The EEA EFTA States (Iceland, Liechtenstein and Norway) have been part of the EU ETS since October 2007, when the EU ETS Directive (2003/87/EC) was incorporated into the EEA Agreement.
With the Aviation Directive (2008/101/EC) aviation activities were included in the EU ETS from 1 January 2012. The EU and the EEA EFTA States consider the Aviation Directive EEA relevant and will therefore incorporate it into the EEA Agreement. It will consequently become legally binding for the EEA EFTA States.
EEA additional flights
The extension of the scheme entails that in addition to the 27 EU Member States the EEA EFTA States will henceforward also be covered by the EU ETS. As a result, flights which depart from or arrive in an aerodrome situated in the territory of an EEA EFTA State, collectively called ‘EEA additional flights’, will be subject to EU ETS rules. EEA additional flights are:
- Domestic flights within the EEA EFTA States
- Flights between the EEA EFTA States
- Flights between the EEA EFTA States and third countries outside the EEA
The list of exemptions from the scope of the EU ETS in Annex I of the Aviation Directive also applies for the EEA additional flights.
Aircraft operators which are already covered by the EU ETS will only be affected by the extension of the system if they perform EEA additional flighs, cf. above. These operators will from now on have to include their EEA additional flights into their monitoring and reporting activities. They will thus have to start monitoring annual emissions and tonne-kilometre data related to EEA additional flights from 1 January 2010.
These operators have assumably already submitted their monitoring plans. Due to the extension of the EU ETS, they now have to update their monitoring plans to cover their EEA additional flights. Operators which update their monitoring plans shall notify their competent authority without delay of any changes made. In case of substantial changes to the monitoring methodology, the operators need to submit their plans anew for approval. Substantial changes include:
- Change of the average reported annual emissions which causes the operator to exceed the threshold for applying tier 1 for determination of fuel consumption
- Change in the number of flights or in the total annual emissions which cause the aircraft operator to exceed the threshold for small emitters, so that the operator is no longer eligible for simplified monitoring procedures
- Substantial changes to the type of fuels used
Aircraft operators which are not covered by the EU ETS yet but perform EEA additional flights will be covered by the scope of the scheme as a result of the extension to the EEA EFTA States. These operators have to submit monitoring plans for annual emissions and tonne-kilometre data as soon as possible. The monitoring plans shall be submitted to a competent authority in the state which will become the administering state of the relevant operator, i.e. the EEA EFTA State which granted the operating licence. The operators will have to start monitoring annual emissions and tonne-kilometre data from 1 January 2010.
If a commercial aircraft operator is exempted from the scope on grounds of point (j) of Annex I, i.e. because it operates either fewer than 243 flights per period for three consecutive four-month periods or flights with total annual emissions lower than 10 000 tonnes per year (de minimis rule), the exemption could cease to apply if EEA additional flights cause the aircraft operator to exceed the aforementioned limits. In such case, the aircraft operator has to submit monitoring plans as soon as possible to a competent authority in the administering state, i.e. the state that granted the operating licence or, in case of operator from a third-country, the state with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator in the base year. The aircraft operator shall start monitoring annual emissions and tonne-kilometre data from 1 January 2010.
All references to Member States on the monitoring plans and reporting templates provided by the European Commission should be interpreted as including all 30 EEA States.
Before 1st February each year the Commission will update the list of aircraft operators, to include the new entrants that started performing aviation activities in the previous year. The latest list of aircraft operators can be found at the European commission’s webpage.
Information for aircraft operators
Further information can be found on the Commission´s website.
Moreover, inquiries can be sent to the Environment Agency of Iceland (email@example.com).
Emission reporting is an important part of the ETS. It is important that reporting is thorough and standardized, in particular to help achieve the Emissions Trading Directive’s intention of a trading scheme that is fair and effective throughout the EU. The reports have to be verified by an independent accredited verifier
Rules for monitoring and reportingThe Environment Agency of Iceland´s own templates, based on the European Commission’s are now available to operators from this website below.
- Tonne-kilometre monitoring plan
- Annual emissions monitoring plan
- Tonne-kilometre report
- Annual emissions report
Please note that besides returning an annual emissions monitoring plan and annual emission report all aircraft operator must open an aircraft operator holding account in the Union Registry in order to comply with EU ETS. The account allows aircraft operators to surrender allowances in accordance to their emissions, buy and sell allowances and receive free allowances if applicable. Information’s on how to open an account can be found under the registry tab.
According to Decision 2009/339/EC “aircraft operators operating fewer than 243 flights per period for three consecutive four-month periods and aircraft operators operating flights with total annual emissions lower than 10 000 tonnes CO2 per year shall be considered small emitters.
The small emitters tool can be found here.
The Dutch Emissions Authority, in cooperation with the Environment Agency of the United Kingdom, has produced a practical interpretation of the Commission’s Monitoring and Reporting Guidelines, to assist operators in completing their monitoring plans. The document can be used by operators as a guide to complete monitoring and reporting plans subject to submission to the Environment Agency of Iceland.
Whilst this guidance can be read as a stand alone document, it is not legally binding and you should make sure you have a good understanding of the relevant legal documents:
In addition, the Environment Agency of the United Kingdom has produced completed examples of emissions monitoring plans for small and large aviation operators. These give an indication of our expected responses against each section of the plan. Please note that the documents are provided for illustration purposes only and do not represent the Commission’s approved monitoring templates:
31 December 2009 - Aircraft operators (AO) turned in tonn-km plans to the Environment Agency of Iceland (EIA).
15 June 2011 - Last day for aircraft operators administered by Iceland to turn in reports for year 2010.
30 June 2011 - Environment Agency of Iceland turned in tonne-km reports (applications) to the Commission.
20 July 2011 - The EEA-wide historical aviation emissions were established in an EEA Joint Committee Decision 93/2011. The EEA-Wide cap for aviation is now set to 221 420 279 tonnes of CO2. The figure represents the average of the annual emissions for the years 2004, 2005 and 2006 of all activities covered by the scope of the legislation.
26 September 2011 - Commission adopted a decision on the EEA-wide benchmark values which will be used to allocate greenhouse gas emission allowances to aircraft operators free of charge. One benchmark has been calculated for the trading period in 2012 an another for the trading period starting in January 2013. In 2013 to 2020 an airline will receive 0,6422 allowances per 1,000 t-km, while in 2012 it will receive 0,6797 allowances. More information.
30 November 2011 - Last day to turn in tonne-km monitoring plan for aircraft operators that intend to perform Croatian domestic and Croatia-non EEA aviation activities that could apply for free allowances. More information.
30 December 2011 - EIA will publish the allocation for each operator.
1 January 2012 - Start of the third monitoring period for annual emissions.
28 February 2012 - EIA will issue allowances for 2012 to those operators that successfully applied.
31 March 2013 - Final date for receipt of the 2012 Annual Emissions report.
30 April 2013 - Final data for surrender of allowances against reportable emissions.
The European Commission and Eurocontrol have published some informative and insightful frequently asked questions.
The European Commission’s FAQs can be found here.
Eurocontrol’s FAq’s can be found here.
The EEA Joint Committee has adopted in the EEA Agreement, Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in a view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions. The Regulation will in continuance be adopted in Icelandic law.
The European Commission and EU Member States and EEA countries have issued a notification where submission of the 2013 report that was supposed to be completed by 31 March, and the surrendering of allowances that was supposed to be completed by 30 April this year in aviation, will be postponed until 2015. This is because it is not possible to ensure that the outcome of the Commission's proposal amending Directive 2003/87/EC will be achieved in time.
As informed in December, the European Commission is currently in the process of negotiating a proposed amendement to the Emissions Trading System for Aviation (ETS).
The European Commission adopted yesterday a proposal for a Directive amending Directive 2003/87/EC. The proposal would amend the EU emissions trading system so that only the emissions from flights that take place in European regional airspace will be covered.
Allocation of free emissions allowances for later distribution to fast growing airlines and new entrants into the market
The Environment Agency of Iceland would like to remind all aircraft operators who qualify as new entrants and want to apply for allowances to send in their TKM monitoring plan before 31 August 2013.
On Monday 12 November 2012 it was announced that the European Commission had proposed that the EU would defer the requirement for airlines to surrender emissions allowances for flights in to and out of Europe/European Economic Area until after the 2013 International Civil Aviation Organization (ICAO) General Assembly next autumn.
From January 1st 2012 aviation activities in the European Economic Area (EEA) will be included in the EU Emission Trading System (EU ETS). From that date, the ETS will cover flights which depart from or arrive in an aerodrome situated in the EEA, i.e. in any of the 27 EU Member States and in Iceland, Norway and Liechtenstein. Aircraft operators falling under the scope of the ETS will then have to acquire emission allowances equivalent to their annual CO2 emissions.
Aviation will become a part of the EU’s emission trading system (EU ETS) as of 1. January 2012. Accordingly, the Commission has published the benchmark values for the aviation industry. The benchmark values will be used to allocate greenhouse gas emission allowances free of charge to more than 900 aircraft operators.
With the benchmark values aircraft operators now have certainty regarding how many allowances they will receive for free annually until 2020.
As of 1 of July 2013, Croatia is expected to become an EU Member State and consequently a member of the EU ETS from 1 January 2014. Aircraft operators, performing domestic flights within Croatia and /or flights between Croatia and non-EEA country in 2012 ("additional aviation activities") have a possibility to monitor their tonne-km data for these flights and to apply for additional free allowances by 31st March 2013.
The Environment Agency of Iceland collects the following adminstating fees in accordance with this tariff.
Review and approval of:
|Monitoring Plans- Small Emitters||262,200 ISK|
|Monitoring Plans- Large Emitters
|Revised Monitoring Plan - Small Emitters
|Revised Monitoring Plan - Large Emitters
|Update of a monitoring plan
|Annual emissions report - small emitters|| 199,800 ISK
|Annual emissions report - large emitters||262,200 ISK|
The price per hour for the services of an expert is ISK 9,500 and ISK 5,800 per hour for a secretary for tasks and services with which the Agency is entrusted by laws and regulations and for which a fee maybe collected.
Large and small emitters
Small emitters are for aircraft operators with either fewer than 243 flights per period for three consecutive four-month periods or flights with total annual emissions of CO2 lower than 10,000 tonnes per year. Other aircraft operators fall under the category of „large emitters“.
The final due date of fees pursuant to this tariff is 30 days after the issue of the invoice. Penalty interest is calculated from the due date if no payment has been made on the final due date. Costs resulting from the collection of fees may be charged if the fee has not been paid on the final due date.
Verification of aviation emission reports
Under Act No 65/2007 on the emission of greenhouse gases an aircraft operator covered by the EU Emissions Trading System (EU ETS) shall annually submit to the Environment Agency a verified report on emissions of carbon dioxide. The report for 2011 must be submitted by 31 March 2012.
Reports on emissions of carbon dioxide shall be verified by an independent verification body which has been accredited to carry out verification activities in the EU ETS.
As of today, no such verification body has been accredited in Iceland, but aviation operators may use foreign accredited verification bodies within The European Economic Area (EEA) provided that:
- The verifier has been accredited to carry out verification activities for aircraft operators in the EU ETS by an accreditation body that has successfully undergone peer evaluation organized by European Co-operation for Accreditation (EA).
- The working language of the verifier is English or any of the Nordic languages (other than Finnish).
- The verifier is independent of the aircraft operator.
The decision on accepting a foreign verification body is made by the Environment Agency which publishes a list on its website of all verifiers that have been accepted (see below). A verification body that wishes to work for aviation operators administered by Iceland shall send their accreditation certificate in English or any of the Nordic languages (other than Finnish) to the Environment Agency.
The Environment Agency can under certain conditions accept verification bodies even though the criteria stated above have not been met.
List of accredited verifiers which have been accepted by the Environment Agency to carry out verification activities for aircraft operators in the EU Emissions Trading System (EU ETS)
British Standards Institution trading as BSI
- Beech House
- Linford Wood
- Milton Keynes
- MK14 6ES
- Contact: Mr Andrew Launn
- Tel: +44 (0)845 080 9000
- Email: Andrew.Launn@bsigroup.com
- Website: www.bsigroup.com
- Umboðsaðili á Íslandi: BSI á Íslandi
- Skúlagötu 19
- 101 Reykjavík
- Tel: +354 414 4444
Complete Integrated Certification Services Ltd
- Queens Road
- ST4 7LQ
- Contact: Mr Tim Watts
- Tel: +44 (0)1782 411008
- Fax: +44 (0)1782 764363
- E-Mail: firstname.lastname@example.org
- Website: www.cicsglobal.com
Guido Harling at ETS Verification GmbH
- Guido Harling
- Altstadtparkplatz 3
- 49545 Tecklenburg
- Contact: Guido Harling
- Tel: +49 5482 5099 866
- E-Mail: Guido.Harling@ETSVerification.com
- Website: http://www.ETSVerification.com
TÜV Rheinland Energie und Umwelt GmbH
- Michael Pohlmann KG
- An Grauen Stein,
- 51105 Köln
- Contact: Mr. Michael Pohlmann
- Tel: +49 (0)2204 96 37 15
- Fax: +49 (0)2204 96 37 14
- E-Mail: email@example.com
- Website: http://www.emissiontra.de
VerifAvia (UK) Ltd
- Suite 13399, 2nd Floor
- 145-157 St John Street
- EC1V 4PY
- Contact: Mr Julien Dufour
- Tel: +33 665 697 489
- Fax: +33 183 621 618
- E-Mail: firstname.lastname@example.org
- Website: www.verifavia.com
- 25 Drury Street
- Dublin 2
- Contact: Mr. Colm O´Connor
- Tel: +353 (1) 6727074
- Fax: +353 (1) 6778025
- E-Mail: email@example.com
- Website: http://www.verifier.ie
Allocation of allowances
On the 9th of December 2011 the minister of Environment set out Regulation No. 1131/2011 on the allocation of allowances free of charge, and it is consistent with the decision of the Joint EEA Committee from October 21st 2011. With the Regulation, one benchmark has been decided for phase two in 2012 and another one for phase three in 2013-2020. In phase three, aircraft operators receive 0.6422 allowances per 1,000 tonne-kilometres flown.
Nine aircraft operators applied for free allowances to the Environment Agency of Iceland. Based on the benchmark and verified information from aircraft operators on the number of tonne kilometers in their operations, the Environment Agency of Iceland calculated their free allowances for phase two in 2012 and for phase three in 2013-2020.
Following the decision of the EEA Joint Committee No.62/2014 amending Annex XX (Environment) to the EEA Agreement, and that Regulation amending Directive 2003/87/EC will be incorporated into the EEA Agreement, the scope of the EU-ETS has been reduced, and no action to be taken against aircraft operators in respect of:
- all emissions from air transport to and from airports, that are located in countries outside the European Economic Area (EEA), in each calendar year from 1 January 2013 to 31 December 2016,
- all emissions from air transport between airport, which is located on the outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union, and an airport, which is located in a different area of the EEA, on each calendar year from 1 January 2013 to 31 December 2016,
- surrendering of allowances corresponding to verified emissions for 2013, from flights between airports that are located in the EEA, which occur no later than April 30, 2015 instead of April 30, 2014, and verified emissions for those flights reported no later than March 31, 2015 instead of 31 March 2014.
Therefore, aircraft operators that have received free allowances will receive fewer allowances since they are allocated in proportion to the reduction of obligations in surrendering of allowances in the period 2013-2016.
With reference to the above provisions, the Environment Agency of Iceland has re-calculated the allocation of allowances for aviation in the EU- ETS for the period 2013-2016 in accordance with Regulation 1131/2011 on the allocation of free allowances to aircraft operators.
Aircraft operators that have been allocated free allowances but are exempted from the EU-ETS until 2020 based on a temporary exemption for flights performed by non-commercial aircraft operators with total annual emissions lower than 1 000 tons CO2 per year, will only be allocated the allowances but they will not be transferred to their account in the Union Registry. If, in the future, for a certain year or permanently, an aircraft operator will increase its activity above the exemption, they will be included again and receive the allocated allowances.
Following aircraft operators have been allocated and received free allowances:
|CRCO||Aircraft operator||Allocation 2012||Annual allocation 2013-2016||Total allocation 2013-2016|
Following aircraft operators have been allocated allowances but they have not been transferered since they are under an exemption:
|CRCO||Aircraft operator||Allocation 2012||Annual allocation 2013-2016||Total allocation 2013-2016|
|28475||Silk Way Airlines||68.550||4||16|
|36291||RAFAN HOLDING BV||40||1||4|
|35130||Switchback Argentina, LLC||1||0||0|
|35682||Investair 300, LLC||3||1||4|
Special Reserve for new entrants and fast growing airlines
New aircraft operators in the EU Emissions Trading System (EU ETS) can apply for free allowance from the ETS. In the period 2013-2020, the total quantity of allowances to be allocated for the aviation sector is 95% of the EEA-wide historical aviation emissions, and from that 82% of the allowances are granted for free to aircraft operators, 15% are assigned by auctioning and 3% remain in a special reserve for later distribution to fast growing airlines and new entrants into the market. In the period 2013-2020 the allocation from the reserve is from 1. January 2017 to 31. December 2020. New entrants are:
- Aircraft operators, who start flight operations mentioned in Annex II after monitoring year during current period, see Art. 18 (3) which was the year 2010, or
- Aircraft operators who increase the number of tonne- kilometres in their activity by an average of more than 18% per year between 2010 and 2014.
Aircraft operators that wished for allocation from the Special Reserve had to hand in their monitoring plan for tonne kilometers in August 2013 and will hand in verified tonne kilometre report before 30. June 2015.
Further information on allocation of free allowances can be found in art. 18-20 in the Icelandic Law on Climate Change.