European ETS fiasco riles bizav

 - September 29, 2009, 6:25 AM

The bureaucratic torpor and confusion that has mired the initial registration process for the introduction of Europe’s new emissions-trading scheme (ETS) has brought the cap-and-trade approach to reducing aviation’s carbon footprint into disrepute, according to the European Business Aviation Association (EBAA). The group is launching a new lobbying effort aimed at convincing members of the European Parliament that, as it predicted, the cost burden entailed in bringing small operators into ETS has vastly outweighed the minuscule contribution that these aircraft make to air transport’s combined output of carbon dioxide (CO2).

What’s more, according to EBAA president and CEO Brian Humphries, ETS now threatens to have the unintended consequence of delivering a competitive advantage to those non-European executive charter operators who have managed to escape the requirement to report and trade in carbon emissions. EBAA’s members have reported that quite large non-European operators do not fly more than ETS’s baseline threshold of an average of fewer than 243 flights over three consecutive four-month periods in European airspace and so are not subject to emissions trading. This means that they are not incurring the associated costs now hitting just about all European operators for which this is a low threshold because the majority of their flying is within the continent.

“We are already aware of at least five N-registered [U.S.] operators who are managing to take [charter] business away from European operators in this way,” Humphries told AIN. “So long as they do fewer than 243 flights they can operate for free, and that means more unfair competition.”

New studies by the EBAA have estimated that a medium-sized European business aircraft operator will incur costs of around €70,000 ($99,000) in the first year of ETS. EBAA says that the EC has ignored the fact that operators have to carry this additional burden at a time when the industry is already enduring a continuing downturn in demand.

Over the past couple of months, the main challenge facing operators has been simply to meet the initial requirement to register a plan for monitoring, reporting and verification (MRV) of CO2 emissions from their fleet. The August 31 deadline came and went, with many operators desperately struggling to work out who they are supposed to report to and how to complete the process in the absence of clear guidance from most of the national authorities that are supposed to be implementing ETS.

Sweden and Italy belatedly have confirmed extensions to the August 31 deadline for operators to register for Europe’s ETS. Italy gave operators until September 30 to file plans for monitoring, reporting and verification of carbon emissions, while the Swedes have granted an extension to October 15.

The UK’s Environment Agency extended the deadline until November 12 and did not have its online portal for registering MRV plans (the only acceptable means for doing so) available until September 17. Its German counterpart indicated that it will allow an additional six weeks or so, taking the unspecified deadline into mid-October.

In theory, the August 31 deadline still applied in the other 23 European Union states, despite the fact that the European Commission published a revised list of operators subject to ETS only on August 22. Furthermore, according to EBAA, the EC’s revised list of operators is still far from comprehensive and is riddled with errors, such as identifying flight-planning groups that file operators’ flight plans with Eurocontrol as if they themselves were the actual operators of the aircraft concerned.

The list allocated each of the operators to a so-called “competent authority” in one of the 27 member states of the European Union. However, research by AIN in attempting to contact these authorities revealed that in many cases they have failed to make adequate preparation to handle the high volume of bureaucracy associated with ETS. In many cases, the little information available was published only in the local language, rendering it useless to the majority of foreign operators.

In some cases operators have complained that they were unable to make any contact with their assigned competent authorities, with repeated phone calls and e-mails going unanswered in the frantic days before the August 31 deadline, which fell at the conclusion of the European vacation season. As of the middle of last month, more than two weeks after the deadline, the Hungarian government still had not even confirmed which of its departments would handle ETS.

Any operator included on the EC list who does not meet the deadline(s) for registering MRV plans can be fined approximately $8,000, with an additional $800 for each day that it is late in filing. However, according to the EBAA, the national authorities implementing ETS on behalf of the EC are not expected to impose these penalties due to the long delay in publishing the list of operators and subsequent serious difficulties operators experienced in trying to register their MRV plans.

AIN contacted the EC to ask why its member states’ competent authorities seem so ill-prepared for ETS and whether the registration deadline and associated penalties can be enforced, given its failure to publish an accurate list of operators in a timely way. The EC’s ETS “help desk” declined to respond to any questions and advised AIN to monitor the “Frequently Asked Questions” page of its Web site for possible updates. Indirectly acknowledging some problems with ETS implementation, the EC vaguely alluded to “pragmatic solutions” being found while making no firm commitment to granting greater flexibility and assistance to aircraft operators.

Meanwhile, the EC has rejected a long-standing proposal to use Eurocontrol’s Pagoda air-traffic data system as a tool for calculating aircraft emissions. Instead, it is evaluating a revised version of Pagoda dubbed the ETS support facility and is expected to accept that as a calculation tool. EBAA is pressing for data from the ETS support facility to be accepted as fully verified data that does not need to be independently verified at further cost to aircraft operators.

EBAA believes that the ETS support facility has a small margin of error amounting to less than 1 percent. On this basis, it believes there is a case for the EC to grant further latitude to the exemption that permits operators generating fewer than 10,000 metric tons of CO2 per year to escape ETS. It has argued that this threshold could be raised to 50,000 metric tons.

According to EBAA, of some 6,000 operators on the EC list for ETS, around 5,000 of these collectively account for less than 1 percent of total aviation CO2 emissions. “This proves that the decision to include corporate operators in ETS was ridiculous,” said Humphries. “It is a bad regulation, badly executed.”

In new guidance notes on ETS, EBAA is advising operators to file even the most basic of MRV plans, giving details of their operation and a simple declaration of how they intend to comply. On the question of how they will monitor emissions in terms of metric tons of CO2 per kilometer flown, the association recommends the following statement: “Eurocontrol’s ETS Support facility will be used to determine fuel consumption over the monitoring period. The system records the aircraft type and flight distance. The system knows of the approximate fuel burn rate per distance flown for the aircraft type and hence can calculate the fuel consumption and emissions for each flight.”