NBAA Convention News

ETS reporting process remains a headache

 - October 13, 2010, 5:38 AM

If you make even a handful of short flights into European airspace, there’s no escaping the countdown to the European Union’s contentious emissions trading scheme (ETS). The cap-and-trade scheme goes into effect on Jan. 1, 2012, but many operators have been battling with the preparatory bureaucracy for more than a year and those who have not yet made a start face a scramble to be ready to meet requirements that cannot be dodged without facing stiff penalties.

Here at NBAA, Universal Weather & Aviation (Booth No. 3927) has made it its business to stay on top of the thorny issue, and its online EU-ETS Reporting Resource Center (www.eu-ets.aero) is a source of information and guidance. The flight planning and support group has been working on plans to start offering direct assistance to operators with the monitoring, reporting and verification process.
“ETS is still totally misfitted to this part of aviation,” said Universal’s regulatory services supervisor Adam Hartley, who has followed developments for the scheme during the past couple of years. He expects to see the European authorities show more leeway on the requirements during the next year, but in his view this gives operators no reason to relax their preparations.

Hartley indicated that some operators who have registered their ETS reporting plans may need to adjust these to take into account possible changes in the way emissions have to be recorded and verified (see box). The official deadline is Aug. 31, 2011, for operators who have had plans registered and approved to submit updates to their emissions reports ahead of the initial carbon credit trading period in 2012.

“People need to be informed and aware of what they are getting into, and generally there is much greater awareness [of ETS] among North American operators today,” Hartley told AIN, referring to the costs that some operators are facing if they feel the need to use ETS consultants to complete the process. “Some annual fees [for ETS services] are very high and the tools used are too complex for an operator that is going to Europe just a couple of times per year.” Many of Universal’s clients are likely to emit only 40 or 50 metric tons of CO2 in Europe each year and so the company is looking to support them in a more economical way.

Deadline Looms
There  is less than six months to the March 31, 2011 deadline for verified 2010 emissions and activity reports to be submitted and there are doubts over what operators need to do to find an accredited verifier and how much the process will cost. For many in the business aviation community, the core dilemma is how user-friendly the rules for small emitters–defined as emitting less than 10,000 metric tons of CO2 per year–will prove to be in practice.

When the European Commission (EC) approved the so-called small emitters tool for calculating emissions from data generated by Eurocontrol, many bizav operators assumed that it would easy enough to figure out their own CO2 numbers and avoid the need to involve expensive consultants. More specifically, it was hoped that there would be no need to use accredited verifiers to check the emissions reports because the data would be accepted as having come from an approved, independent source.

However, there has been no official ruling to excuse small emitters from using a verifier. As things stand, operators accountable to national authorities in many of the 27 European Union (EU) states are struggling to find lists of the accredited verifiers that they are permitted to use. Even those who can find verifiers are still not clear as to what this service will cost them, mainly because authorities have yet to rule on whether to waive the costly site visits that are required to complete the process.

So far only the ETS authorities in Germany and France have published lists of verifiers for the aviation sector, and in the case of France, the companies listed have not completed the accreditation process and so are not yet approved to do the job. Accreditation bodies in other countries, including the UK, are still working on the applications from companies that have applied for approval, but in some states the ground rules and timetable for this key process have not even been confirmed, raising serious doubts as to whether operators assigned to these states will be able to meet the March 31 deadline. Failure to meet the deadline could trigger significant fines.

Prospective verifiers SGS and VerifAvia told AIN that operators should begin the ­process with companies that they believe are likely to be accredited, in the hope that they will be and that the completed ETS reports will then be accepted by the authorities.

Verifiers are divided as to whether site visits, even for small emitters, will be required. Paulomi Raythatha, UK product manager for SGS, said that site visits would be mandatory at least for the first year as this is the only effective way to ensure that operators are following an acceptable process to monitor and report emissions. However, Antony Barrett, business development manager with BSI, predicted that “sense will prevail” and that expensive site visits will not be required and that confirmation of this could come before the end of next month. VerifAvia CEO Julien Dufour explained that it will be down to individual states whether or not they waive the site visit, and he expects at least some will do so.

Pricing In Question
Several verifiers told AIN that they have yet to work out pricing, in part because of the uncertainty as to whether site visits will be needed but also because they are trying to work out what rates the market will bear. Because all the approved verifiers are expected to be based in Europe, in theory a small U.S. operator might have to meet the cost of a verifier crossing the Atlantic for several days. Pressed by AIN to give estimated prices for a small emitter’s verification, verifiers indicated that these could run from around $1,800 to $3,400. For a medium-sized operator, the estimates increased to up to around $12,000.

According to Universal’s Hartley, the verification process could be complicated by the fact that many of the accredited verifiers will have a background in dealing with ground-based industries and will have little or no appreciation of the aviation sector’s circumstances. He also pointed out that some EU national authorities are a long way behind in preparing to administer ETS reporting.

Operators have been assigned to one of the 27 EU member states for ETS administration, with some having the misfortune of being assigned to the less bureaucratically efficient of these. Making matters worse is that the lists of assigned operators are not accurate and operators could find themselves reallocated before they can complete the registration process.

The March 31, 2011 deadline to provide verified emissions reports applies only to those operators that ­registered to ­participate in the 2010 reporting period, and that
will result in free CO2 credits being assigned. Many operators who expect to be small emitters effectively decided that this would be more trouble than it is worth. Nonetheless, these operators will need to be ready to monitor and report their emissions from the start of 2012, regardless of how small their anticipated emissions will be in European airspace.