Implementing the Aviation Emissions Trading System ‘stop the clock’ Decision in UK Regulations

Under the aviation EU ETS all aircraft operators who fly into or out of aerodromes in the European Economic Area (EEA) are required to monitor their carbon emissions each calendar year from 1 January 2010. Aircraft operators are required to then submit an independently verified report of their carbon emissions for these flights, to their respective regulator, by 31 March of the following year. Subsequently, from 30 April 2013, aircraft operators must surrender the corresponding number of carbon dioxide (CO2) allowances and project credits to the Registry, to account for their annual verified emissions in the preceding year. In November 2012 the European Commission announced that it would “stop the clock” on the implementation of the extra-EEA aspects of the Aviation Emissions Trading System. On 20th November it published its proposed decision, to be agreed through the European co-decision process. The proposal aims to temporarily suspend the enforcement of the obligations of aircraft operators operating flights to or from aerodromes located in the European Economic Area (EEA), (including for this purpose Croatia, Switzerland and the dependent territories of EEA States) and third-party countries under the Aviation EU ETS. The effect of this is that only aircraft operators’ flights between EAA aerodromes will face enforcement for failing to monitor emissions and submit emissions reports and surrender allowances and project credits for their 2012 emissions. The suspension of compliance obligations is on the condition that aircraft operators return any free allowances that have already been allocated for 2012 in respect of their international flights.

The proposal aims to foster goodwill at ICAO and allow negotiations in the International Civil Aviation Organisation (ICAO) to make progress towards reducing aviation emissions, free from the distraction of opposition to the Aviation EU ETS. Should no “clear and sufficient” progress be made, obligations on international flights will once again apply. However, if there is sufficient progress in ICAO then the Commission states it will propose further legislative action to permanently amend the aviation EU ETS. Article 25a of the EU ETS Directive (2008/101/CE) allows amendments to be made to the scope of the aviation activities covered, in the case of equivalent measures being adopted by one or more third countries, or of a global agreement.

The ‘stop the clock’ proposal is currently in the final stages of the EU co-decision process and is expected to be agreed at Plenary between 15th and 18th April. This is also expected to be the date that the Decision comes into force. Consequential amendments are needed to the relevant provisions of the UK regulations to ensure that the UK regulators have the appropriate domestic powers to apply the derogation.

This consultation seeks views on the draft statutory instrument: The Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2013 (“the proposed regulations”). These Regulations will amend the transitional provisions of the Greenhouse Gas Emissions Trading Scheme Regulations 2012 to reflect the EU ‘stop the clock’ decision. The consultation will be of particular interest to aircraft operators, aerodrome operators and environmental groups. This consultation is not limited to these stakeholders; any organisation or individual is welcome to respond. The consultation document summarises the key issues that we are seeking views on, however we would also welcome views on any other issues concerning the draft Regulations.

This consultation will commence on 18 March 2013 and will run for 2 weeks. This short consultation period reflects the relatively narrow scope of this consultation and the fact that the decision must be implemented in UK law as quickly as possible to provide legal clarity. This consultation document should be considered in conjunction with the Impact Assessment.