Greenhouse gas emissions from aviation have increased a lot and will continue to increase more in the future. It is predicted that by 2020, emissions from aviation activities will be 70% higher than in the year 2005, even though fuel savings would be 2% a year. The International Civil Aviation Organization (ICAO) forecasts that until the year 2050 the growth could be 300-700%.
Therefore, the EU has taken action to reduce emissions in Europe and to work with the international community to develop strategies with international goals in mind. One aspect of the EU policy on climate change is to reduce greenhouse gas emissions from aviation activities.
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. Aviation was incorporated into the EU ETS on January 1st.2012 with Directive 2008/101/EC. Since then, all aircraft operators that are under the scope of the trading system must obtain allowances for emissions of CO2.
Emissions from flights 2013 – 2016
In 2012, flights to and from non-European countries were exempted to allow time for negotiations on a global market-based measure applying to aviation emissions. For the period 2013-2016 the legislation has also been amended so that only emissions from flights within the EEA fall under EU ETS. There are also exemptions for aircraft operators with low emissions.
These changes were made following an agreement by ICAO in October 2013 to establish an international market-based mechanism in relation with greenhouse gas emissions from aviation by 2016 and apply it by 2020.
Amended legislation provides that the Commission reports to the European Parliament and the Council on the outcome of the 2016 ICAO Assembly and propose appropriate measures where international developement will be taken into account from 2017.
In Iceland, the change was occured with Regulation 540/2014 on the implementation of Regulation (EU) No. 421/2014 of 16 April 2014 amending Directive 2003/87/EC to establish a scheme for greenhouse gas emission allowance trading within the Community with regards to the implementation of the international convention on the application of a common market-related overall measure of global emissions from aviation activities from 2020.
Information for aircraft operators
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 on the Commission‘s webpage.
The European Commission has published some informative and insightful frequently asked questions.The European Commission’s FAQs can be found here.
Inquiries can be sent to the Environment Agency of Iceland (email@example.com).
Allocation of emission allowances from the Special Reserve for new entrants in the Emission Trading System (EU ETS)
According to art. 19 of Act no. 70/2012 on climate change, emission allowances free of charge will be allocated to aircraft operators from the Special Reserve for new entrants and fast growing airlines. For phase 3 the allocation is from 1. January 2017 – 31. December 2020.
Since the due date is getting closer the Environment Agency of Iceland wants to remind aircraft operators that operated aviation activities
The Environment Agency of Iceland has imposed an excess emissions penalty of 45.642 EUR on the aircraft operator Tunisair Express for having failed to surrender in time sufficient allowances to cover their emissions in 2013.
Ever since aviation activities have been included in the EU ETS emission trading system, aircraft operators have been obliged to acquire allowances equaling to their annual CO2 emissions.
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.
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 kilometer report before 30. June 2015.
The Environment Agency will send the applications (tonne-kilometre reports with reasons) to the EU before 31 December 2015. The decision on who will be assigned allowances will be published on 30 September 2016 and the first allocation will take place in 2017.
Further information on allocation of free allowances can be found in art. 18-20 in the Icelandic Law on Climate Change.Frequently asked questions on the Special Reserve.
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.
Aircraft Operators shall be responsible for handing their Monitoring Plans to the competent authorities in their administering state according to Directive 2008/10/EC. Aircraft Operators who upgrade their Monitoring Plans must notify the competent authority on such changes as soon as possible. Of significant changes on the monitoring methodology take place, the aircraft operator must submit the Monitoring Plan again for approval by the competent authority. Significant changes on methodology include:
- Changes in average emissions per year causing the operator no longer authorized to use Tier 1 to determine fuel consumption.
- Changes in the number of flights or in the total annual emissions leading to that the operator is no longer small emitter and is not authorized to use simplified monitoring procedures.
- Significant changes in the type of fuel used.
The Environment Agency of Iceland´s own templates, based on the European Commission’s are now available to operators from the links below.
- Tonne-kilometre monitoring plan
- Annual emissions monitoring plan
- Tonne-kilometre report
- Annual emissions report
Please note that besides submitting 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 with 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.
Small EmittersAccording 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:examples of emissions monitoring plans for aircraft 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:
Verification of aviation emission reports
Under Act No 70/2012 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 must be submitted by 31 March every year.
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. Verification shall be in accordance with Regulation (EU) No 600/2012.The Comission has prepared guidance documents to enchance understanding and coordination.
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
Lucideon CICS Limited
- Queens Road
- ST4 7LQ
- Contact: Mr Tim Watts
- Tel: +44 (0)1782 411008
- Fax: +44 (0)1782 764363
- Email: firstname.lastname@example.org
- Website: www.lucideon.com/assurance
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
1.January 2016 – Aircraft Operators start monitoring emissions for the year 2016.
28. February 2016 – Issuance of allowances for applicable aircraft operators.
31. March 2016 – Final day for verifiers to enter verified emissions for the year 2015 in the Union Registry.
31. March 2016 – Final day for aircraft operators to submit the 2015 Annual Emission Report.
30. April 2016 – Final day for aircraft operators to surrender allowances against reportable emissions.
30. June 2016 – Final day for aircraft operators to submit an Improvement Report in accordance with comments from their verifier.
30. September 2016 – Publication on allowances from the Special Reserve.
- Monitoring plans - Small emitters : 332,000 ISK
- Monitoring plans - Large emitters : 438,000 ISK
- Revised monitoring Plan - Small emitters : 121,000 ISK
- Revised monitoring Plan - Large emitters : 147,000 ISK
- Annual emissions report - Small emitters : 253,000 ISK
- Annual emissions report - Large emitters : 332,000 ISK
- Estimation on emissions - Small emitters : 108,000 ISK
- Estimation on emissions - Large emitters : 134,000 ISK