UK extends deadline for ETS

 - July 27, 2009, 6:55 AM

The UK government is pushing back the August 31 deadline for aircraft operators to register for the European Union’s new emissions trading scheme (ETS) and to file a plan for the monitoring, reporting and verification (MRV) of their carbon emissions. According to the British Business and General Aviation Association (BBGA), the revised deadline is likely to be around mid-November this year.

Other EU states have also been working toward an August 31 deadline for operators to register for ETS compliance. Industry sources now believe that they too will be obliged to push back the deadline since most of these states are understood to be even farther behind in the implementation process than the UK.

The UK deadline extension was expected to be formally confirmed in letters to individual operators before the end of last month. Behind the scenes, BBGA officials were unofficially informed of the decision on July 7.

The main reason for the delay is that the European Commission is preparing to issue an expanded list of operators who will be subject to ETS and the European countries who will be responsible for processing their ETS submissions. This is expected by the middle of this month, but sources close to the process have indicated that this might also slip since it falls in the middle of the European vacation season.

Operators who fail to meet the ETS registration deadline will be subject to an initial fine of £5,000 ($8,000), with an additional £500 ($800) charged for every day that they fail to complete the process. (See 'Emissions Trading for Aviation: the Theory'.)

According to EBAA officials, there is still widespread confusion as to how operators are supposed to meet their ETS obligations. There are also doubts about how effectively and uniformly the national agencies appointed to administer the program in each of the 27 EU states will fulfill their side of the bargain.

One business aviation leader close to negotiations with EU officials told AIN that the government agencies handling the ETS implementation have belatedly grasped how many small operators will be subject to the scheme and that they are having a hard time understanding that no list of operators will ever be definitive since non-EU operators who currently have no plans to fly into Europe might someday need to do so and will then need to register for ETS. There is concern that the registration process is too cumbersome and bureaucratic to allow operators to register quickly enough in time to make a trip on short notice.

It is only in recent weeks that the European Commission and bodies such as the UK Environment Agency have started to post detailed guidance on their Web sites. Operators can now find templates and exemplars for reporting MRV plans at the UK Environment Agency site and these are expected to be fairly consistent with those used by equivalent agencies in other states.

However, as of press time, the UK agency still hadn’t activated the process by which operators could file plans online, despite having insisted that only online applications will be accepted. As recently as early June, UK officials had been insisting that they would be ready in time to start accepting and processing ETS registrations. The sudden decision last month to push back the deadline was a significant climb-down by officials who appear belatedly to have accepted that they and the EC have underestimated the size of the task.

According to independent advisor David Carlisle of ETS Aviation (see 'Helping to Heal the ETS Headaches'), operators could easily spend between 23 and 40 hours simply analyzing the MRV requirements before they are in a position even to fill out the registration form for their MRV plan. He indicated that while many operators are simply “getting on” with this task, others are finding it daunting.

He predicted that significant numbers of operators would not have been able to meet the August 31 deadline for registration, adding that many outside Europe remain wholly ignorant of the entire ETS situation. Among those who have somewhat belatedly realized that ETS will apply to them are some business aircraft manufacturers themselves, since they routinely make delivery and sales demonstration flights into Europe.

The deadline extension for ETS registration could also allow time for UK officials to resolve issues such as exactly what operators need to do to calculate and verify their emissions reports. The business aviation lobby wants the European Commission to accept Eurocontrol’s Pagoda system as a tool for calculating emissions. The system, which calculates fuel burn and the resulting emissions directly from Eurocontrol’s own traffic data, has been endorsed by the European Business Aviation Association (EBAA) as the most efficient benchmark for this task.

EBAA chief operations officer Pedro Azua told AIN that the industry has not yet been shown results from technical trials to establish the accuracy of using Pagoda to calculate emissions. Unless operators can state the means they will use for making these calculations it is hard for them to fully file their MRV plans as required by their national agency. Nonetheless, EBAA has advised its members to file a plan by the deadline, even if they have to use vague wording such as “using a tool developed by Eurocontrol” in the section asking them to specify the means for calculating emissions.

Once operators have had their MRV plans approved, the next hurdle is to have their emissions reports and monitoring process independently verified by an accredited company. Again, EU and national agencies still haven’t confirmed the process they will accept for verification and no independent, aviation-specific verification companies have yet been accredited for the task. The authorities have promised to have this in place by year-end–barely allowing time for actual monitoring, reporting and verification to get under way, as required by law, beginning next January 1.

The verifiers will need to receive emissions reports from operators during the last three months of each calendar year to allow the verifiers to audit and submit their reports to the environment agency of the EU member state with which they are registered for approval during the first three months of the following year. ETS Aviation will advise its clients to establish a process of ongoing reporting and verification, through an annual subscription, so that this task does not result in a time-consuming bottleneck of paperwork.

As the starting point for ETS implementation, the European Commission has assigned more than 2,700 individual operators (ranging in size from major airlines to small private flight departments) to one of 27 national agencies for the purposes of compliance. EU-based operators have been assigned to an agency in their home state, while non-European operators have been assigned to a specified EU state–generally the one to which they have flown most frequently.

So, for example, many U.S. corporate flight departments have been assigned to the UK for ETS jurisdiction, as have the U.S. fleets of fractional ownership provider NetJets and Jet Aviation. This has resulted in the UK Environment Agency being assigned some 750 operators, and some in the industry believe this total could actually be much higher.

At an ETS workshop in early June, the Environment Agency insisted that it will be assigning more manpower to deal with the wave of ETS bureaucracy, in a bid to dispel the widely held belief that the authorities will not be able to cope with the workload and will so break their own deadlines for ETS compliance.