EU-ETS 101: Introduction to EU-ETS for Business Aviation

EU-ETS for Business Aviation 101

This aviation blog post is part of a series on EU-ETS for Business Aviation.

Despite media coverage indicating otherwise, the European Union Emissions Trading System (EU-ETS) is a program that must be adhered to. Compliance is mandatory if you want to fly to, from or within the EU. If you’re non-compliant, you run the risk of penalties – both financial and operational. EU-ETS compliance is not necessarily expensive, but it can be time-consuming. Using an experienced 3rd-party provider can help offload administrative details, allowing you to focus on your core business and maintain straightforward access to the EU.

1. What is EU-ETS?

The EU-ETS for Aviation Activities is a self-reporting system where operators monitor and report aircraft engine emissions through fuel consumption and the resulting tons of CO2 emitted each calendar year. The EU-ETS applies to all flights to, from or within EU member states, European Free Trade Association (EFTA) countries and EU outlying territories. The EU-ETS is a “cap and trade” program initiated by the European Commission (EC) and designed to progressively cap allowable emissions. The EU’s goal is to reduce carbon emissions and make the program a global initiative by serving as a model.

2. Who implements this regulation, and when did it start?

The EU-ETS directive was introduced in 2003 and expanded to include aviation in November 2008. Emission monitoring began in 2010. The first two years – 2010 and 2011 – were a pre-trading period in which operators registered, established monitoring programs and reported and verified annual emissions but were not required to purchase carbon credits as a result of emissions.

Beginning in 2012, EU-ETS goes “live,” and most carbon emissions will have to be offset with carbon credits. While the EC issued the EU-ETS directive and proposed a program framework, it’s the responsibility of each EU member state to apply the law and administrate the program. No member state may abstain from EU-ETS, and each state has specific implementation dates and requirements. Operator non-compliance is subject to fines and penalties from individual member states.

3. Is this regulation mandatory for all operators?

The regulation is mandatory. Operators who fly to the EU and have not yet gone through the EU-ETS registration process need to start immediately. Note that this program does not cover operators who overfly the EU or make tech stops at non-EU locations. For example, if you’re flying from the United States to Egypt and make a tech stop on the Isle of Man or in Switzerland (The Isle of Man and Switzerland do not currently participate in this program, but that may change in the future.), you’re not subject to EU-ETS reporting, even though you’re transiting EU airspace. However, you must report carbon emissions for all flight legs to, from and within the EU member states, EFTA countries and EU outlying territories.

[Note: Thanks to reader Neil Duffy at ICM ETS Ltd for providing a correction to the section above.]

For your reference, the following is a list of EU Member States, EFTA countries and EU Outlying territories:

EU Member States: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, the United Kingdom

EFTA (European Free Trade Agreement) Countries: Iceland, Liechtenstein and Norway

EU Outlying Territories: Akrotiri, Aland Islands, the Azores, the Canary Islands, Dhekelia, French Guiana, Guadeloupe, Madeira, Martinique, Reunion, and Saint Martin (French)

4. What’s the first step to meet EU-ETS rules?

If you make an applicable trip to the EU, it’s your responsibility to check to see if you’ve been assigned to a member state. Assignments take place once or twice a year. If you’ve not yet been assigned, it’s your responsibility to submit your operator name, contact information and aircraft fleet list so you can be assigned. Eurocontrol (the European Organisation for the Safety of Air Navigation) will conduct a historical analysis to determine where you’ve operated to most often in the past and make a member state assignment based on that assessment.

Once assigned, you begin monitoring CO2 emissions and report them to your member state according to your approved plan, typically once a calendar year. Be aware that some member states require backdated emissions reports. Last year, the UK did not require operators who were not on the EC Operator List before that year to submit a report for the previous year. However, this could change in 2012. Other countries, such as Italy, required 2010 reporting – even if you were not yet assigned to their member state at that time. So, if you operated to the EU in 2010 and were assigned to Italy’s operator list only in 2011, you’re still required to provide a verified emission report for 2011 and a backdated and verified report for 2010. Best practice is to check with your assigned member state to clarify its requirements.

If you are looking for more information on how to comply with EU-ETS or if you would like to subscribe to EU-ETS activity reminders, you can visit our free EU-ETS Reporting Resource Center.


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You can also read our next post in this series entitled EU-ETS for Business Aviation: Implementation, Costs, and Risks of Non-Compliance.