Isra-Mart srl: ETS regulation for airlines

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The EU has decided to include aviation in the European Emissions Trading Scheme (EU ETS). From 2012, operators will have to surrender one allowance per tonne of CO2 emitted on a flight to and from (and within) the EU. This covers passenger, cargo and non-commercial flights and applies no matter where an operator is based - non-EU carriers will also need to comply with the scheme. Non-complying operators face a penalty of €100 per missing allowance on top of the obligation to procure and surrender missing allowances. They may even be banned from operating in the EU.

The compliance period for aviation will start in 2012. The benchmark for free allowances will use transport data from 2010. By then, operators need to have reliable systems to generate this data; the related monitoring plans will have to be submitted in by 31 August 2009 latest. This baseline data will determine the number of free allowances for 9 years (2012-2020), making it worth up to several billion Euro for some airlines. Emissions will also need to be reported by 2010, two years before trading starts. Monitoring plans for emissions data have to be submitted to the authorities in advance, also by 31 August 2009. Both the 2010 transport data and emission reports must be verified by an accredited independent verifier. Verifiers are being selected already now to ensure the aircraft operator is able to meet the requirements. Verification usually starts four to five months before the deadline to submit emission reports, i.e. March 31 each year starting from 2011.

It has appeared aircraft operators need clarification on many issues. PwC is working for and with the EU Member States to develop guidance for completing Monitoring Plans which also explains the Monitoring and Reporting Guidelines. The European Commission issued templates for such plans which Member States will have to use. Both documents can be found through your Competent