UK Government announces first consultation on regulations under which the aviation EU ETS will operate
Rt. Hon. Geoff Hoon, UK Secretary of State for Transport
Wed 4 Mar 2009 – A 10-week consultation has been launched today by the UK’s Department for Transport (DfT) and Department of Energy and Climate Change (DECC) that seeks responses to proposed regulations under which the EU Emissions Trading Scheme (ETS) will operate in the UK. The regulations set out a date of 31 August 2009 by which time the 780-odd aircraft operators to be administered by the UK should submit a benchmarking plan if they wish to apply for free allowances. The Government also confirmed that the Environment Agency will regulate the scheme in England and Wales, and will be supported by the Civil Aviation Authority.
The moves were announced by Transport Secretary Geoff Hoon at the Omega Dissemination Conference held in London. “The launch of this consultation shows that the United Kingdom is serious about carrying out its obligations in respect of the trading scheme,” he told delegates. “Over the next ten weeks we will be inviting responses from all of the aircraft operators on the Commission’s draft list of those to be regulated by the UK, as well as from airport operators and environmental NGOs.
“As regulator of the scheme, the independent Environment Agency will ensure that operators appropriately monitor their emissions in the lead-up to the start of the scheme and will be tasked with ensuring that operators comply with its requirements.
“Both steps mark significant progress towards the implementation of a scheme that will enable the aviation sector to take responsibility for its carbon emissions in the most cost-effective way.”
The transposition of the ETS aviation directive in the UK will be done in two stages and this consultation covers only the first set of regulations. These essentially provide for a voluntary system for aircraft operators to apply for a free allocation of allowances if they submit a benchmarking plan by 31 August 2009. Although operators face no sanction for not complying, they will lose the opportunity for the free allowances not only for the first year of the scheme, 2012, but also the second phase of the ETS, which runs from 2013 to 2020. If an operator does not receive a free allocation, they will be required to buy all of the allowances to cover their CO2 emissions from the market when the requirements to surrender allowances start in April 2013 in respect of the year 2012.
The regulations set out requirements for operators to submit a plan setting out how they will monitor emissions and to monitor from 1 January 2010 in accordance with that plan. The consultation also lays out civil penalties for operators not complying with the directive with fines rising upwards from £5,000 ($6,300), with the potential seizure of aircraft for non-payment.
As well as providing for the voluntary system for an application for free allowances, the regulations place several mandatory obligations on aircraft operators. Operators are required to submit a plan to monitor emissions (the emissions plan), monitor in accordance with an approved emissions plan in 2010, and submit a verified report of those emissions to the regulator by 31 March 2011. Emissions reporting means calculating CO2 emissions from fuel usage. These obligations are mandatory and civil penalties will be imposed by the Environment Agency where operators fail to comply.
In January it was announced that the Environment Agency, which also regulates the wider ETS, and the Civil Aviation Authority have also been tasked with ensuring that expansion at Heathrow Airport is achieved within set noise and air quality limits. Aircraft operators based in Scotland and Northern Ireland will be regulated by the Scottish Environment Protection Agency and the Chief Inspector for Northern Ireland.
The timetable announced by the DfT for implementing the first set of regulations is as follows:
4 March 2009 – Formal consultation issued
14 May 2009 – Formal consultation closes
1 July 2009 – Regulations laid before the House of Commons
3 August 2009 – Statutory Instrument enters into force
31 August 2009 – Operators to submit monitoring plans to the Regulator
The second stage regulations will cover obligations on aircraft operators to surrender allowances equal to their emissions; auctioning; special reserve; project credits; third country measures to reduce the climate change impact of aviation; EU-wide operating ban; and regulations on monitoring and reporting, verification and accreditation. A second consultation on these regulations will be announced later this year.
Geoff Hoon also told the Omega conference: “Having taken the lead in promoting the inclusion of aviation in the ETS, the Government will be pressing hard for international aviation to be part of the global deal on climate change at Copenhagen later this year.
“I particularly welcome the fact that four of the world’s major airlines have recently joined in the call for a global deal in relation to aviation. The industry needs to be part of the solution.”
