The EU Emission Trading Scheme (EU ETS) is key to reducing greenhouse gases (GHG), incorporating aviation since 2008 under its “Cap and Trade” system.
This scheme limits emissions, allowing for trading of CO2 allowances. Aircraft operators face a detailed regulatory environment, managing “full” and “reduced” scopes for compliance. Our EU ETS verification service ensures precise adherence to emissions reporting and allowance surrendering, guided by rigorous standards.
The EU ETS operates under the ETS Directive, mandating coverage for flights within the European Economic Area (EEA). This includes all member states and encompasses both full and reduced scopes of operation, distinguishing between general inclusion and specific emissions monitoring, reporting, and allowance surrendering requirements.
Evolving Cap and Linear Reduction Factor (LRF):
The aviation sector sees a yearly emissions cap decrease, determined by the LRF, set at 1.74% from 2013 to 2020, and adjusted to 2.2% starting in 2021, thereby reducing the total allowable emissions progressively.
Current Reduced Scope Includes:
De-minimis Threshold:
Exemptions apply to operators under certain thresholds, aimed at small emitters and less frequent flyers, with specific criteria for commercial and non-commercial operators. These thresholds are reassessed annually until 2030.
Simplified Procedures for Small Emitters:
Operators qualifying as small emitters benefit from simplified monitoring, reporting, and verification protocols through Eurocontrol’s tools, tailored to reduce administrative burdens based on emissions volume or flight activity.
Accurately track annual emissions and prepare comprehensive reports.
Align with EU ETS standards, establish a compliance team, and organize verification activities.
Collaborate with specialized verification bodies like NORMEC VERIFAVIA for expertise in verification.
Conduct strategic and risk analyses, plan meticulously, and execute the verification plan, including data analyses alongside and site evaluations.
Maintain an open Issues Log, consolidate internal evaluations, undergo technical reviews, and achieve a Verification Opinion.
Comply with submission requirements, secure approvals, and validate compliance through the Verification Opinion.
Rockwell Collins
It was great working with Tobias and Gary and the team again this year. And thank you especially for your information and guidance on EU ETS in general, as well as your ability to accept last-minute stragglers for verification. You guys are like my not-so-secret weapon to get the job done no matter the circumstances.
In 2012, the EU-wide cap on aviation emissions is set at 97% of the average annual emissions for the years 2004-2006. In 2013-2023, the cap was lowered to 95%.
The first trading period is the year 2012, and the second is the 2013-2020 period (initially but now extended until 2023).
85% of the emissions cap is given to airlines free of charge based on reported payload for 2010.
15% of the emissions cap is available through auctioning while additional allowances to cover growth must be purchased from other sectors (open trading).
See more info here: EU ETS Aviation – Baseline and Trading Periods
Aviation ETS concerns all aircraft operators of all origins operating flights to, from and within EEA.
Commercial operators that are below the threshold (“De Minimis” rule) are excluded from ETS. This concerns commercial operators operating:
Non-commercial operators with total annual emissions lower than 1 000 tonnes per year (“De Minimis” rule) are excluded from ETS.
Simplified procedures
Non-commercial and commercial operators that emit below 25,000 tCO2 (full scope) per year are also considered small emitters and can use simplified monitoring procedures.
Non-commercial operators with flights fewer than 243 flights per period for 3 consecutive 4-month periods (full scope) and Commercial operators that emit below 3,000 tCO2 (reduced scope) can use simplified monitoring procedures.
Exemptions
Some flights are excluded from the scheme:
Note that:
Operators subject to the European Union Emissions Trading System (EU ETS) have each assigned a Competent Authority (CA), to which they must report. These operators have specific obligations:
Aircraft CO2 emissions are an exact multiple of fuel consumption.
To calculate fuel consumption there are two different approaches for aviation (Method A and Method B).
CO2 emissions are then calculated by multiplying the mass of fuel by the emission factor:
EMISSIONS = Fuel Consumption (in tonnes) × Emission Factor (in CO2 kilograms per tonne of fuel)
Type of Fuel & Emission Factor (tCO2/tFuel)
Airlines have a choice between two methodologies for monitoring fuel use.
Airlines must monitor fuel use for each flight including fuel consumed by the APU.
Method A includes APU fuel after the flight whereas Method B includes APU fuel before the flight.
A methodology must be selected and consistently applied for each aircraft type.
Fuel consumed in Flight N: C – F + E (Method A) or A + B – D (Method B)
Possible sources for fuel uplift and fuel in tanks:
Possible sources for fuel density
Uncertainty assessment is an integral part of the monitoring and reporting guidelines.
Airlines are required to monitor tonne-kilometer data and fuel consumption over an annual reporting period to a maximum level of uncertainty of 2.5% for Tier 2 or 5% for Tier 1 operators.
Airlines must understand and identify possible causes of uncertainty of monitoring.
Airlines must take all necessary action to prevent missing data from occurring by implementing suitable quality control activities.
* Calibration certificates of on-board systems, National laws, Fuel suppliers’ accuracy standards, Clauses in customer contracts, Routine checks
Operators are required to have their reported emissions data and Annual Emissions Report (AER) verified by an independent third party called a verifier or a verification body.
Verification bodies of greenhouse gas emissions under the EU ETS Directive must be accredited according to the ISO 17029 standard and a legal entity accredited by a National Accreditation Body (NAB) according to the requirements of the AVR.
Verifiers review the accuracy of emissions data, calculations, and AER to ensure compliance with EU ETS regulations. The opinion statement provided by the verifier is submitted to the Competent Authority (CA), enhancing transparency and reliability in emissions reporting.
The aim of the verification is to reach a verification opinion with reasonable assurance whether:
The verification process comprises of a strategic analysis, a risk analysis, a verification plan, the verification of process and data (done on-site if required), an internal verification report that must be reviewed by a technical reviewer and a final verification report that includes the verification opinion. The whole verification process must follow the verifier’s approved procedures.
The Monitoring Plan should document monitoring procedures for aircraft, flights, CO2 emissions, risk assessment, data flows, and control activities.
Yes, all procedures outlined in the Monitoring Plan must be both compliant with the MRR requirements and effectively implemented by the operator.
Yes, any changes to the Monitoring Plan need to be communicated to and approved by the Competent Authority (CA).
Member States have the authority to permit aviation operators to use standardized or simplified monitoring plans based on their discretion.
The Monitoring Plan should be updated when:
Yes, the European Commission provides templates for Monitoring Plans.
Additionally, some Member States might offer customized versions or electronic reporting systems.
No, the updated Monitoring plan does NOT need to be verified. It must be submitted to the Competent Authority for approval. It is better to send any question you may have about this new requirement directly to the Competent Authority.
As EU-ETS is a ‘Cap and Trade’ scheme the first allocations were made in the year 2012. The European Commission published the benchmark values used to allocate greenhouse gas emission allowances free of charge to more than 900 aircraft operators.
Publication of the benchmark values enables operators to calculate their free allocation of allowances up to 2020. There were two benchmarks set initially, one benchmark has been calculated for the 2012 trading period and another for the 2013-2020 trading period. In the 4th Phase of EUETS from 2021 Linear Reduction Factor is applied at 2.1%. Free allowances will be systematically phased out from 2024 to 2026.
» Go to the EC (European Commission) web site
The Union Registry is an online database hosted and managed by the European Commission. It operates in a similar same way to an internet bank account, and records allowance allocations for aircraft operators, annual verified emissions, transaction history of allowance transfers and surrenders of allowances.
All aircraft operators must open a registry account with the Union Registry in order to comply with the EU ETS as the allowances that correspond to the annual emissions must be surrendered every year through the Registry by 30 April of the following year.
The Union Registry is an online database hosted and managed by the European Commission. It operates in a similar way to an internet bank account, and records allowance allocations for aircraft operators, annual verified emissions, transaction history of allowance transfers and surrenders of allowances.
The Operators emitting less than 25,000 tCO2 per year or operating fewer than 243 flights per period for three consecutive 4-month periods are considered small emitters. Most business jet operators and corporate flight operators are small emitters.
Small emitters can use either the normal procedure to monitor fuel consumption (method A or B) or the simplified procedure (the small emitters tool or the ETS Support Facility from Eurocontrol).
Verifavia developed a highly simplified verification approach for small emitters using the simplified procedure which is conducted remotely by email. Verifavia’s verification service includes full guidance and compliance support.
At the beginning of the EUETS between 2010 and 2013, Verifavia conducted EU ETS verification of around 700 small emitters from 60 countries and reporting to 24 different EU competent authorities. 65% of these small emitters are corporate flight departments of large US firms.
Also, the latest version of the small emitter tool is to be used for reporting emissions of flights every year, which is released at the end of the given year. The Small Emitters Tool is available free of charge online for small emitters and for any operator with data gaps.
Geographical scope of Annex 1 flights
EU ETS full scope:
All flights to/from EEA Member Countries (including all flights to/from territories of EEA Member Countries and all flights to/from EEA outermost regions).
EEA Member States:
Austria (AT), Belgium (BE), Bulgaria (BG), Croatia (HR), Cyprus (CY), Czechia (CZ), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Germany (DE), Greece (EL), Hungary (HU), Ireland (IE), Italy (IT), Latvia (LV), Lithuania (LT), Luxembourg (LU), Malta (MT), Netherlands (NL), Poland (PL), Portugal (PT), Romania (RO), Slovakia (SK), Slovenia (SI), Spain (ES), Sweden (SE), Norway (NO), Iceland (IS), Liechtenstein (LI).
Territories of EEA Member Countries:
Melilla (ES), Ceuta (ES), Åland Islands (FI), Jan Mayen (NO).
Outermost regions of the EEA Member Countries:
Canary Islands (ES), French Guiana (FR), Guadeloupe (FR), Martinique (FR), Mayotte (FR), Reunion (FR), Saint Martin (FR), Azores (PT), Madeira (PT).
Geographical scope of ‘intra-European’ Annex 1 flights
EU ETS reduced scope:
Registry – Open & Operate
Aircraft operators must have an account open with the Union Registry in order to be able to comply with the EU ETS.
The Union Registry is an online database hosted and managed by the European Commission. It operates in a similar way to an internet bank account, and records allowance allocations for aircraft operators, annual verified emissions, transaction history of allowance transfers and surrenders of allowances.
Click here for more information about the Union registry
Registry – Propose
If you report to Austria, Croatia, Denmark, Finland, Germany, Hungary, Iceland, Ireland, Italy, Lithuania, Luxembourg, Malta, Netherlands, Norway, Portugal, Romania, and Sweden, it is your responsibility to enter (to ‘propose’) your emissions in the Union Registry. In order to do so, you need to appoint Verifavia as your verifier. As soon as you have proposed your emissions, please send me an email so that I can validate your entry through the Union Registry account of Verifavia.
Click here to go to the Registry website
Click here to access the user guide
If you report to any other Member State, it is either you or the national registry administrator who enters your emissions. Verifavia is not involved in this process. Please contact your Competent Authority if you have any doubts about what you have to do.
Registry – Surrender carbon allowances
By 30 April, you must log on to your account and surrender the number of allowances that correspond to your verified and validated annual emissions figure. 1 tonne of CO2 emissions corresponds to 1 allowance.
You must do this through your Union Registry account before 30 April N+1. Please note that this deadline is a ‘hard’ deadline, meaning that access to the Union Registry is expected to be blocked starting from 1 May.
The new EU ETS regulation restricts EU ETS to intra-European flights for the period 2013-2030 and exempts small emitters below 1,000 tCO2 for the period 2013-2030.
This means that only flights operated between airports located in the European Economic Area (EEA) must be reported. Extra-European flights (flights between the EEA and third countries, and vice-versa) do not have to be reported.
List of EEA Member States
Austria (AT), Belgium (BE), Bulgaria (BG), Croatia (HR), Cyprus (CY), Czechia (CZ), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Germany (DE), Greece (EL), Hungary (HU), Ireland (IE), Italy (IT), Latvia (LV), Lithuania (LT), Luxembourg (LU), Malta (MT), Netherlands (NL), Poland (PL), Portugal (PT), Romania (RO), Slovakia (SK), Slovenia (SI), Spain (ES), Sweden (SE), Norway (NO), Iceland (IS), Liechtenstein (LI).
List of European territories also included in the EEA: Melilla (ES), Ceuta (ES), Åland Islands (FI), Jan Mayen (NO).
Flights between any aerodromes located in the EEA and offshore installations located outside territorial waters, such as oil and gas production or exploration platforms, also remain fully covered under the EU ETS.
Note that Basle-Mulhouse (LFSB) is considered to be in France.
EEA outermost regions
Although they are part of the EEA, flights between the EEA outermost regions and any other EEA area or third countries are fully excluded from the scheme.
The EEA outermost regions are Canary Islands (ES), French Guiana (FR), Guadeloupe (FR), Martinique (FR), Mayotte (FR), Reunion (FR), Saint Martin (FR), Azores (PT), Madeira (PT).
Important note: Flights operated within the same EEA outermost region must still be reported.
Indicative list of airports in the EEA outermost regions:
European territories not included in the scope
The following European territories are not considered to be part of the EEA: Greenland, Faroe Islands, Svalbard, Guernsey, Jersey, Isle of Man, Akrotiri and Dhekelia.
Consequently, flights between the EEA and these territories must not be reported.
