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European Union Emissions Trading Scheme (ETS)

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Old 12th Mar 2009, 10:39
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European Union Emissions Trading Scheme (ETS)

Consultation on Transposition of EU Directive (EC/2008/101) to include Aviation in the European Union Emissions Trading Scheme (ETS)

Rarely do I feel moved to start a thread but I suspect many Operators will not be aware of the impact of this legislation which may require monitoring next year followed by implementation in 2012.

Although the topic has been raised before on PPRuNe, our company (and maybe yours) has now had a letter from the Department of Energy and Climate change, Go to the following

Consultation on including aviation in the EU ETS - Department of Energy and Climate Change

and then a pdf “Letter to Consultees”

The DECC contact number is a voice mail - I assume they don’t really want to talk to you directly.
So far the e-mail address hasn’t worked -oh hum

After that you are on your own to dig into a minefield of legislation.

I don't know how this information is being distributed to Operators outside the EU?

It is something that will have a cost element to nearly all Corporate/AOC operators no matter what their registration.. There are some exclusions but not many.

So far as I can see
1) In spite of what they say it is a tax. There are some estimates what it will add to the price of airline tickets. I not found any estimates for it's impact on Corporate/AOC
2)For corporate, if you are, for example, flying direct from the US to the EU you will will be assessed on the entire leg - not just the time within Eurocontrol and of course on the return.
3) You can apply for a free allowance but this looks to be only about 5% of your total and would involve a lot of paperwork plus a Verifier to come in and check your paperwork. A simpler system may be possible by giving up the free allowance.
4)A very rough calculation for our small company jet indicates a cost of between 900 Euros and 18,000 Euros (Carbon @30Euros/Ton) a year for 400hrs depending on the value Carbon is trading at if all of this flying was within the EU.

Being old and cynical I would not expect anything from this “Consultation” but you never know. This consultation ends on the 14 May 2009 -no pressure.

There is an awful lot of information not exactly hidden but buried within various links.

I'm still working through this but the simplest thing is to just fly and pay which is what it will probably come down to!

Over to the PPRuNe experts to put my mind at rest Well 2012 at least takes me nearer to retirement!

Mike Echo
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Old 12th Mar 2009, 10:50
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Rarely do I feel moved to start a thread but I suspect many Operators will not be aware of the impact of this legislation
A very small number of ppruners have been covering ETS and related subjects.

Wake up muppets...
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Old 12th Mar 2009, 13:02
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The letter arrived on my desk yesterday and whilst I'm aware that BBGA are responding to it, I think it's very important that individual companies do as well - another tax at the moment is not what we need to keep this industry alive. I am not shirking my environmental responsibilities, but a delay in implementation is required given the turmoil the rest of the world is causing.

I really would appreciate knowing other people's arguments for this, just in case the one I am forming isn't deep enough to hit home in Whitehall...

But we MUST all respond.

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Old 12th Mar 2009, 13:21
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Environmental responsibilities don´t come in to it, This is a TAX and will simply drive up costs, nothing more. We must however all respond.

With regard to the levy being calculated on the whole leg, not jsut the eurocontrol portion, My understanding is the US/Canadian authorities are really upset about the prospect of the EU generating tax revenues from flights conducted in their airspace.
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Old 12th Mar 2009, 13:51
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I guess that the americans\canadians will just add their own tax on top of our lovely european bit
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Old 12th Mar 2009, 14:36
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Aren't we lucky to have to pay 750 quid each, to have them look at our emissions plan - in addition to the payments we'll have to make.

And it's so understanding of them to impose such lovely fines if we don't toe the line by end of August - 5 grand, plus 500 a day. Don't pay up within 6 months? Prepare to have 'em sell one of your aeroplanes...

Nice.
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Old 12th Mar 2009, 14:42
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Just in case you wanted to check out if your aircraft is listed and who your "Competent Authority" is go to

http://ec.europa.eu/environment/clim...ors_110209.pdf

The annex contains a list of aircraft operators to be administered by each Member State. Curious that the US is listed as a Member State for administration wonder if they know yet? Although this gives you the Country, who the Competent authority is is not listed. In the UK it could be the "Enviroment Agency", CAA, or DOT. This seems to be very vague.

As Daifly said BBGA is well up on this

Mike Echo
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Old 12th Mar 2009, 16:35
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The other issue here is we´re panicing about how were going to comply with all this.

The real answer is for EVERY operator on that list to write to their competent authority and tell them exactly where to get off. I´d like to see them put a stop to Aviation in Europe because they pushed us too far and wouldn´t take another airhead pocket-lining scheme.

It´ll never happen I know but It IS the answer.
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Old 12th Mar 2009, 18:17
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No need to be cynical about this new TAX, because HMG has already told the EU parliament that it does not intend spending it's share of this windfall on environmental projects!
This is just the beginning of the massive clawback that is required to service UK's national debt. While BBGA and all other operators should take umbrage and represent their objections, unfortunately it is all too late, as this plan is now a "fait accompli" in European law.
The only real hope of getting it deferred, or better still rescinded is for the rest of the non EU world to object through the WTO.
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Old 12th Mar 2009, 18:31
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Well that looks like we are out of business...........

For an "operation" that buys around 50usg of fuel a WEEK the overhead is going to be ridiculous.

Why are these people so set on killing that goose that pays the golden taxes?
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Old 12th Mar 2009, 20:36
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Paradise Lost,

Sorry to rain on your parade, but the UK "only" runs a debt of arround 45% of GPD. Schermoney runs close to the 70%-mark, but they will still weigh into the ETS at exactly the same level as the UK.

Therefore, the "clawback" argument seems feeble. They claim it because they want us to produce less emissions. As people have said, companies will go out of business, thereby producing less CO2, NO2 etc. etc., fewer seats available and only larger operators will survive = higher seat price, fewer flights = mission accomplished.

It's not because they want your money (ok, they'll take it as a windfall, thank you very much), they want fewer flown seat kilometres. Being under any illusions in this respect is not going to help us.

Look at it this way - it's a CI regulator. Most corporate outfits have such small fleets and so few seats that maintenance is the biggest cost. Therefore, we fly around at speed rediculous or CI=200. With the ETS, ECON speed will be brought well below Mmo. It's no different than taxing your petrol - if each litre of petrol cost 100GBP, you wouldn't drive your car as much or in the same way as you do now, would you?

The unfair bit is that many other businesses with huge emissions were given carbon credits for free as grandfarthering rights, emissions they can now trade at a profit. I haven't heard anybody mention what emission allowances will be grandfarthered to the aviation industry (but then again, I've been too lazy to look it up myself ).

As a way of regulating human behaviour, nothing has ever come close to taxes... or risk of punishment - maybe that should be considered? If you exceed your emissions allowance (or fail to reduce it along a schedule), first the CEO goes to jail. If that doesn't work, we'll have the CFO as well. The rest of the board can follow in whatever order the company can best spare them!
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Old 12th Mar 2009, 21:21
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Wink ...oh, that wasn't so hard after all...

OK, that didn't take long to read up on - so here's te deal:

1) Take the no. of pax and multiply by 100 kg. (or the mass of your freight)

2) Divide the result into a 1000 kg. This is your "tonnage"-figure

3) Take the distance you've flown based on your flight planning softwares route calculation and multiply by 1,852. This is your "kilometers"-figure

4) Multiply "tonnage" by "kilometers" to obtain TonnesKilometers (or TKm)

5) Submit a paper stating the above to DfT no later than 31/08/09.

6) Include a cheque for 830 GBP for them to approve your plan.

7) Include a new field on every flight envelope marked "TKm" and let the crews do the calculation after every flight.

8) When the envelope comes in, enter the TKm value for each flight in the benchmarking year 2010.

9) Jan 1st 2011, call in your accountant (or anybody else that could work as a "verifier") - make them countersign you TKm total for 2010.

10) Send in your verified accounts for 2010 and obtain your free carbon allowance.

11) The smart operator will - anticipating changes to legislation at a later date to account for fuel savings etc. - already now calculate how much fuel they burn pr TKm. Make the crews take actual fuel burn (from tech log) and divide it by the TKm, giving you tonnes of fuel pr TKm or T/TKm.

12) Scream to your legislator that your company uses CDA-approaches and have bought a brand new GLX5K in stead of the old, smokey G4. Demand that actual emissions be taken into account. When that happens, you'll be glad you've already got all the data from item 11) above.

13) Fly a lot in 2010 - even if it's at a loss!!! Those carbon credits are gonna be nice to have in the carbon bank for a rainy day! You could, e.g. sell them on (cue evil laughter!)

14) When you recieve your allowance, make an optimistic guess that you'll fly 10% more TKms than your allowance. Then spread the cost of this over every charter you do.

15) Wait & see what happens. Either all your clients run screaming for cover and drop all flying activities - or they bite the bullet and still fly, maybe not quite as often as before, but they still fly. If you can survive on that - good. If not...
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Old 17th Mar 2009, 08:54
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So, having spent all weekend reading a shedload of euro-legalese-bull, I now have a better idea of what is involved and what they think it will all cost.

The bad news is that the laws have already been passed and they didn't feel it necessary to tell the people concerned what the impact would be. There was a consultation last year on the monitoring and verification process that didn't attract a reply from a single GA operator (unless you count Netjets) - did anyone know about it?

Everyone who operates an aircraft over 12,500lbs (5,700kg) will be required to "join the scheme". There will be an exemption for small airlines, operating scheduled services, up to 10,000 tonnes CO2 per year or 243 flights per 4 month period. The fines for non-compliance, ignorance etc are capped at €50,000.....so that's OK then. The disparity between the treatment proposed for aircraft operators and the way that fixed installations were handled (in the first implementation) is staggering - the politics of envy is alive and well.

The scheme is illegal under the Open Skies agreement for airlines and has been condemned by every industry representative body that I've read so far. Get writing folks! We need to drown them in paperwork.

I have a couple of pages of comments on the scheme that I will be sending, attached to the consultation, because there is no scope in the questionnaire for telling them what you think about the scheme; only discussing the nuts and bolts of implementation.

Personally we will be withdrawing from that business sector - 3 qualifying flights in one of the previous 3 years makes it impossible, financially, to comply. I don't yet know what will be required to get our name taken off the "hit list". Incidentally, the first draft hit list was compiled by Eurocontrol using ICAO callsigns....just because you don't have a callsign doesn't mean you won't be going on the list.
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Old 17th Mar 2009, 09:16
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'Tis true that the Directive includes exemptions, but it seems that the UK has "forgotten" to include them in the 2009 Trading Scheme Regulations - or if they have, I couldn't find them. I'd be really happy if someone could do so...

http://www.decc.gov.uk/Media/viewfil...pdf&filetype=4
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Old 17th Mar 2009, 10:07
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The exemptions aren't mentioned in the UK documentation because the law has already been enacted, centrally, and they have no powers over that legislation. The individual members states are in charge of monitoring, verification and punishment - that is what the UK document is concerned with.

The doc you need is this one :
EUR-Lex - 32008L0101 - EN

and the exemptions are right at the end :
This activity shall not include:
(a)flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a country other than a Member State, where this is substantiated by an appropriate status indicator in the flight plan;
(b)military flights performed by military aircraft and customs and police flights;(c)flights related to search and rescue, firefighting flights, humanitarian flights and emergency medical service flights authorised by the appropriate competent authority;
(d)any flights performed exclusively under visual flight rules as defined in Annex 2 to the Chicago Convention;
(e)flights terminating at the aerodrome from which the aircraft has taken off and during which no intermediate landing has been made;
(f)training flights performed exclusively for the purpose of obtaining a licence, or a rating in the case of cockpit flight crew where this is substantiated by an appropriate remark in the flight plan provided that the flight does not serve for the transport of passengers and/or cargo or for the positioning or ferrying of the aircraft;
(g)flights performed exclusively for the purpose of scientific research or for the purpose of checking, testing or certifying aircraft or equipment whether airborne or ground-based;
(h)flights performed by aircraft with a certified maximum take-off mass of less than 5700 kg;
(i)flights performed in the framework of public service obligations imposed in accordance with Regulation (EEC) No 2408/92 on routes within outermost regions, as specified in Article 299(2) of the Treaty, or on routes where the capacity offered does not exceed 30000 seats per year; and
(j)flights which, but for this point, would fall within this activity, performed by a commercial air transport operator operating either:fewer than 243 flights per period for three consecutive four-month periods; orflights with total annual emissions lower than 10000 tonnes per year
In other words; anything that does not currently attract Eurocontrol will be exempt as will "small airlines".
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Old 17th Mar 2009, 11:55
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Thank you for your input, FF

One suspects that the Regulator will still require the small fry to submit plans (together with the non-refundable fee, of course), if only to prove that they don't have to. It all adds up, and Mr. D is a bit short of readies atm.

Cynical, me? Never!
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Old 17th Mar 2009, 14:35
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This is Europe my friends. A totalising power who doesn't indulge any country identity and imposes their will. And as a country if you don't agree, you'll get punished. Europe is not that democratic as many people think.

This is just a new money making machine. If the money is being used for environmental purposes, than i would say ok, but it will not. That's for 100% sure.

I'm wondering what the effect will be on aviation employment.
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Old 17th Mar 2009, 14:43
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If it is a new money making machine then it's been very badly designed!

The fees charged to the operators will only cover the costs of setting up the scheme - 25 times because each state will do its own.

Free credits will be given out to airlines up to 97% of their benchmark 2006 emissions. Great for airlines with old-tech gas-guzzlers.

A small percentage (15% I think) of credits will be auctioned so some money will be gathered.

After that we will all have to trade on the global exchanges - so the dosh will be made by other industries that already have mucho credits and can swap to renewables or move their huge industrial facilities outside the EU. Aviation can only used approved fuels so the possible savings will be meagre unless business goes totally down the gurgler. In that case the value of a few, measly credits will probably not be significant.

The point is that the costs of compliance are likely to be greater than the costs of the actual carbon credits for some small operators! It is so badly designed as to be criminal.
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Old 2nd Jun 2009, 10:00
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Did anyone else here go to the ETS seminar at Manch yesterday? I'd be interested to know what you thought of the presentations, and the children who were representing the Govt. ... for those who weren't there, one appeared to be about 9 and the other's vocabulary seemed to consist of just "Um" and "Er".

Some good points were raised by the audience - and it was painful to watch the panel squirming at their inability to satisfactorily answer many of them.
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Old 2nd Jun 2009, 15:19
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Didn't get there myself but will be attending the Heathrow one tomorrow. I got some feedback from a friend who did attend and his summary agreed with yours that it was a somewhat heated discussion. Lot of "Um's" and "R's" but with little help other than quoting the regulations.

I've raised several questions on the Environment Agency "helpline" but apart from a couple of answers they tend to quote various regulations which don't answer the question. I suspect maybe wrongly that they don't have any real understanding of Aviation and Business Aviation in particular.

I have noticed that the EA now have some further documents on their website which need to be read.

Environment Agency - EU Emissions Trading Scheme - Aviation

Guidance for the Aviation Industry
http://www.environment-agency.gov.uk...1.0_280509.pdf


ANNUAL EMISSIONS MONITORING PLAN
http://www.environment-agency.gov.uk..._operator).pdf

TONNE-KILOMETRE MONITORING PLAN
http://www.environment-agency.gov.uk...n_oerator).pdf

I'll see what tomorrow brings - but I'm not expecting much

If you are inclined go to the following;
http://ec.europa.eu/environment/clim...008/10.ata.pdf
and go to Page 17 Section 4 which it the ATA response to the consultation document it starts with "The Effort to Encompass International Aviation within the EU ETS is Illegal" Interesting reading!

Mike Echo
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