Emission Schemes Are Changing – Here’s Your Breakdown
Keeping up with and adapting to ever-changing and complex carbon emissions regulations has long been a challenge for business aviation operators. In 2019, that task will become more challenging, as two new trading schemes – SWISS-ETS (CH-ETS) and CORSIA – will join the regulatory landscape. The result is that there are now three separate emissions programs affecting segments of the general aviation industry concurrently.
Understanding the programs’ regulatory requirements, monitoring methodology, tools, deadlines, applicability and exemptions is critical to creating a strategy for compliance.
Below is a review of all three programs:
1. EU-ETS background and upcoming changes
In simple terms, EU-ETS for aviation is a mandatory regulation requiring all non-commercial operators who travel into, out of, and between EU Member States, European Economic Area (EEA) Countries, and applicable EU Territories to monitor their CO2 flight emissions starting 1 January 2010. Operators emitting greater than 1,000 tonnes of CO2 under the full scope (in, out, and within the EU) in a monitoring year must submit an Annual Emissions Report, purchase carbon allowances equal to the emissions on intra-EU flights, and surrender them to their assigned Member State no later than April 30 the following year.
What’s the latest
- EU-ETS “Stop the Clock” reporting criteria has been extended through Monitoring Year 2023
- Exemption thresholds remain the same. Private operators with 1000+ T/Co2 Full Scope (to, from, within the EU) are required to report
- Due to impending Brexit for the UK, 2018 Annual Reporting and surrender deadlines have been moved up to March 11 and March 15, 2019 respectively for operators assigned to the UK
- EU Member States continue to identify non-compliant operators from previous Monitoring Years, imposing fines and requiring operators to complete ALL requirements retroactively
2. SWISS ETS and how it works
On July 1, 2017, the Swiss Federal Council entered into force an ordinance to institute an emission trading scheme for Switzerland. SWISS ETS (CH-ETS) for aviation is a mandatory regulation for specific operators to track flights between Switzerland and the EEA and intra-Switzerland. Operators with emissions of 1,000+ T/ CO2 (Full Scope) for EU-ETS in 2016, are required to comply with SWISS ETS effective Jan 1, 2018. The Swiss tonne-kilometer (TKM) compliance requires that operators submit a monitoring plan, track distance / payload, and compile an annual report of applicable flights. TKM monitoring plans were due Sept 30, 2017, and the applicable reports are due March 31, 2019. Note that all submissions for these reports are expected to be done via email.
What do I need to know?
- TKM Monitoring Plans are past due and need to be submitted asap for any applicable operators that have yet to submit a TKM Monitoring Plan
- SWISS Annual Emissions Monitoring Plans due in October 2018
- 2018 TKM Annual Reports for SWISS ETS are due March 31, 2019
- SWISS ETS requires accredited 3rd Party Verification of Annual Report prior to submission
- Flight logs listing registry, aircraft type, city pair, payload are an example of documents acceptable for verification
- Universal’s Emission Reporting Portal will identify applicable SWISS-ETS flights for subscribed operators
3. CORSIA and the future of emission schemes
In 2016, ICAO approved guidelines to implement the Global Offsetting and Reduction Scheme for International Aviation (CORSIA). This means that CORSIA requires all aircraft operators to monitor their emissions on ALL international flights (Country A – Country B) beginning Jan 1, 2019. Mandatory regulation requires all international operators to submit a monitoring plan to their Member State by the end of 2018. Beginning Jan 1, 2019, operators should track emissions on all international legs. At the end of each monitoring year, operators will compile flight data in an Annual Emissions Report. Based on their annual activity and emissions, operators over 10,000+ T/ CO2 Full-Scope (between any two countries) annually must submit to an accredited verifier for certification. Total emissions on applicable flights (between participating Member States) are required to be offset via the purchase of carbon credits. Note that the carbon credits are required to be tallied and surrendered every third monitoring year.
What’s the latest developments
- ICAO has yet to publish the official Monitoring Templates and tools to begin the administrative process. We are expecting that this information will be known in, or around, July 2018, but no firm date has been provided. Each country will then determine the method of reporting (email, portal, etc.)
- Monitoring plans will be submitted in Fall 2018 to the Competent Authority
- Monitoring of flight activity begins Jan 1, 2019
- Universal’s Emission Reporting Portal will identify applicable CORSIA flights for subscribed operators
4. Mandatory regulations for operators
Remember, all three programs (EU-ETS, SWISS ETS, CORSIA) are mandatory, but applicability and exemptions vary by program. These programs are all operating concurrently and it’s expected that they will do so for the foreseeable future. It’s important that operators know which program(s) apply to them and understand the requirements for each.
Significant monetary penalties are applicable for non-compliance and have already been applied to operators at great expense. The complexity and risk regarding these programs is increasing and changes to regulations and applicability can occur without operators being directly notified. Eventually, the goal of regulators is for the SWISS ETS and EU-ETS schemes to be absorbed into CORSIA and all operators will comply with one program globally.
5. What are the steps I need to take to comply
A breakdown of the steps of the emissions compliance life cycle include:
- Identifying your Competent Authority
- Registering a Monitoring Plan
- Managing Fleet Information
- Monitoring flight data
- Calculating applicable data (distance / payload / fuel / Co2)
- Validating data
- Creating annual report
- Evaluating applicability/exemption
- Collecting supporting documentation
- Submitting annual report
- Verifying annual report
- Establishing a Holding Account
- Managing a Holding Account
- Purchasing carbon allowances
- Surrendering carbon allowances
- Reconciling penalties and non-compliance issues
6. What resources are available to help?
To help operators understand and comply with the various emissions trading schemes, we’ve developed free resource tools and templates for operators who wish to handle reporting on their own, as well as paid subscription software, all of which can be accessed from our Aviation Emissions Resource Center (www.eu-ets.aero). Operators with specific emissions trading questions can call our 24/7/365 Global Regulatory Services Team at: Worldwide +1 (713) 378-2734 or N. America +1 (866) 864-8415.
7. Next updates
Moving forward, we’ll continue to proactively provide updates and guidance for all emissions programs with the next CORSIA update anticipated for July 2018.