EU states tread warily on naming and shaming aircraft operators that have failed to comply with EU ETS rules

EU states tread warily on naming and shaming aircraft operators that have failed to comply with EU ETS rules | Avocet,non-compliance,DEHSt,UK Environment Agency

Air China operates a weekly return flight between Munich and Athens

Mon 15 Dec 2014 – With barely three months to go before aircraft operators are due to report their 2013 and 2014 emissions for flights operated within the European Economic Area (EEA), a significant number of smaller operators and some high-profile airlines have yet to comply with the EU ETS regulations in force for 2012. Following an outcry over the inclusion of international flights to and from the EEA, and to allow ICAO to make progress on a global market-based measure, the EU backed down on the intended scope of its scheme. However, 20 months on, airlines from India, China and Russia, amongst others, have failed to surrender emission allowances for flights they operated within Europe in 2012. Despite the level of non-compliance, EU competent authorities have yet to name a single operator they have taken action against, mindful of the political sensitivities at stake.


In April, Germany announced it had issued fines totalling €2.7 million ($3.4m) to 61 aircraft operators from Russia and other countries – 44 of which are based outside Europe. The German Emissions Trading Authority (DEHSt) which administers the EU ETS indicated it would name those operators in July, which was then pushed back to the autumn and has now been postponed again until the first quarter of 2015. Airlines reporting to the DEHSt that have not surrendered the required emissions allowances for 2012 include Air China and Aeroflot.


Earlier in the year, the Dutch authorities were reported to have imposed an administrative fine on a Chinese airline – not named but believed to be China Southern, which operated regular flights between Amsterdam and Vienna – for failing to submit an annual emissions report for 2012. The airline subsequently failed to surrender allowances to cover almost 5,900 tonnes it emitted on internal EU flights in 2012. Under the statutory EU ETS directive, non-compliant operators must pay a penalty of €100 per tonne and are required to buy and surrender allowances to make up the shortfall.


The airline risking the heaviest fine for non-compliance is Ethiopian Airlines, which emitted nearly 20,000 tonnes of CO2 as a result of 1,200 intra-EEA flights in 2012 yet does not appear to have surrendered the required allowances, according to information from the publicly-available EU Transaction Log (EUTL), which records individual operator registry accounts and whether they have surrendered the correct number of allowances. The carrier reports to the Italian authorities.


The Flemish competent authority in Brussels is understood to have recently fined, amongst others, a large non-European airline, rumoured to be Saudi Arabian Airlines, around €800,000 for non-compliance with the EU ETS. Saudia, which did not respond to a request for confirmation, operated 546 flights within the EEA in 2012, emitting 14,337 tonnes of CO2.


The Flemish Department of Environment, Nature and Energy also declined to name the operator but confirmed it had issued fines for the year 2012. “The competent authority intends to communicate on the 2012 non-compliance (name and shame foreseen in article 16.2 of the ETS directive) when all 2012 compliance procedures have been finalised, and prefers not to publicly name operators on a case-by-case basis, in order to safeguard equal treatment,” a spokesperson told GreenAir in a statement.


Article 16.2 of the EU ETS Directive (EU ETS Directive 2003/87/EC) states that member states must ensure publication of the names of operators that are in breach of requirements to surrender sufficient allowances. However, it does not stipulate a time by when this should take place and each member state has transposed the directive into its national legal framework in a different way. However, it appears the states have come together to formulate a “harmonised approach” on tackling non-compliance in the aviation sector.


Under UK legislation, the competent authority in respect of the EU ETS (excluding Scotland), the Environment Agency, is required to publish a list of non-compliant operators by the end of each June. It would have been expected to publish the list for 2012 this past June but declined to do so on the grounds that all appeals procedures had not been exhausted. Following a recent response to a consultation on transposing amendments to the Aviation EU ETS directive in respect of further EU revisions to its scope, the UK government has said it will now publish a list by 30 June 2015, “once any civil penalties have been issued and the appeal period has expired without an appeal being made, or an appeal has been determined against the appellant or withdrawn.”


India, whose two main carriers Air India and Jet Airways are administered by the UK, has been a staunch opponent to the inclusion of their carriers in the EU ETS. According to Prashant Sukul, India’s representative to the ICAO Council, the airlines would not be complying with the scheme, even under the reduced intra-EEA scope. He told GreenAir in April that although EU and Indian officials had met over the issue, India had not given formal permission for the scheme to apply to its airlines.


Barry Moss, Chief Executive of aviation risk management firm Avocet, estimates up to 105 aircraft operators assigned to the UK are potentially non-compliant with their 2012 obligations, based on records from the EUTL. Neither Air India nor Jet Airways appear on the log, he confirms.


According to Moss, the UK has only sent 18 notices to non-compliant aircraft operators as of October, having identified them as a ‘priority group’ in terms of the seriousness of the breach and a need to secure future compliance for the coming year. He fears that so-called ‘small emitters’ – operators that emitted less than 1,000 tonnes of CO2 under the full scope of the EU ETS and which make up the bulk of the non-compliers – are likely to be let off the hook, since they have now been taken out of the scheme from 2013 onwards as a result of the small emitter exemption changes made earlier this year.


“Not only would this be in breach of legislation, it would be grossly unfair on all EU ETS emitters – aviation and stationary installations – that have incurred considerable effort, time and expense in order to comply,” he said.


He cautions small emitters to be aware that the 1,000-tonne exemption threshold is based on the full scope of the scheme, so it includes all flights to and from the EEA – the 28 EU member states plus Norway, Iceland and Liechtenstein – as well as within, and the onus is on each small emitter to notify its competent authority if it exceeds the threshold. “This makes it far more difficult for exempted small emitters to monitor compliance obligations and compliance costs are likely to be disproportional,” he warned.


The reduced scope of the Aviation EU ETS that applies until the end of 2016, together with the permanent removal of a large number of small emitters, has left the UK Environment Agency with regulating around 150 operators, down from a previous 512, estimates Moss.


“The EU should be seen to implement its laws within its own airspace, otherwise it loses all credibility,” he said. “If a global emissions agreement fails to materialise at ICAO in 2016 then we’re back to full scope EU ETS from 2017. MEPs and EU technocrats are saying there will be no more leniencies, but then we’ve heard that tune before.”




European Commission – Aviation and the EU ETS




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