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UK & Swiss ETS Important Update: Inclusion of Flights in Emissions Trading Schemes

01/12/2023



At the COP27 held in Sharm-el-Shekh on November 18, 2022, the United Kingdom (UK) and Switzerland signed a memorandum of understanding (MOU) to include flights between the two countries in their respective Emissions Trading Schemes (ETS). This milestone agreement demonstrates their commitment to combatting climate change and reducing greenhouse gas emissions from aviation.
 
Here are the key points outlined in the MOU: 
 
  • Scope: The UK commits to including flights departing from Great Britain (GB) and arriving in Switzerland in the UK ETS, aiming for full coverage from January 1, 2023. 
  • Information Exchange: Both countries express their mutual intention to exchange relevant information regarding the inclusion of flights between Great Britain and Switzerland in their respective ETS. 
  • Policy Development: The MOU acknowledges that the arrangement does not preclude any wider policy development. Both countries remain open to further policy advancements that align with their emission reduction goals. 
  • Future Cooperation: The MOU emphasizes the intention of both participants to discuss potential areas of future cooperation, recognizing the importance of ongoing collaboration to address climate challenges effectively.
Prior to the signing of the MOU, Switzerland had already taken a significant step towards integrating flights between Switzerland and Great Britain into its emissions trading scheme. On 4th May 2022, Switzerland adopted a revision of the CO2 Ordinance on the Reduction of CO2 Emissions. This revision included flights from Switzerland to Great Britain in the Swiss ETS, effective from 1st January 2023. The subsequent MOU between Great Britain and Switzerland further solidifies their commitment to comprehensive coverage of aviation emissions within their respective trading schemes.
 
In summary, from 1 January 2023:
 
  • The scope of UK ETS is expanded to include flights (other than exempted flights) departing from Great Britain and arriving in Switzerland.
  • The scope of Swiss ETS is expanded to include flights (other than exempted flights) departing from Switzerland and arriving in the United Kingdom.

The EU Commission has recently unveiled a pivotal resource, the "Threshold and Reporting Obligation Guidance for EU ETS" (TAROG).

 
This comprehensive document stands as a beacon for comprehending the 2023 thresholds and obligations crucial for operational compliance within the ETS framework. The interpretation of obligations outlined in TAROG applies specifically from January 1st to December 31st, 2023, perfectly aligning with the imminent verification season.

The TAROG can be downloaded here.

 
Applying for UK ETS Aviation Free Allocation Entitlement
 
Furthermore, as a result of these changes, operators with historical aviation activity, including flights between Great Britain (England, Wales, and Scotland) and Switzerland (CH), can now apply for a UK ETS Aviation Free Allocation Entitlement (AFAE). This allocation is based on verified tonne-kilometre (TKM) data from 2010 and/or 2014. Operators must meet certain criteria to qualify for an AFAE, including having verified TKM data that includes GB-CH flights.

Note: The UK ETS AFAE Scope is based only on flights from Great Britain. Great Britain (GB) comprises England, Wales and Scotland.

Aircraft operators seeking a GB-CH AFAE must have emailed their applications to etaviationhelp@environmentagency.gov.uk by 31 March 2023. As this deadline has passed, it is recommended to contact the Environment agency to check if you are still eligible to apply for AFAE.

The applications are dependent on whether the operator has previously applied for free allocation entitlement (FAE) under UK ETS and/or EU ETS. The applications were done in four categories:
  1. Operators who already applied for FAE under UK ETS by 31 March 2021 – have no further action to take.
  2. Operators who already applied for FAE under EU ETS by submitting TKM data to Environment Agency but did not apply for FAE under UK ETS – please refer to the EA's guidelines here.
  3. Operators who already applied for FAE under EU ETS to an EEA State Competent authority but did not apply for a FAE under UK ETS – ETS – please refer to the EA's guidelines here.
  4. Operators who did not apply for FAE under EU ETS or UK ETS - ETS – please refer to the EA's guidelines here.
For more information on the application process, please refer to  UK ETS Aviation Newsletter Issue 9 (January 2023) on the Aviation Free Allocation Entitlement (AFAE)

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