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With just days to go before the first Aviation EU ETS deadline, airlines face a patchwork of extensions

With just days to go before the first Aviation EU ETS deadline, airlines face a patchwork of extensions | SustainAvia, Gallehr, EU ETS
Fri 28 Aug 2009 – With the 31 August deadline just days away for aircraft operators to submit emissions monitoring plans in advance of the start of the Aviation EU Emissions Trading Scheme (EU ETS), a patchwork of deadline extensions is emerging from the Competent Authorities (CAs) appointed by EU states to administer operators. The official EU deadline comes barely a week after its formal publication of the list of operators who could be eligible to join the scheme. So far, extensions have been granted by Bulgaria, Germany, Greece, Hungary, Italy, Slovenia, Sweden and the United Kingdom. However, concerns have been expressed that carriers could lose their free allowance allocation if they do not comply with the 31 August deadline, regardless of any extension.
 
Yesterday, the UK’s CA, the Environment Agency, announced that regulations transposing the Aviation EU ETS Directive will come into force on 17 September, on which date – and not before – operators assigned to the UK can start submitting their application for emissions and benchmarking (tonne-kilometre) plans. Operators have then until 12 November to file online their emission plans. Operators who wish to submit an application for the non-mandatory benchmarking plan and benefit from the free allowance allocation should do so by 31 December, although the agency strongly advises operators to do this as close to 17 September as possible and preferably submit the emissions and benchmarking plans at the same time.
 
Failure to comply with the 12 November deadline on the emission plan submission could leave operators liable to a civil penalty, said the agency.
 
One EU state that is complying with the deadline of this coming Monday is France, despite finding that the number of operators it was originally expected to administer had jumped from 513 to 1,105 following the publication of the updated list of operators.
 
“We keep saying the deadline has been set by the European Commission, not by France,” said Philippe Langumier, Head of Environment at the DGAC, the French civil aviation authority and the administering CA. “We have not issued any legislative text and won’t do so until the end of the year at best. So there will be no sanction if an operator fails to submit a plan.
 
“But there is a difference between the activity [tonne-kilometre] monitoring, which is optional but necessary if the operator wants to apply for free allowances, and the emissions monitoring, which is mandatory. We are saying that operators on the earlier list should comply with the 31 August deadline and those on the new list will have a later date – the end of October is being considered.”
 
Langumier said of the original 500 or so operators on the original list, his team has so far managed to make contact with around 300, but as more than 100 have now been removed, the success rate is around 80%. The DGAC has to date received 65 activity plans and 90 emissions monitoring plans, he reported, but expects the response to be much higher come the deadline.
 
A dedicated member of staff has been assigned to track down the 600-odd extra operators that were added to the list but Langumier does not expect many of them, most based in the French Antilles, to meet the de minimis requirement to be included in the EU ETS.
 
“The problem will be with the hundreds of private operators who often have arrived just once since 2006 and are correctly on the list,” he said. “We will try to get in touch with them but we think it is not wise to track operators who came in 2006 and ask them to monitor their activity in 2010 or after. They might not even exist anymore. We intend to suggest a change to the Commission whereby occasional small operators would not have to submit any plan beforehand.”
 
Two consultancies specializing in the Aviation EU ETS are advising their airline clients, especially those who have just joined the revised list, to submit a preliminary plan by 31 August even if it contains just an outline or contact information, and then file again when the plans have been completed.
 
“That’s what is happening with a major Asian carrier administered by Spain,” said Julien Dufour of SustainAvia. “They must mail the preliminary templates to the Spanish Climate Change Office with a stamp dated 31 August or earlier, together with a letter explaining they had only just been informed and with no time to complete the plan, they would resubmit as soon as possible and, in the meantime, here are the preliminary plans.”
 
Dufour also believes that some operators administered by a member state with an extended deadline will still file a preliminary plan by 31 August in case it transpires that only those operators who have supplied tonne-kilometre plans by that date can apply for free allowances. He says that there is some fear that the extended deadlines in some member states are illegal as they do not comply with the EU Directive.
 
Sebastian Gallehr, CEO of Gallehr+Partner concurs. “Under the EU legislation, it is unsure whether airlines will get their free allocation of allowances up till 2020 if they do not comply with the official deadline,” he said. “Even if some of the member states have postponed the deadline for the submission of the monitoring plans, we strongly recommend still submitting even a preliminary plan to the CA. The risk of losing the free allocation rights for nine years if the formal submission does not take place is just too real.
 
“The crucial issue is, and will continue to be, that EU member states are legislating differently, so there will not be a level playing field for the aviation industry in the emissions trading market.”
 
However, it appears likely that many operators will miss the deadline. According to Dufour, Russian airlines have been told by the Russian CAA to not to submit plans until instructed to do so. As the CAA is against the Aviation EU ETS in principle, it wants all Russian airlines to act collectively on whether or not to submit plans. Indian airlines, too, must first submit their plans to the Indian Directorate of Civil Aviation for approval.
 
The International Air Transport Association (IATA) has advised its 182 member airlines caught by the scheme to submit their plans to their designated CA and follow the CA’s instructions on the deadline, whether 31 August or extended. IATA said that with the European Commission missing its own deadlines, there would be a knock-on effect and some airlines would struggle to comply in time.
 
“That is why we are looking to governments to be flexible and allow operators sufficient time to comply with deadlines to submit monitoring plans,” said Quentin Browell, IATA’s Assistant Director, Aviation Environment.
 
“We advised airlines, particularly non-EU airlines, that before submitting any information to an EU member state they may wish to seek guidance from their civil aviation authority or foreign affairs ministry and consider the options. They may also wish to consult their legal department. Following these legal and government consultations, they may wish to submit information ‘under protest’.”
 
It is not known how many airlines will heed this advice but it is reported that Lufthansa has decided to follow it, and will comply with the submission deadlines but ‘under protest’ for legal reasons.
 
Browell said IATA was not opposed to emissions trading as one of a number of methods that can help reduce aviation emissions but it had consistently been opposed to regional solutions such as the EU ETS and, instead, advocated a global sectoral approach.
 
“The EU ETS will lead to competitive distortions, it contravenes the 1944 Chicago Convention and the revenues collected are not earmarked for environmental purposes. However, even if there are to be legal challenges to the authority of the EU to apply its ETS legislation on emissions over non-European countries and international waters, IATA advises airlines to comply with the current requirements of the ETS so that they are not penalized for non-compliance in the future, for example by fines, withdrawal of rights to free emissions allowances or even bans from flying into Europe.”


Update 9 Sep 2009:
The German Emissions Trading Authority (DEHSt) has just announced that the deadline for the submission of monitoring plans for operators administered by Germany is now October 20.

Update 28 Sep 2009:
The Civil Aviation Agency of Latvia has extended its deadline to October 31.
 
 
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(list updated 28 September 2009)


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