Newsmakers 2009: Europe’s ETS proves to be a fiasco for operators

 - December 28, 2009, 8:50 AM

Twelve months ago many of the business aircraft operators who had any intention of flying in European airspace were probably still blissfully unaware of the continent’s new emissions trading scheme (ETS), despite the fact that the European Commission had given at least a couple of years’ notice of its intention to extend the cap-and-trade system to aviation. Beginning this month (Jan. 1, 2010), ETS becomes a reality with the start of a benchmarking period for measuring and reporting carbon emissions. The full process of monitoring, reporting and verification (MRV) coupled with the requirement to trade in carbon credits to cover actual emissions does not start until January 2012. However, significant numbers of business aircraft operators have failed to meet deadlines just to register their MRV plans with European authorities and theoretically could already be facing hefty fines.

The ETS is based on the fairly straightforward principle of “polluter pays.” Yet somehow, Europe’s bureaucrats have mismanaged the introduction of ETS with an array of confusing, self-contradictory claptrap that even the finest minds in the U.S. Internal Revenue Service would struggle to deliver.

Having set a deadline for registering MRV plans by August 31, the European Commission then dragged its feet until August 22 before publishing the actual lists of operators subject to ETS and to which of the 27 European States they would be required to report. Authorities in the UK, Sweden, Italy and Germany at least extended the deadline for a few more weeks. The other national agencies and the EC itself maintained a wall of silence and left operators baffled by the requirements and fretting over the possibility of being fined and, ultimately, having their aircraft seized for noncompliance.

Another major problem was that authorities in several EU member states appeared to have made no preparations whatsoever to handle the MRV registration process. So when operators tried to contact them they found, quite literally, that no one would answer the phone or respond to e-mails.

One of the shortcomings in the ETS registration process is the fact that the EC’s lists of aircraft and operators–supposedly drawn from Eurocontrol flight-planning data–are inaccurate and confusing. For example, many aircraft are shown as being registered to the service provider who files the operators’ flight plans on its behalf. The EC is preparing to issue revised lists of operators and aircraft next month.
Operators hope this will clear up much of the confusion, but based on the performance of European officialdom during 2009 this remains doubtful at best. In the meantime, officials are quietly conceding that they don’t actually intend to follow through with the threat of fines for noncompliance, further undermining confidence in the ETS process.