Switzerland draws up regulation to include international aviation in its ETS as it negotiates linkage with the EU ETS
(photo: Geneva International Airport)
Mon 25 June 2012 – Switzerland is to demand all aircraft operators, domestic and international, serving its airports to record tonne-kilometre (TK) data from 1 January 2013, with the submission of monitoring plans for approval required by the end of this September. The move follows ongoing discussions between the European Union and Switzerland on linking the EU ETS and the Swiss ETS from 2014, with the EU insisting that Switzerland includes civil aviation emissions as well as those from stationary installations in the Swiss scheme. In anticipation that the negotiations prove successful, all aircraft operators operating to and from Swiss airports above the de minimis set under the EU ETS aviation directive will be required to join the Swiss ETS from 2014. While there should be little administrative burden as most airlines likely to be impacted will be already monitoring and reporting the data to their relevant EU authority, airlines from countries already in dispute with the EU over its unilateral scheme will be faced with another dilemma as non-compliance carries potential Swiss fines.
The current Swiss ETS constitutes a voluntary alternative to a domestic fuel tax but the non-EU country is seeking a more ambitious emissions reduction scheme that links to a common European carbon market with more environmental and economic benefits. Negotiations between the European Commission and Switzerland formally started in March 2011, which is the first time the EU has discussed linking its ETS with the emissions trading system of a third country. The prior acquisition of TK data by aircraft operators is a pre-requisite for the conclusion of an agreement.
A revised CO2 Act of December 2011, which is scheduled to enter force on 1 January 2013, gives the Swiss Federal Council the power to require aircraft operators to participate in the Swiss ETS. As part of the Act, a regulation called the Data Acquisition Ordinance has been drafted and is due to come into force on September 15. The Ordinance solely regulates the one-time collection of data in 2013 and the subsequent reporting process in 2014. For the implementation of the TK data acquisition process, progress on the EU-Switzerland linkage negotiations is essential, says Switzerland. Depending on the status of these negotiations, however, the Swiss Federal Council may also consider the option of collecting the data at a later date and the Ordinance amended in line with the postponement.
The Ordinance is currently out for a public consultation conducted by the Federal Department of the Environment, Transport, Energy and Communications (DETEC) that closes later this week (June 30). According to the consultation document, around 350 aircraft operators are impacted.
Submission of monitoring plans to the Swiss Federal Office of Civil Aviation (FOCA) for approval by September 30 and the subsequent collection of data is mandatory for all operators – domestic and international – and non-compliance carries a fine of up to 20,000 Swiss francs ($20,800), or for a serious violation up to 40,000 Swiss francs. Plans, which describe how the data is to be collected and which method is to be used for calculating tonne-kilometres, should be in accordance with the procedure specified in the EU ETS.
However, aircraft operators who already possess an approved monitoring plan within the scope of the EU ETS may use it as the basis for the Swiss requirement. DETEC maintains the short period between the entry into force of the Ordinance and the cut-off date for submitting monitoring plans to be sufficient, since aircraft operators will be informed accordingly before the regulation is enacted and many will be able to make use of existing plans.
Those with experience of aviation’s inclusion into the EU ETS are not so sure. EU ETS adviser Andrew Pozniak of Geneva-based Green Aviation Solutions argues the Swiss should have learned from the EU experience. “The EU’s deadlines were unfortunately an international fiasco of overly ambitious dates, resulting in confusion, higher costs and then the inevitable delays,” he said. “For most Swiss-based operators not already in the EU ETS this will be something entirely new, and difficult to comprehend and achieve in time.
“For other operators updating their existing EU plans, it may become quickly evident that many of those people who completed their original TK plans have moved on to other roles or companies and leaving new people to make sense of it all. I expect a lot of lobbying from the aviation community to have the dates pushed back.”
The linkage of the Swiss ETS and the EU ETS, however, is likely to have only a limited overall impact for most operators, said Julien Dufour, CEO of Paris-based VerifAvia, as most operators flying to Switzerland are already in the EU scheme and fly there on a marginal basis.
Those that will face a significant change, he said, are likely to be Swiss International Air Lines, which will have all its domestic and international flights to non-EU states included, and those Swiss commercial operators that are currently below the threshold or are operating domestic flights.
Dufour said it was not clear why the Swiss authorities were asking all operators to report TK data. “With the EU ETS, the purpose of reporting TK data is to apply for free allowances, which is optional,” he explained. “Operators already in the EU ETS have already reported their TKs in 2010 on all flights between Switzerland and the EU/EEA states and have received their free allowances.”
He is hopeful that for operators the rules applying to the Swiss ETS will be the same as for the EU ETS and the process of adding Switzerland will be the same as that applying to non-EU EEA states such as Croatia, which will join the EU ETS in 2014.
In a covering letter to the Ordinance consultation, DETEC said the Swiss Federal Council would take into account international developments concerning the introduction of global measures to limit CO2 emissions from civil aviation. The consultation acknowledges the international “differences of opinion” on the inclusion of aircraft operators from third-party states into the EU ETS. “At present, it is not possible to predict how and when these international differences will be resolved,” it adds.
However, by unilaterally including non-Swiss and non-EU/EEA aircraft operators in its own emissions trading scheme, Switzerland is very likely to run into the same international opposition faced by the European Union.
With just three months to meet Swiss demands for the submission of monitoring plans, it is unlikely whether India and China, which have currently prohibited their airlines from complying with the EU ETS, would grant permission for those same airlines to submit plans to FOCA.
Proposed legislation before the US Senate is aimed at preventing US aircraft operators specifically from complying only with the EU ETS and does not cover similar schemes from other countries.
The question for Swiss negotiators is whether they are prepared to face the inevitable storm that inclusion of international aviation into their scheme will cause in exchange for the wider benefits of linking with the EU’s larger and established carbon market.