Quick look at the ETS
The EU ETS
The European Emission Trading Scheme (EU ETS) was launched in 2005 by the directive 2003/87/EC. The EU ETS works as a cap and trade system by setting a price on GHG emissions. The EU ETS is an instrument implemented in the 28 Member States of the EU and in 3 EEA-EFTA countries (Iceland, Liechtenstein and Norway). For a general overview of EU ETS, please consult this document developed by the European Commission.
Scope of the EU ETS for aircraft operators included
The directive ETS
Since 2012 the emission from all flights, to and within European Economic Area (EEA) - the 28 EU Member States, plus Iceland, Liechtenstein and Norway - are included in the EU Emissions Trading System. This legislation is applicable to all airlines whatever they are European or non European. However since the beginning the Annex I of ETS directive specifically excludes the activities mentioned here:
- flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a country other than a Member State, where this is substantiated by an appropriate status indicator in the flight plan;
- military flights performed by military aircraft and customs and police flights;
- flights related to search and rescue, fire-fighting flights, humanitarian flights and emergency medical service flights authorised by the appropriate competent authority;
- any flights performed exclusively under visual flight rules as defined in Annex 2 to the Chicago Convention;
- flights terminating at the aerodrome from which the aircraft has taken off and during which no intermediate landing has been made;
- training flights performed exclusively for the purpose of obtaining a licence, or a rating in the case of cockpit flight crew where this is substantiated by an appropriate remark in the flight plan provided that the flight does not serve for the transport of passengers and/or cargo or for the positioning or ferrying of the aircraft;
- flights performed exclusively for the purpose of scientific research or for the purpose of checking, testing or certifying aircraft or equipment whether airborne or ground-based;
- flights performed by aircraft with a certified maximum take-off mass of less than 5700 kg;
- flights performed in the framework of public service obligations imposed in accordance with Regulation (EEC) No 2408/92 on routes within outermost regions, as specified in Article 299(2) of the Treaty, or on routes where the capacity offered does not exceed 30000 seats per year; and
- flights which, but for this point, would fall within this activity, performed by a commercial air transport operator operating either: fewer than 243 flights per period for three consecutive four-month periods, or flights with total annual emissions lower than 10000 tonnes per year. Flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a Member State may not be excluded under this point."
For more interpretation guidance on the annex, see the Commission’s decision (2009/450/EC)
The objective of the EU ETS for fixed installations (-21% in 2020 compared to 2005) does not apply to aviation, rather since January 2013, the total quantity of allowances to be allocated to aircraft operators is equivalent to 95 % of the historical aviation emissions multiplied by the number of years in the period.
Originally the legislation was intended to apply to all flights from, to and within the European Economic Area (EEA). Following the progress in the negotiations at International Civil Aviation Organization (ICAO) on a global market based measure for aviation and the adoption of a Resolution by the 2016 ICAO Assembly on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the EU ETS requirements were amended three times :
- First, through the stop the clock decision which exempted for the year 2012 flights to and from non European countries.
- Second, through the 421/2014 regulation. For the years 2013 to 2016 the EU ETS covers only emission from flights within the EEA. From 1 January 2013 to 31 December 2016, all emissions from flights between an aerodrome located in an outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU) and an aerodrome located in another region of the EEA in each calendar year are also excluded;
- Third, through the Regulation 2017/2392 . This regulation amends the EU ETS Directive and maintains the current approach of a scope limited to flights within the EEA beyond 2016 until 2023. Once there is more clarity about the nature and content of the legal instruments adopted by ICAO for the implementation of the CORSIA, the Commission intends to present a further assessment and review of the EU ETS to the Council and the European Parliament. In the absence of an amendment the EU ETS would revert to its full scope from 1 January 2024.
These exemptions were also accompanied by other provisions for low emitters:
- Until 2030, flights performed by non-commercial aircraft operators with total annual emissions lower than 1 000 tonnes CO2 per year shall not be included in the activity that falls under the EU ETS directive.
- By way of derogation from Articles 3g, 12, 15 and 18a, where an aircraft operator has total annual emissions (full scope) lower than 25 000 tonnes CO2 or where an aircraft operator has total annual emissions lower than 3 000 tonnes of CO2 from flights other than those referred to in points (a) and (b) of paragraph 1 of article 28a (extra EEA flights and flights to outermost regions), its emissions shall be considered to be verified emissions if determined by using the small emitters tool approved under Commission Regulation (EU) No 606/2010 (*) and populated by Eurocontrol with data from its ETS support facility. Member States may implement simplified procedures for non-commercial aircraft operators as long as such procedures provide no less accuracy than the small emitters tool provides. “
More information can be found here.
What are the consequences of being included in the EU ETS?
All aircraft operators covered by the EU ETS are required to have an approved monitoring plan for annual emissions by 1st January 2010. However, aircraft operators shall not be required to submit monitoring plans setting out measures to monitor and report emissions in respect of flights which are subject to the derogations (extra EEA flights and flights to the outermost region see article 28a of the ETS directive)..
Each aircraft operator shall submit to the Walloon Air and Climate Agency an Annual Emissions Report (AEM report) by 2nd Thursday of March of the year following the emissions year. This AEM report must be submitted through the web-based application ETSWAP.
In the EU ETS 82% of the allowances are granted for free to aircraft operators, 15% are auctioned and the remaining 3% is held in a special reserve for new entrants or growing aircraft operator. If the aircraft operator wants to access free allowances, an approved ton-kilometre plan is required. The last amendment had no impact on free allocation. In general aircraft operators would receive the same number of allowances as they did in 2016 for every year between 2017 and 2030. In the absence of a revision the number of free allowances will be reduced every year from 2021 in line with the linear reduction factor applicable to all other sectors in the EU ETS.
By the 30th April of each year, an aircraft operator must surrender allowances or credits equivalent to its emissions. The aircraft operator can use either: allowances (EUAs or AEUAs) or credits up to a defined percentage (CERs or ERUs).
The ETSWAP is the Walloon web based application used by the AWAC for monitoring and reporting obligations. To open account, please contact us.
As a new entrant, formalities may differ according to the fact that you have an EU operator licence or not. For more information see the FAQ of the European commission on “historic aviation emissions and the inclusion of aviation in the EU's Emission Trading System (EU ETS)”, questions 44 & 45.
Walloon Air and Climate Agency
The Walloon Air and Climate Agency (AWAC) is one of the competent authorities in Belgium. You can either use the generic email address (email@example.com) or contact directly François Verpoorten who is in charge of aviation in the ETS team. Just below is the post address of the Agency:
Agence wallonne de l'Air et du Climat,
Avenue Prince de Liège n° 7 Bte 2,
B-5100 JAMBES – BELGIUM
Belgian National Greenhouse Gas Registry
All information can be found on this website.
More information on accredited verifiers is available in this document.
To get an overview of the legislation: