UK hits operators with extra ETS admin fees

 - April 28, 2011, 1:00 PM

Aircraft operators assigned to the UK for compliance with the European Union’s emissions trading scheme (ETS) are already facing additional costs, even before the requirement to pay for carbon emissions begins in January 2012. The operators concerned are being assessed with so-called subsistence charges to cover administrative costs for ETS. Unlike most EU states, the UK is requiring its Environment Agency to recover these administrative costs in full and directly from operators.

U.S.-based corporate flight department Zimmer made just one flight to Europe last year in the company’s Challenger 604. This emitted 87 metric tons of carbon and resulted in a subsistence charge of £2,130.58 ($3,409) for the whole year. According to ETS consultant Shockwave Aviation, which assists Zimmer with ETS compliance, the equivalent cost to buy the carbon permits to cover this single flight, at average April 2011 market rates of €16.59 per metric ton, would have come to approximately $2,020.

But from January 2012, when ETS goes into full force, Zimmer and other operators assigned to the UK are going to be paying subsistence charges calculated according to their total carbon emissions in addition to bearing the actual cost of purchasing any emissions permits they need. These are additional costs not carried by operators assigned to EU states that do not require their ETS compliance agency to fully recover administrative costs.

As far as Shockwave is aware, the UK government is the only one requiring operators to cover the full administrative cost of ETS. The UK also charged operators fees to register their ETS monitoring, reporting and verification plans. The Environment Agency bills all registered operators for subsistence fees on April 1 based on ETS-related emissions in the previous 12-month period.

Josh McClintic, a pilot with Zimmer, told AIN that he finds it “ridiculous” that the UK alone charges subsistence fees for ETS. “Corporate aviation is just starting to regain its strength, but at the same time takes financial hits with fees that aren’t even relevant to the rules of the EU emissions trading scheme,” he commented.