F.A.Q. - Aviation EU ETS

In 2012, the EU-wide cap on aviation emissions is set at 97% of the average annual emissions for the years 2004-2006. In 2013-2020, the cap is lowered to 95%.

Aviation ETS concerns all aircraft operators of all origins operating flights to, from and within the EEA.

Free allowances are allocated proportionally to an airline’s share in the total payload in 2010 expressed in tonne-kilometers.

It is expected that airlines will have limited abatement options so they will have to engage into carbon trading.

Aircraft CO2 emissions are an exact multiple of fuel consumption.

Airlines have a choice between two methodologies for monitoring fuel use.

Uncertainty assessment is an integral part of the monitoring and reporting guidelines.

Operators subject to the European Union Emissions Trading System (EU ETS) are each assigned a Competent Authority (CA), to which they must report. These operators have specific obligations.

Aviation ETS raises numerous financial, administrative, legal, commercial and technological challenges for airlines.

​Operators are required to have their reported emissions data and Annual Emissions Report (AER) verified by an independent third party called a verifier.

Article 11 of the Monitoring, Reporting, and Verification Regulation (MRR) requires aviation operators to create a Monitoring Plan (MP) approved by the competent authority.

The legislative proposal presented by the EC on 20 November has a significant impact on the EU ETS administrative process and on the number of allowances to be surrendered.

As EU-ETS is a 'Cap and Trade' scheme The first allocations were made in the year 2012. The European Commission published the benchmark values used to allocate greenhouse gas emission allowances free of charge to more than 900 aircraft operators. 

The Union Registry is an online database hosted and managed by the European Commission. It operates in a similar same way to an internet bank account, and records allowance allocations for aircraft operators, annual verified emissions, transaction history of allowance transfers and surrenders of allowances.

The Operators emitting less than 25,000 tCO2 per year or operating fewer than 243 flights per period for three consecutive 4-month periods are considered small emitters. Most business jet operators and corporate flight operators are small emitters.

The ETS Prohibition Act gives the US Secretary of Transportation the authority to prohibit US aircraft operators from taking part in the scheme.

Under the 'stop the clock' proposal from the European Commission (EC), aircraft operators have two options:
- Continue to report all Annex 1 flights (both 'extra-European' and 'intra-European' Annex 1 flights).
- Report 'intra-European' Annex 1 flights only. The condition is that aircraft operators return the allocated free allowances that correspond to the reported 2010 tonne-kilometre data in relation to 'extra-European' flights.

The European Commission and some Competent Authorities have published several useful FAQs on their web sites.

The Competent Authority of Italy requires aircraft operators to submit their AEM plan, AEM report and verification opinion statement using a Qualified Electronic Signature.

Aircraft operators must surrender carbon allowances before 30 April (N+1). 

For the 2013-2020 period, a Special Reserve of free allowances is set aside for new entrants and fast-growing operators. Eligible operators must submit a tkm monitoring plan and monitor their tkm in 2014.

The European Commission proposes to apply EU ETS to European regional airspace from 1 January 2014.

Competent Authorities are publishing guidance addressed to aircraft operators to inform them of their reporting and surrendering requirements for the 2013 monitoring period

The latest EU ETS regulation continues to restrict EU ETS to intra-European flights for the period 2013-2030 and exempts small emitters below 1,000 tCO2 for the period 2013-2030.

Due to the revised geographical scope of EU ETS after the entry into force of Regulation (EU) N° 421/2014, the number of free aviation allocations that will be attributed to each aircraft operator during the period 2013-2016 has been revised.

Find below the link for the most frequently asked questions on the Swiss ETS and UK ETS.