Eivind Aarnes Nilsen October 24 2011 Aviation sector joins the EU Emissions Trading Scheme Arntzen de Besche Advokatfirma AS | Environment & Climate Change - Norway Eivind Aarnes Nilsen Environment & Climate Change From January 1 2012 the Norwegian aviation industry will be a part of the EU Emissions Trading Scheme (ETS). This will result in various financial and organisational challenges to the industry. The European Commission's proposal will require aircraft operators to monitor and report emissions data arising from aviation activities in compliance with the regime. The new participants to the emissions regime include both intra-EU flights and every aircraft entering and departing from EU airports. In addition to the 27 EU member states, the ETS for aviation covers three European Economic Area (EEA)-European Free Trade Agreement (EFTA) states – Norway, Iceland and Lichtenstein. The extension of the ETS to include aviation is based on Directive 2009/29/EC,(1) which amended the EU Emissions Trading Directive (2003/87/EC) and Directive 2008/101/EC.(2) For Norway and the other EEA countries, all EU legislation must be incorporated into the EEA agreement. Directive 2009/29/EC has not been incorporated into the EEA agreement,(3)and therefore does not apply in the EFTA countries. However, the EU legislation on the implementation of aviation activities was incorporated into the EEA agreement by EEA Joint Committee Decisions 6/2011 and 43/2011.On December 26 2009 EEA Joint Committee Decision 149/2009 incorporated Decision 2009/339 on the monitoring and reporting guidelines for emissions and tonne-kilometre data from aviation activities into the EEA agreement. Based on the incorporation of this decision, the process of monitoring and reporting aviation activities in the EEA countries began in January 2010.In spite of Directive 2009/29/EC not being incorporated into the EEA agreement, most of the relevant stipulations for the third trading period with allowances (Phase III) and aviation are incorporated through Directive 2008/101/EC. Norway has implemented Directive 2008/101 as passed in regard to which operators must comply with the regime and which operators are monitored by Norway. This implies that Directive 2008/101/EC will apply in the same way in Norway as it will in the rest of the ETS countries. The existing regulations come from the Greenhouse Gas Emissions Trading Act (99/2004), but this will be revised if and when Directive 2009/29/EC is incorporated into the EEA agreement. Operators in the aviation industry affected by the regulations will be monitored by only one state that administers the regime, regardless of the number of countries to which they fly. This reduces the administration involved.The EU regulations concerning the aviation sector have been implemented into the act. According to Section 3(g) of the act, the aviation sector must comply with the restrictions regarding emissions. The following aircraft operators are subject to the new legislation: those whose licences and/or operating licences have been issued by the Norwegian authorities; those from third countries; and non-commercial EU operators that possess the highest proportion of emissions. The obligation is based on the average annual emissions between 2004 and 2006, or the starting year. The scope of application is stipulated in Sections 2(c) to 2(e), and includes emissions from: aviation activities within EFTA countries; aviation activities to and from EFTA countries; and aviation activities to and from the Norwegian continental shelf. This is in accordance with Article 3(a) of Directive 2008/101/EC.Norway is in favour of measures to reduce greenhouse gas emissions from the aviation sector. The government has publicly declared that, in principle, it supports the extension of the emissions regime to the transport sector.For further information on this topic please contact Eivind Aarnes Nilsen at Arntzen de Besche Advokatfirma AS by telephone (+47 23 89 40 00), fax (+47 23 89 40 01) or email ([email protected]).Endnotes(1) Directive 2009/29/EC of the European Parliament and of the European Council of April 23 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the European Community.(2) Directive 2008/101/EC amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the European Community.(3) The EEA agreement provides for the inclusion of EU legislation covering the four freedoms – the free movement of goods, services, persons and capital — throughout the 30 EEA states.