GreenAir Newsletter 22 February 2019 on GreenAir Online

GREENAIR NEWSLETTER 22 FEBRUARY 2019

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Europe presses ICAO Council for decision on CORSIA’s carbon offset eligibility criteria

Fri 22 Feb 2019 – Europe is pressing the governing ICAO Council to approve at its current 216th Session the emissions units criteria (EUC) that will underpin the eligibility of carbon offset credits that can be used under ICAO’s CORSIA scheme. The EUC are a key piece of the whole CORSIA scheme and they are essential to its environmental credibility, a European representative on the Council told GreenAir. A draft of the criteria has been in circulation for over a year and a group within ICAO’s CAEP technical committee has been carrying out informal testing of some offset programs against the criteria, as well as providing recommendations on the Technical Advisory Body (TAB). Made up of experts, the TAB will recommend to the Council on eligible emissions units. States have been contacted to nominate candidates for the TAB and provide comments on the EUC for consideration and approval at the Session, which runs until March 15.

The Council provisionally approved at its 212th Session in November 2017 the design elements eligible offset credit programs must meet and also eight eligibility criteria:

Programs must generate units that represent emissions reductions, avoidance, or removals that are additional.
Credits must be based on a realistic and credible baseline.
Credits must be quantified, monitored, reported and verified.
Credits must have a clear and transparent chain of custody within the offset program.
Credits must represent emissions reductions, avoidance or carbon sequestration that are permanent.
Credits should be generated from projects that do not cause emissions to materially increase elsewhere (i.e. leakage).
Credits are only counted once towards a mitigation obligation, with measures in place to avoid double issuance, double use or double claiming.
Credits must represent emissions reductions, avoidance or carbon sequestration from projects that do no net harm.

Around 30 States responded to a letter sent by the Council President in November 2018 asking for comments on the EUC, with many responding positively and calling on ICAO to approve the criteria and swiftly move towards the completion of the full CORSIA Package and its final implementation elements.

However, a point of contention between States remains over vintage dates, or the age of the offset credits that will be permitted. A fundamental principal of the CORSIA scheme, many believe, is that an offset credit program must provide an assurance that the emissions reductions would not have occurred in the absence of the scheme. Certain countries, including Brazil, have previously indicated that there should be no restrictions. Some observers say this is partly due to the country holding a considerable quantity of unused carbon credits under the UNFCCC’s Clean Development Mechanism (CDM) that it wishes to dispose of. The CDM has a poor record when it comes to additionality, found a report by Oeko Institut published in 2017 (see article).

For this reason, European States have told ICAO that it is important to reach an agreement on a vintage date and any continued delay on a decision is unacceptable and would have severe negative consequences for CORSIA’s environmental integrity, as well as not allowing compliance with paragraph 21 of Resolution A39-3 adopted at the last ICAO Assembly that gave birth to the global scheme. The paragraph says emissions units generated from UNFCCC mechanisms are eligible for use in CORSIA providing they avoid double counting and are of an eligible vintage and timeframe.

Most European States would support acceptance of UNFCCC credits issued from projects initiated after 31 December 2020 as being deemed CORSIA-eligible, but only for the pilot phase (2021-23) and if issued by countries who have committed to set up a robust system to avoid double counting. A smaller number of other European States say they would accept an earlier date, with one suggesting from 1 January 2017 and so consistent with Resolution A39-3 adopted towards the end of 2016. Another country suggested the application of a progressive vintage in order to manage supply and demand.

China, on the other hand, believes ICAO has no legitimate mandate or expertise to certify the emissions units of states and regions. While accepting the proposed EUC are an important guide to certification of eligible units for use by CORSIA, it contends they have no mandatory binding force. European States though are insistent the EUC must be legally binding in full, and uniformly and consistently applied across all States. They argue this is to ensure a global level playing field to avoid creating market distortions, provide certainty to airlines and also to avoid infringing the ICAO principle of non-discrimination on the basis of nationality. This view is supported by some other non-European States.

The United States is clear that it supports the draft text on the EUC in its entirety and says it opposes any revision to the wording. The criteria are based on global best practice and effectively balance the objectives of environmental integrity, administrative simplicity and cost-effectiveness, it says. Other countries, including China, want to see some minor changes to the design elements of eligible offset credit programs, which has a problem with wording on matters such as “social safeguards”, which it regards as a vague concept and inoperable in practice. Others point out, for example, that many programs such as the CDM do not have the provisions to address “do no net harm” as specified under Criterion 8.

The Council Session is also to consider the formation of the Technical Advisory Body and advice on procedural rules that were agreed at the recent CAEP/11 meeting (see article). The Session will review nominated candidates and is expected to approve the TAB membership, which will be based on a balanced geographical representation.

“We are determined to have the EUC approved by the Council at this Session,” a European representative on the Council told GreenAir. “The criteria have been successfully tested by the Program Testing Group of CAEP and have been proved fit for purpose. Now is the time to send a signal to operators and markets that ICAO is moving ahead.

“The EUC are a key piece of the whole CORSIA scheme, and they are essential to its environmental credibility. The TAB should also be instituted without delay. Consultations are ongoing on both issues among Council members.

“The current Session is the most appropriate as during the next, in June, we will be burdened by preparations for our 40th Assembly this autumn.”

Earlier this week, EU foreign ministers called on ICAO to “swiftly implement an effective CORSIA, while ensuring its environmental integrity, and agree on a long term goal at its next Assembly.”

Dutch finance ministry argues for EU-wide single aviation tax to cover the sector’s environmental costs

Thu 21 Feb 2019 – The Dutch finance ministry has released a paper suggesting the EU should adopt a Europe-wide aviation tax in response growing emissions from the sector. Such a coordinated approach could prevent a shift in air passengers to neighbouring countries, avoid the accumulation of regulations and administrative burdens for airlines, and counter the fragmentation and disruption of the internal market. The government says it will hold an international conference in June with EU States to discuss carbon pricing and aviation, and find ways on how States can work together. The ministry, which says it wants to “green taxes”, has proposed re-introducing a national passenger tax by 2021 and carried out a consultation last year. Meanwhile, UK regional airline flybmi has ceased operations and entered administration, citing recent spikes in fuel and carbon costs among its problems.

The Dutch government introduced a passenger tax in 2008 and although it netted a reported €380 million ($430m) in revenue, it led to an 8% fall in traffic at Amsterdam Schiphol that was blamed on passengers choosing to fly from Brussels or German airports instead. Airline representatives lobbied the government and the tax was dropped a year later. Trade association Airlines for Europe (A4E) claimed the removal of the tax led to a strong growth in passengers, which was similarly repeated when the Irish government scrapped its passenger tax in 2014 and subsequently led to an 8% increase in tourism.

A 2017 report by Pricewaterhouse Coopers (PwC) commissioned by A4E estimated European GDP would be boosted by a cumulative €215 billion ($240bn) over the following 12 years if all air passenger taxes were abolished in the European Economic Area (EEA). The study estimated total air passenger taxes in Europe would raise around €6 billion in 2017.

The Dutch paper, ‘Carbon pricing and aviation tax – Food for thought for the new European Commission’, says polluting emissions do not stop at the border. This especially applies when it comes to aviation, it says, since most flights, including in the EU, are international rather than domestic. “So we shouldn’t do it alone,” it states.

Globalisation had provided positive economic growth but the resultant greater demand for air transport had led to a sharp rise in aviation-generated carbon emissions, argues the paper. The price of flight tickets for transporting passengers and freight does not include the environmental costs, it maintains, and a fair price on tickets to include these externalities could bring about a decrease in emissions.

“If we are to take on this challenge effectively, we will need to work together to levy a tax on aviation,” it says. “The Netherlands is convinced that the EU should have a leading role in discussing and examining the possibilities for taxing aviation and should take action where possible.”

Carbon pricing on aviation at the EU level could be through the EU Emissions Trading System, a tax on kerosene, an air passenger tax or a tax per flight, but the finance ministry cautions that such a tax should not become an ‘own resource’ of the EU, namely revenue towards the EU budget.

A legal analysis for Brussels-based NGO Transport & Environment published earlier this month concluded that EU States could end an exemption on kerosene taxes for flights within Europe. This could be done at the EU level through a series of bilateral agreements or by agreement between individual countries, it says. The report adds there are misconceptions about taxing aviation fuel under the Chicago Convention and that it is intergovernmental air services agreements that prohibits such taxation.

A kerosene tax would incentivise airlines and manufacturers to reduce the sector’s environmental impact, says T&E, shifting environmental costs to users while still raising money to allow tax cuts for citizens or improve public services.

The Canadian federal government is also considering the introduction in 2019 of a carbon tax on domestic air travel. A study conducted by Toronto-based consultancy AirTrav for the National Airlines Council of Canada (NACC) estimated such a tax would add millions of dollars to the cost of air travel in the first year and almost C$850 million ($640m) a year by 2030. The study argues, however, the tax would not reduce carbon emissions in the medium term because of the aviation industry’s “technological and systems maturity” with respect to fuel consumption and emissions.

One of the unintended consequences of a carbon tax is that it would penalise residents of small and remote communities that depend on air travel, it says. Most flights in and out of these communities use aircraft that are older, less fuel-efficient and smaller, making the per-passenger cost of the tax higher. A tax would also dampen domestic tourism and encourage Canadians to travel outside the country, another unintended consequence, it adds.

A carbon offset system similar to the ICAO CORSIA scheme would be better suited to the industry and would result in measurable emission reductions, argues NACC. It estimates the cost of a carbon tax on domestic air travel would be approximately 10 times that of a CORSIA-like offset carbon pricing system. The reason why the government prefers a carbon tax over an offset system is the soaring federal windfall that would result from the former, it suggests.

Carbon taxation is becoming a serious issue for the European aviation industry, Tim Jeans, a former managing director of Monarch Airlines – which failed in 2017 – and now Chairman of Newquay Cornwall Airport in the UK, told the BBC.

“Carbon costs are a creeping cost for all airlines,” he said. “The fees you need to pay to carry out your flying are going up all the time, and they are now quite a material cost.”

The price of EU Emission Allowances used in the EU Emissions Trading System has more than doubled from a year ago, when it was around €9, and is now over €20. Many airlines have not fully budgeted for this rise, thinks Jeans, including flybmi.

Trade association Airlines UK also blamed the UK’s “sky high” rates of Air Passenger Duty for the collapse of flybmi.

“Rates of APD are the highest in the world, making it harder for airlines to grow and sustain routes as they battle high fixed costs and wider economic uncertainty,” said the association’s Chief Executive, Tim Aldserslade. “The demise of flybmi highlights the myriad challenges faced by airlines today trying to keep revenues ahead of costs and should act as a wake-up call for Government, which must prioritise a cut to this damaging tax.”

Turbulence ahead for supersonic passenger aircraft, predicts ICCT, as ICAO declines to establish new international noise standard

Thu 21 Feb 2019 – In the light of high-profile projects in the United States to develop new supersonic passenger aircraft, there was an expectation ICAO’s Committee on Aviation Environmental Protection (CAEP) could agree to start work on establishing a specific international supersonic landing and take-off (LTO) noise standard at its triennial meeting (CAEP/11) that concluded last week. CAEP “considered the progress” of supersonic transport (SST) operations but decided instead to undertake an exploratory study during its next three-year work cycle. Dan Rutherford of the US-based International Council on Clean Transportation (ICCT) believes this is a blow in particular to the ambitions of Boom’s 55-seat Mach 2.2 airliner. Two other supersonic business aviation projects, Aerion and Spike, have said they intend complying with today’s ICAO LTO noise standard applying to subsonic aircraft.

Despite an existing regulation that prohibits civilian flights in excess of Mach 1 over land and to a distance offshore where a sonic boom may be heard on land, the United States government is supporting the development of viable civil supersonic aircraft. According to a Supersonic Flight Fact Sheet published last October, the FAA is initiating two rulemaking activities that propose rules for noise certification of supersonic aircraft and to streamline and clarify the procedures to obtain special flight authorisation for conducting flight testing in the United States.

The agency said it anticipates issuing the proposed rules in 2019 and opening them for public review and comment. However, it added, the rulemaking would not rescind the Mach 1 prohibition, although it also stated there is a procedure that allows supersonic operation under certain conditions granted on an individual basis. “The FAA is working within the existing statutory and regulatory authority to consider the range of permissible supersonic operations,” it said.

As it expects any new supersonic aircraft to operate internationally, the FAA said it is collaborating with other national aviation authorities and working within CAEP “to develop international noise and emissions standards appropriate for future supersonic aircraft and the engines that power them.”

ICCT’s Rutherford said the CAEP meeting had decided not to set weaker international environmental rules for supersonic aircraft. “It’s now up to the United States to figure out how to set a domestic LTO noise standard for SSTs on its own, as required under the 2018 FAA Reauthorization Act,” he said in a blog posted on the ICCT website.

However, he said, it was doubtful that demand for US domestic flights alone will be enough to finance the re-introduction of SSTs that don’t comply with ICAO’s Chapter 14 international noise standard. “Due to a ban on supersonic operations of civil aircraft over land in most parts of the world, the vast majority of flights for the foreseeable future will be overwater and therefore international,” he added.

Boom’s goal, said Rutherford, was 2,000 SSTs operating 5,000 flights linking 500 airport pairs by 2035. However, ICCT had assessed only 650 of those flights would be domestic, with 590 of them within the US but subject to the current overland speed ban. “So the market for a commercial supersonic that cannot operate internationally, nor fly overland, might be in the order of several aircraft, not 2,000,” he argued.

Rutherford suggests Boom has two possible approaches: convince an engine manufacturer to develop a new, more expensive, advanced clean-sheet engine with lower noise or significantly reduce the design speed of its aircraft and so reduce its LTO noise footprint. Aerion has already made the latter choice but this would require a change to Boom’s business model, he believes.

“Either tactic will make Boom’s goal of providing fast, cheap supersonic service to the masses that much harder to achieve,” he predicted.

The Boom website says the US supersonic overland ban should be reversed and replaced with a “commonsense” noise standard that promoted “efficient, affordable supersonic flight while disallowing nuisance.” In the meantime, it continues, the company would focus on routes, estimated at around 500, that were primarily over water, such as New York to London or San Francisco to Tokyo, and flying subsonically when over land. Boom claims that because noise limits are based on aircraft weight, its smaller-size aircraft relative to the current fleet of long-haul commercial airplanes will be quieter on take-off than many planes flying today.

Eli Dourado, Head of Global Policy & Communications at Boom, told GreenAir: “CAEP standards have always been based on high-quality data and analysis that takes into account several factors, including economic reasonableness, technical feasibility and environmental benefit. Boom is pleased with the outcome of the CAEP meeting, and we look forward to supporting the study in any way we can.”

Earlier this month, Boeing announced it would be making a significant investment in Aerion, which is developing a 12-passenger, Mach 1.4 business jet slated for first flight in 2023. The AS2 will have the ability to fly up to 70% faster than today’s business jets, says the company, saving around three hours on a transatlantic flight “while meeting environmental performance requirements.” It unveiled the AS2’s GE Affinity engine design last year.

Boeing will provide engineering, manufacturing and flight test resources to the project. “This is a strategic and disciplined leading-edge investment in further maturing supersonic technology,” commented Steve Nordlund, VP & GM of Boeing NeXt. “Through this partnership that combines Aerion’s supersonic expertise with Boeing’s global industrial scale and commercial aviation experience, we have the right team to build the future of sustainable supersonic flight.”

ICAO’s technical committee agrees increase in stringency level on particulates and CORSIA sustainable aviation fuel methodologies

Tue 19 Feb 2019 – ICAO’s Committee on Aviation Environmental Protection (CAEP) has agreed to increase the stringency level of a standard limiting emissions of non-volatile Particulate Matter (nvPM) from aircraft engines. The technical committee’s 11th (CAEP/11) triennial meeting just concluded also delivered new technology goals for the sector, covering aircraft noise, NOx emissions and fuel efficiency. Agreement was also reached on the means to calculate and claim the benefits accrued from the use of sustainable aviation fuels under the CORSIA carbon offsetting scheme and also recommendations on the body being formed to evaluate the eligibility of emissions units. Over the next three years, CAEP will assess how to certify hybrid and electric aircraft and will undertake an exploratory study on supersonic aircraft.

In advance of the new stringency rule, a standard on nvPM was passed by CAEP at its 10th meeting in 2016 and adopted by the ICAO Council in 2017. It applies to engines with a rated thrust greater than 26.7kN manufactured from 1 January 2020.

Engines burning hydrocarbon-based fuels emit gaseous and particulate matter emissions as by-products of combustion, and contribute to poor air quality in and around airports. At the engine exhaust, particulates mainly consist of ultrafine soot or black carbon emissions, called non-volatile PM. Compared to diesel engines, gas turbine engine nvPMs are typically smaller in size. ICAO says the standard is expected to drive technologies to address nvPM and in the long-run minimise their potential environmental and health impacts.

With this standard, ICAO reports it has now completed all main environmental standards for the certification of aircraft and engines, namely for noise, local air quality (NOx, HC, CO, nvPM) and climate (CO2), making aviation the only sector with environmental mandatory certification requirements at the global level for the operation of its equipment. Once applicable, ICAO says all new aircraft will need to be certified to the standards before operating.

The CAEP meeting in Montreal – attended by around 250 international experts – also agreed new technology goals for new aircraft entering production, including performance improvements in aircraft noise up to 15.5 dB below Chapter 14 limits for single-aisle aircraft by 2027 and NOx emissions by 54% relative to the latest ICAO NOx SARPs, along with fuel efficiency gains of up to 1.3% per annum.

Updated ICAO environmental trends for noise, local air quality (NOx and nvPM) and global climate (CO2) were agreed by CAEP and will form the basis for the consideration of ICAO environmental policies at the next 40th Assembly this coming September.

The agreement on the means to calculate and claim benefits accrued from the use of sustainable aviation fuel under CORSIA is significant in reducing airlines’ offsetting requirements, says ICAO. It includes the default values and methodologies for calculating actual values needed to calculate the life-cycle CO2 emissions reduction benefits of different feedstocks. CAEP has also agreed on the requirements for Sustainability Certification Schemes (SCS) and a process to evaluate and recommend a list of eligible SCS, which will certify fuels against the CORSIA sustainability criteria.

“This package of agreements provides the clarity needed for the energy sector to embark on the production of sustainable fuels for aviation, and is an important step towards CORSIA implementation,” said an ICAO statement.

CAEP has also recommended the rules and procedures for the Technical Advisory Body (TAB), which is in the process of being set up by the ICAO Council to evaluate the eligibility of emissions units for use in CORSIA. The Committee also agreed the technical updates of the Environmental Technical Manual on CORSIA, which clarifies the recommended actions by States and airlines for the monitoring, reporting and verification of CO2 emissions.

Other agreed outcomes from the two-week meeting include:

Publications developed as part of ICAO’s ‘eco-airport toolkit collection’, which cover renewable energy, waste management, environmental management and airport building eco-design.
A synthesis report was approved for publication that provides important information on climate risk impacts and resilience options for the sector.
Reports on the state of aircraft end-of-life and recycling, and performance-based navigation and community engagement were also agreed for publication.
Agreement on the results of an assessment on the positive effects of operational improvements, which showed fuel savings of between 167-307 kg per flight can be achieved by 2025.
The publication of a white paper called ‘State of the Science 2019: Aviation Noise Impacts Workshop’.

All technical recommendations that have been agreed by CAEP will now be considered by the governing ICAO Council.

“In the 35 years since CAEP was established, the scope of work and the technical areas which it covers have widened. Yet, despite the monumental challenges before it, CAEP remains a tremendous example of international cooperation,” commented Council President Dr Olumuyiwa Benard Aliu.

In the absence of a zero-carbon plane, long-term growth in aviation demand cannot continue unchecked, says UK’s climate adviser

Mon 18 Feb 2019 – The largest contribution to reducing long-term aviation emissions will come from new technologies and aircraft designs, but in the absence of a true zero-carbon plane, steps will be required to limit growth in demand, says the UK government’s advisory Committee on Climate Change (CCC). In a letter to the Secretary of State for Transport, the Committee’s Chairman, Lord Deben, said UK aviation emissions have more than doubled since 1990, while emissions for the economy as a whole have fallen by around 40%. The government has agreed with the CCC’s planning assumption that emissions should be around their 2005 level – 37.5 MtCO2e – by 2050, but the letter urges that this should be met on the basis of actual emissions and not by relying on international offset credits. Speaking at the RAeS Greener by Design conference in November, a CCC official said the target will have to be revisited in the light of the Paris Agreement.

The CCC letter is an initial response to the ‘Aviation 2050 Strategy’ green paper and consultation recently announced by the UK government (see article). The current 2050 target is to reduce economy-wide GHG emissions by at least 80% from 1990 levels and the government has set in place legally binding carbon budgets to achieve the goal. The Committee has been tasked with providing advice on the implications of the higher ambition of the Paris Agreement, including when net-zero emissions can be achieved.

“A stronger UK target would require more effort from all sectors, including aviation,” said the letter. “We intend to provide an updated view on the appropriate long-term ambition for aviation emissions within our advice on the UK’s long-term targets.”

Deben said a report would be published in the spring, which would be followed by a setting out of implications for the government’s final aviation strategy white paper due to be published in the summer.

The CCC said achieving the present aviation emissions target for 2050 would require contributions from all parts of the aviation sector, including from new technologies and aircraft designs, improved airspace management and airline operations, and use of sustainable fuels. The white paper should set out a clear strategy to ensure technology solutions “are developed and brought to market in a timely fashion,” it recommends.

The Committee remains cautious about the prospect for aviation biofuels and is holding to its 2009 forecast of up to 10% biofuel use in 2050, given what it sees as uncertainty about sustainable biomass supply and cost-effectiveness. It says production will likely need to be in conjunction with carbon capture and storage (CCS) to be competitive with competing uses for biomass in, for example, electricity generation or hydrogen production.

It advises the government not to plan for high levels of aviation biofuel use, therefore, but does recommend in the period to 2030 that government policy should aim to develop a market for such fuels produced in “genuinely CCS-ready facilities” through the national 2030 Renewable Transport Fuel Obligation programme.

The Committee’s letter also welcomes the UK commitment expressed in the green paper to negotiate in ICAO a long-term goal for international aviation emissions that is consistent with the Paris Agreement, noting the CORSIA scheme’s end date of 2035 and the agreement last year by the global shipping sector to reduce its GHG emissions by at least 50% below 2008 levels by 2050. “A new long-term objective would provide a strong and early signal to incentivise the investment in new, cleaner technologies that will be required for the sector to play its role in meeting long-term targets,” it added.

The UK’s overall 2050 target to reduce emissions by 80% compared with 1990 includes emissions from international aviation, which have not so far been included in the carbon budgets. With a lower goal for aviation, this implies for the rest of the economy, emissions will actually have to fall by 85% to meet the 2050 target.

“So aviation in some sense is in a privileged position,” Adrian Gault, the Committee’s Chief Economist, told the Royal Aeronautical Society’s Greener by Design conference in November.

“The 80% reduction target was based on a UK contribution to keep the global temperature rise to around 2 degrees C, but the Paris Agreement calls for well below 2 degrees and to pursue efforts to limit it to 1.5 degrees.

“We will therefore be revisiting the 80% target and whether it is strong enough. This will include us looking again at the planning assumption for aviation, which allows for a 60% growth in passenger demand. The overall implication is that targets will only get tighter in the light of Paris.”

The CCC commissioned a report from aviation experts looking at plausible scenarios for technology improvements in new aircraft entering the fleet, how quickly they can be introduced and at what cost. This analysis will be included in the spring report to the government. The Committee will also review the implications of the CORSIA carbon offsetting scheme for international aviation and the effect of other GHGs on global warming, said Gault.

Commission prepares for no-deal Brexit with list of reassigned airlines administered by the UK under EU ETS

Fri 15 Feb 2019 – In the event of a no-deal Brexit, the European Commission has issued a revised list of aircraft operators covered under the EU Emissions Trading System (EU ETS) that shows the new EU competent authority of those operators currently administered by the UK. The list is contained in a new regulation published in the Official Journal earlier this week but only enters into force if the UK leaves the European Union on March 29 without a withdrawal agreement. The UK administers the largest number of operators compared with other EU States. The UK has brought forward the deadlines for operators to report their 2018 emissions to March 11, who must also surrender allowances by March 15. Meanwhile, ICAO has released a preliminary incomplete list of operators and the State to which they are attributed under the global CORSIA carbon scheme.

According to the UK government, it administers around 140 aircraft operators under the EU ETS. The list published by the Commission shows Germany taking on a fair proportion of the additional burden although flag carrier British Airways has been assigned to Italy and leading low-cost carrier easyJet to Spain. Leisure airlines Thomas Cook and TUI would also be administered by Spain under the no-deal Brexit scenario. The regulation says changes to the list of aircraft operators have been based on the latest data provided by Eurocontrol.

Unless an extension is agreed, the UK formally leaves the European Union at midnight (CET) on March 29, so becoming a third country. In a notice to stakeholders published on December 19, the Commission said that subject to an agreed transition period agreed in the draft withdrawal agreement, EU rules governing the EU ETS will no longer apply to the UK. The derogation in place regarding the temporary exclusion of flights between airports in the European Economic Area (EEA) and those outside would then also apply to flights from the UK to the EU and vice versa.

The notice also said, as of the withdrawal date, aircraft operators administered by the UK will not be able to access their accounts in the EU ETS Union Registry. The UK’s EU ETS administering body, the Environment Agency (EA), has advised operators to take “appropriate action” if they wish to retain access to their allowances in a no-deal scenario, which could include moving these to an existing registry account in another EEA State’s registry.

The Commission’s notice also said that as of 1 January 2019, the UK will not be able to auction allowances, allocate allowances for free to aircraft operators or exchange of international credits. This is a contingency in case of a no-deal outcome but the suspension would be lifted in the event of a withdrawal agreement and after the necessary ratification instruments had been deposited.

In the event of a no-deal, operators should therefore prepare for the possibility of having to meet their 2018 obligations without the use of their 2019 free allocation, advises the EA. It also warns that despite there being less than five days between having to report their 2018 emissions and surrendering the required allowances, operators will be liable to the mandatory civil penalty equivalent to €100 (S113) for each allowance that they fail to surrender. Operators reporting to other EU States have until 30 March 2019 to report their 2018 emissions and 30 April 2019 to surrender allowances.

For the 2019 compliance year, which started in January, there would likely be no role for the UK authorities under a no-deal scenario and reassigned operators would report all 2019 emissions to their new EU administering State.

However, the government says it intends to maintain monitoring, reporting and verification (MRV) arrangements “to ensure continuing transparency over greenhouse gas emissions.”

It adds: “UK operators of stationary installation will continue to report on their emissions. Aircraft operators who will be registered in the UK after exit day will continue to report their emissions on the same flights as required on exit day. There is no immediate action for aircraft operators who will be registered outside the UK after exit day, even if they are currently administered by the UK, as the UK government will not initially place MRV requirements on these operators in a no-deal scenario.”

The UK is considering a number of options post-Brexit, which include a carbon tax, staying in the EU ETS until the end of the current trading period (Phase 3) in 2020 if a withdrawal agreement with a transition period is reached and/or coming up with its own national greenhouse gas trading system that would be aligned with the EU ETS. A similar linking arrangement has been negotiated between the EU and Switzerland.

In the event of no deal being reached, the government said last October it would introduce a Carbon Emissions Tax of £16 ($20) for fixed installations that would be applied to each tonne of CO2 emitted over and above an installation’s emissions allowance, which would be based on its free allowance allocation under the EU ETS. The aviation sector will not be subject to the tax, although operators will still be obliged to comply with GHG MRV requirements.

“The government is continuing to develop options for long-term carbon pricing,” it says. “We will consult on our future approach in due course.”

Meanwhile, ICAO’s preliminary list of CORSIA aeroplane operators – unlike the EU ETS, CORSIA does not cover helicopter flights, only fixed-wing civilian aircraft, hence the term “aeroplane” – is based on information reported by 50 States by 30 November 2018, and is dated 21 December. The list contains over 230 airlines and business aircraft operators. The first edition of the document is expected to be published by the end of May.

China Airlines and Virgin Atlantic top-scoring carriers in latest CDP corporate climate list

Tue 12 Feb 2019 – Taiwan-based China Airlines and Virgin Atlantic Airways both scored a creditable A- score in CDP’s Climate List for 2018, which rates the environmental performances of corporations worldwide. Tourism group TUI, which also includes five airlines, also scored A-. Formerly known as the Carbon Disclosure Project, CDP analysed over 6,800 responses from the world’s largest companies against a wide range of metrics that include transparency, target-setting and awareness of risks and opportunities. Other organisations scoring A- were Boeing and United Technologies, along with Munich Airport. Last year, International Airlines Group (IAG) became the first to achieve the coveted top climate leadership A ranking. Only 136 companies made the A List 2018, one of which was Finnish renewable jet fuel producer Neste.

The number of organisations reporting their environmental data to CDP has risen by 55% since 2013, which the non-profit global disclosure platform says highlights the increase in corporate transparency and measurement of environmental action. It works, adds CDP, with institutional investors with assets of $87 trillion to leverage investor and buyer power to motivate companies to disclose and manage their environmental impacts.

“As the recent report from IPCC showed, the next decade is crucial in our shift to a sustainable economy, and we believe corporates are at the heart of this transition. By ranking companies, we aim not just to highlight leaders’ best practice, but to inspire all businesses to aim higher and take more action,” said Dexter Galvin, Global Director of Corporates and Supply Chains at CDP.

“That the STOXX Global Climate Change Leaders Index – which is based on the CDP A List – outperformed the STOXX Global 1800 by 5.4% per annum from December 2011 to July 2018, demonstrates that the leadership on environmental issues shown by the A List goes hand in hand with being a successful and profitable business.”

One of the few organisations from the aviation sector to improve their score in 2018 was UK air navigation services provider NATS, rising from a C to a B grade (CDP ranks companies from A to D-). NATS started its environment programme in 2006 that was designed to reduce not just the environmental impact of air travel through the use of more direct routes and continuous descents, but also its own estate by encouraging recycling and energy saving measures. Since the programme began, NATS reports it has enabled savings of over 1.7 million tonnes of aircraft CO2 and reduced energy consumption on its estate by over 30%.

“At NATS we are very aware of how our business impacts the environment both in the sky and on the ground, so we’re really pleased to have been scored highly by CDP,” said NATS’ Head of Environmental Affairs, Ian Jopson. “NATS is always looking for ways to reduce our carbon footprint across our sites and operation, whilst also balancing other challenges such as managing the impact of noise on communities.”

CDP also runs the Supply Chain programme, now in its tenth year, which has 115 members worldwide representing $3.3 trillion in procurement spend. In 2018, these members made disclosure requests to 11,692 of their suppliers, asking them to provide details about relevant impacts related to climate change, deforestation and water. Over 5,600 companies based in 90 countries responded. Last year, 43% of the members confirmed that they currently deselect existing suppliers based on their environmental performance, and a further 30% are considering implementing this in the near future.

No organisation from the aviation sector is a Supply Chain programme member but aero-engine manufacturer Rolls-Royce achieved an A grade in CDP’s Supplier Engagement Rating, which evaluates responding companies on their supplier engagement performance covering governance, targets, scope 3 emissions and value chain engagement. In addition, each company’s CDP climate change score was factored into their rating as an overall assessment of company performance on climate change.

Virgin Atlantic is also part of the CDP Supply Chain programme. The airline says its own supply chain programme focuses on improving the people, environment and animal welfare credentials of the products and services it designs, contracts and buys.

China Airlines is also listed in the Dow Jones Sustainability Emerging Markets Index, which comprises the top 10% of the largest 800 companies in 20 emerging markets based on long-term economic, environmental and social criteria. In 2017, it was ranked top in the sector for its environmental policy and management/reporting.

SAS, Finnair and China Airlines launch passenger carbon offsetting initiatives

Fri 8 Feb 2019 – Three airlines – SAS, Finnair and China Airlines – have each introduced carbon offsetting initiatives for their customers. Starting this month, SAS Group will offset the carbon emissions of all tickets booked through its EuroBonus loyalty programme, which has 5.6 million members. The airline estimates that around 40% of passenger-related carbon emissions will be offset as a result and says it will be introducing this year the opportunity for customers to reduce their carbon footprint through choosing a biofuel upgrade option when purchasing tickets. Last month, Finnair introduced a service for customers to offset or reduce the CO2 of their flights by supporting an emissions reduction project or through buying biofuel. Taiwan-based China Airlines has partnered with ClimateCare to offer a carbon calculator on its booking website and enable customers to offset their carbon footprint.

Since April 2018, SAS has compensated CO2 emissions for customers booking youth tickets, which are available to travellers aged between 12 and 26. The airline estimated around SEK 15 million ($1.7m) would be raised as a result for renewable energy projects supported by its offset partner Natural Capital Partners. It already offsets business travel within the company.

“Our most loyal customers and frequent flyers share our wish for more sustainable travel,” said SAS CEO Rickard Gustafson. “Our customers who fly to, from and within Scandinavia should be aware that SAS strives to reduce our carbon footprint on a daily basis.”

SAS has set a target of reducing its CO2 emissions by 25% by the year 2030 compared with 2005, after when it intends to use biofuel corresponding to total fuel consumption for all SAS domestic flights within Scandinavia, or around 17% of total fuel consumption. Last year it signed a letter of intent with Preem, Sweden’s largest fuel company, to produce renewable aviation fuels using forestry residues and other waste materials (see article). The airline is expecting Preem to supply 10-12% of its total fuel demand by 2023.

The latest Sustainability Report just published by SAS Group shows carbon emissions fell from 4,376,000 tonnes in the financial year 2017 to 4,313,000 in 2018, a decrease of 1.4%. This was partly due to a 0.2% fall in total tonne kilometres flown but also as a result of relative passenger-related CO2 emissions decreasing from 96 grams per pax/km to 95. Relative cargo-related CO2 emissions, however, increased during the period to 521 grams per cargo tonne kilometre from 518 the previous year.

The airline reports the nine new Airbus A320neo aircraft and other brand-new wet-lease aircraft introduced into the fleet contributed to the emissions reduction. It has 30 A320neos on order and last year it ordered another 50, with the intention of having a fuel-efficient, single-type narrowbody fleet by 2023. SAS is expecting to also add new Airbus A350 long-haul aircraft this year. It reports that it used 100 tonnes of renewable jet fuel on flights from Stockholm last year.

The airline has set itself the goal of 50% lower CO2 absolute – as opposed to the net target set by the industry – emissions by 2050 compared with 2005.

Finnair’s ‘Push for Change’ programme offers passengers the opportunity to support a cookstove project in Mozambique by donating €1 ($1.13) for a round-trip within Finland, €2 for a round-trip in Europe or €6 for a return intercontinental trip. The charge is based on the average emissions and the costs of reducing one tonne of CO2 within the project. Payments in full will go to the Nordic Environment Finance Corporation, an institution established by the Nordic governments to finance sustainable green growth and climate projects.

Customers can also choose to support the use of biofuels in Finnair flights through contributing 10, 20 or 65 euros for return flights within Finland, within Europe or intercontinental respectively. Finnair says the price is based on a scenario where the aviation fuel used contains a 15% biofuel component and all passengers on the flight have chosen to support the use of biofuel. The airline is partnering with sustainable aviation fuel supplier SkyNRG and the fuel will be produced in California from used cooking oil.

The programme follows a consumer research study conducted last year by Finnair that showed the majority of those questioned were ready to pay to reduce the emissions caused by air travel if the proceeds went directly to environmental causes and supported sustainability (see article). The use of biofuels and carbon sinks were favoured by respondents as the best ways to reduce the environmental impacts of flying.

“We want to offer the best solutions for responsible air travellers,” said Finnair CEO Topi Manner. “Aviation has several positive economic and social impacts, and it is important that we work hard to build more responsible air travel. Many important products we use in our daily life are transported by air cargo, air connections enable international trade and maintain relations, and the travel industry is a key source of income and employment for many countries.”

China Airlines’ Eco Travel programme allows passengers to use a calculator powered by Carbon Analytics to work out the carbon emissions from their flights and the cost to offset them through ClimateCare. The current price to offset one tonne of CO2 is set at $10.35, according to the calculator. A return flight between Taipei and Helsinki in Finland is calculated as costing $12.49. ClimateCare supports a range of cookstove, hydro and reforestation and water purification projects across the developing world.

In 2015, the airline became the first carrier in Taiwan to calculate the carbon footprint for each passenger and tonne of freight using actual operational results and parameters in accordance with ICAO and IATA guidelines. China Airlines is also the first in Taiwan to use sustainable aviation fuels since deliveries of new Airbus A350 aircraft were powered by blended SAF on ferry flights from Toulouse.