislators decided that the Member States should adopt rules on penalties for breaches of national legislation which transpose the Directive's requirements and that these penalties should be "effective, proportionate and dissuasive". This formulation allows the Member States to choose between criminal or administrative penalties and provides flexibility to implement a system of penalties that best fits with their national legal systems whilst respecting the obligation to treat breaches of Community law in a manner that is similar to a breach of a wholly national rule or law. The degree of harmonization decided by the co-legislators is arguably sufficient whilst at the same time respecting the principles of subsidiarity and proportionality by which action is to be taken only in so far as it cannot be sufficiently taken by the Member States alone and does not exceed what is absolutely necessary to achieve the desired objective.
Further harmonisation of administrative penalties could be envisaged under the EU ETS Directive but that would have to be decided by the co-legislators following a proposal from the Commission. There is also scope for establishing certain common criminal offences and penalties under the new Treaty on the Functioning of the European Union but again this will require a proposal from the Commission or a quarter of the Member States.
Is there mutual recognition of financial penalties in the Member States?
The Council has put into a place a framework for the mutual recognition of financial penalties in the form of Framework Decision 2005/214/JHA. This means that financial penalties due to offencesarising from breaches of instruments adopted to comply with Community law that are committed in one Member State (the issuing State) can be recognised and enforced in another Member State (the executing State). A central authority is responsible in each Member State for the administration of the scheme. Monies obtained from the enforcement go the executing Member State unless there is a contrary agreement between the two Member States concerned.
Extension of the EU ETS to the EEA EFTA states (Iceland, Liechtenstein and Norway)
Why was the scope of the EU ETS extended to the EEA-EFTA countries (Iceland, Liechtenstein and Norway)?
The Agreement on the European Economic Area (EEA), which entered into force in 1994, is an agreement between the 27 EU Member States and three of the Member States of the European Free Trade Association (EFTA). The latter states, which are Iceland, Liechtenstein and Norway, are collectively called the 'EEA-EFTA countries'. The EEA Agreement provides for the extension of selected EU legislation to the EEA-EFTA countries.
The EEA-EFTA countries have been part of the EU ETS since October 2007, when the EU ETS Directive was incorporated into the EEA Agreement. The aviation part of the EU ETS was incorporated into the EEA Agreement by EEA Joint Committee Decision 6/2011.
What additional flights are covered by the EU ETS following the extension?
The extension of the scheme entails that in addition to the 27 EU Member States the EU ETS covers also the 3 EEA-EFTA countries (Iceland, Liechtenstein and Norway). As a result, flights which depart from or arrive in an aerodrome situated in the territory of an EEA-EFTA country, collectively called 'EEA additional flights', are subject to EU ETS rules. More precisely, EEA additional flights are:
- Domestic flights within the EEA-EFTA countries;
- Flights between the EEA-EFTA countries;
- Flights between the EEA-EFTA countries and third countries outside the EEA.
The list of exemptions from the scope of the EU ETS in Annex I of the EU ETS Directive also applies for the EEA additional flights.
Will same rules be applied for the EEA additional flights as for other flights covered by the EU ETS?
Equal treatment of aircraft operators is a fundamental element of the EU ETS for aviation. The EU and the EEA-EFTA countries therefore have ensured that the design of the scheme is not altered by the extension to the EEA-EFTA countries. In particular, the same benchmark and harmonized allocation rules are applied for the EEA additional flights as for other flights covered by the scheme.
How does the extension impact aircraft operators which are already covered by the scope of the EU ETS?
Aircraft operators which are already covered by the EU ETS are only be affected by the extension of the system if they perform EEA additional flights (see answer to question 8.2). These operators have to include their EEA additional flights into their monitoring and reporting activities.
These operators should have already updated their monitoring plans to cover their EEA additional flights.
Operators who update their monitoring plans should notify their competent authority without delay of any changes made. In case of substantial changes to the monitoring methodology, the operators need to submit their updated plans for re-approval. Substantial changes are described in the EU ETS monitoring and reporting guidelines and include:
- Change of the average reported annual emissions which causes the operator to exceed the threshold for applying tier 1 uncertainty for the determination of fuel consumption;
- Change in the number of flights or in the total annual emissions which cause the aircraft operator to exceed the threshold for small emitters, so that the operator is no longer eligible to benefit from the simplified monitoring procedures;
- Substantial changes to the type of fuels used.
How does the extension affect aircraft operators that are exempt from the EU ETS Directive under point (j) of Annex I (de minimis) so far?
If a commercial aircraft operator is exempted from the scope on grounds of point (j) of Annex I of the EU ETS Directive, (i.e. because it operates 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 (de minimisrule)), the exemption could cease to apply if EEA additional flights cause the aircraft operator to exceed the aforementioned limits. Those aircraft operator should submit monitoring plans as soon as possible to the competent authority in its administering state.
Has the Commission's list of aircraft operators been updated in light of the extension of the EU ETS to the EEA-EFTA countries?
12/02/2019 - EEA-wide list of aircraft operators
How should the change of administrative responsibility between the former administering Member State and an EEA-EFTA country take place?
The criteria set under Article 18a (1) of Directive 2003/87/EC to determine aircraft operator's administering Member State must take into account the extension of the aviation part of the EU emission trading scheme to EEA-EFTA countries (Iceland, Liechtenstein and Norway). Thus, certain aircraft operators, previously allocated to one of EU 27 Member States, are allocated to the EEA-EFTA countries for administration. Regulation (EC) No 748/2009 has therefore been amended.
To facilitate a smooth changeover of the affected aircraft operators, the former administering Member State should complete all its obligations related to the aviation activities carried out during the calendar year before the reattribution of an aircraft operator to an EEA-EFTA country took place. The new administering State (Norway or Iceland) will take over the obligations related to the calendar year in which the reattribution took place and for the following calendar years.
The aircraft operator will need to deal with two authorities for the changeover period, as it completes it obligations in relation to aviation activities carried out in the previous year to the former administering Member State and progressively develops its relations with the newly attributed authority.
The key steps are as follows:
- Monitoring year 2011:
The EEA-wide list of aircraft operators reallocates some aircraft operators to Norway and Iceland. Each affected aircraft operator should submit without delay to the new administering State the monitoring plan for annual emissions, the approval of the monitoring plan by the previous administering Member State and the verified emissions report for the year 2010. This should enable the new administering State to administer the aircraft operator relating to its aviation activities performed during the year 2011.
- Calculating the benchmarks and the auctioning share:
The former administering Member State should submit to the Commission by 30th June 2011 the data from the emissions report for the year 2010 and the verified 2010 report for tonne-kilometre data (the applications for free allowances for the periods 2012 and 2013-2020).
- Allocation of allowances:
If applicable, each concerned aircraft operator should submit to the new administering State the approved monitoring plan for tonne-kilometre data and the verified report for tonne-kilometre data, accepted by the former administering Member State.
If the former administering Member State has modified the data before submitting to the Commission, it should inform the new administering State about the modifications made.
The new administering State should:
- calculate and publish the allocation of allowances for each aircraft operator whose application was submitted to the Commission; and
- issue by 28 February 2012 and by 28 February of each subsequent year the number of allowances allocated to the respective aircraft operator for that year.
Who can request a postponed timeline for a change of administrative responsibility?
The change of administrative responsibility, from a EU 27 Member State to Iceland or Norway, of those aircraft operators which are marked with an asterisk in the EEA list of operators may be subject to a specific timeline. This is to be agreed in conformity with Decision of the EEA Joint Committee n° 6/2011 of 1st April 2011 amending Annex XX (Environment) to the EEA Agreement, (published at the OJ L 93 7.04.2011 page 35).
Those aircraft operators, attributed to Iceland and Norway under the EEA list, which are marked with an asterisk, can request to remain under the administration of its former administering Member State until 2020 the latest, as provided in the Decision of the EEA Joint Committee No 6/2011 of 1st April 2011 amending Annex XX (Environment) to the EEA Agreement.
Such a request can be made by an affected aircraft operator to its former administering Member State within six months from the adoption by the Commission of the EEA-wide list of aircraft operators. The Member State concerned may agree to administer that operator for another year or longer, but only until the end of the trading period in 2020. The EEA-wide list was adopted on 20th April 2011, thus the requests can be made until 20th October 2011.
If the former administering Member State agrees to continue administering the aircraft operator concerned, it should inform the Commission about this agreement and indicate the date from which the aircraft operator will be administered by the new administering State.
How will the extension of the EU ETS to the EEA-EFTA countries affect the calculation of historical aviation emissions and total quantity of allowances?
Data from the EEA-EFTA countries will be taken into account when calculating the EEA historical aviation emissions The EU 27 historical aviation emissions will thus increase to reflect the extended scope of the EU ETS. Likewise, the total amount of allowances to be allocated free of charge, the total amount of allowances to be auctioned and the size of the special reserve will increase proportionally.
How are EEA-EFTA countries included in the existing templates?
The following note was added on the Commission's website on aviation:
'Please note that all references to Member States on the templates should be interpreted as including all 30 EEA States. The EEA comprises the 27 EU Member States, Iceland, Liechtenstein and Norway.'
In addition to this, references to the EEA-EFTA countries have been added to the list of Member States in several places in the templates:
- Where the aircraft operator indicates administering Member States;
- Where the aircraft operator indicates the state that has accredited the verifier;
- In the domestic flights emissions table under 9 (c) in the annual emissions report;
- As state of departure and state of arrival in tables 9 (d) and 9 (e) in the annual emissions report.
Have relevant operators been informed about the extension of the EU ETS to the EEA- EFTA countries?
All commercial aircraft operators registered in Iceland and Norway have been informed about the extension. Information has been sent to the EU Member States administering other operators who are known to be affected by the extension, including a standard letter that can be used to inform these operators. In addition the EEA-EFTA countries, the EFTA Secretariat and the European Commission hosted an information meeting with European and international aviation associations on 11 December 2009 to inform them of the changes.
Monitoring and reporting
How can the biomass fraction of a blended aviation fuel be determined?
In advance of biofuels becoming more commonly used in aviation, the following approach proposes a solution to monitoring and reporting biofuel used in relation to an EU ETS aviation activity. This approach is based on the understanding that it is currently technically not feasible or within reasonable costs to determine biofuel content at the point of uptake to an aircraft.
The monitoring and reporting guidelines (Commission Decision 2007/589/EC as amended) provide possibility in Annex I Section 13.4 for the aircraft operator to propose an estimation method for approval by the competent authority, where it is technically not feasible or disproportionately expensive to determine the biomass fraction of certain aviation biomass fuels
In addition, Section 2.3 of the Annex XIV of the monitoring and reporting guidelines provides for the possibility to use fuel purchasing records for the purpose of determination of the biomass content in the fuel.
Therefore, the following type of methodology could be proposed to the competent authority:
- The biomass fraction of all biomass based fuel used in an Annex I EU ETS aviation activity will be calculated from the fuel purchase records, which indicate the biomass fraction and net calorific value of the fuel.
It will be important to demonstrate two important criteria in the proposed methodology:
- Firstly, the total amount of biomass based fuel claimed for cannot exceed total fuel usage for that operator for Annex I EU ETS aviation activities originating from the airports at which the biofuel is supplied.
- Secondly, the fraction of biomass in the fuel can not be higher than the maximum allowable (certified) percentage of biomass in the fuel.
The calculation of biofuel use shall be independently verified. In particular the verifier must be satisfied that the percentage of fuel purchased by the aircraft operator which was used in EU ETS Annex I aviation activities has been correctly calculated.