Since our last update on 24 October 2017, readers will recall that amendments to the EU emissions trading system (EU ETS) were pending, following an agreement between the European Commission, the European Parliament and the Council in October 2017 (the agreement). On 8 December 2017, the UK Government opened a consultation on implementing the amendments to the EU ETS into English law(the EU ETS consultation).

The proposed amendments to the EU ETS will have the effect of:

  1. extending the derogation for international flights operating to/from Europe from 31 December 2016 to 31 December 2023
  2. introducing a simplified procedure for operators, where they emit less than 3,000 tonnes of CO2 per year for intra-EEA flights (i.e. flights between airports within the EEA only) and
  3. extending the current exemption from the application of the EU ETS for non-commercial operators emitting less than 1,000 tonnes of CO2 per year to 2030

It is known that concerns remain in respect of the potential for double regulation once ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) comes into effect from 1 January 2021. This has been recognised in the agreement, which contains provision for the European Commission to carry out a review of CORSIA in order to put forward proposals for future intra-EEA flights. Whilst this is welcomed, the industry has called for consideration to be made to international flights, pointing out that they should fall exclusively within CORSIA, and removed from the scope of the EU ETS, when it is implemented on 1 January 2021.

The consultation closed on 5 January 2018 and the UK Government is currently considering the industry’s responses. It is anticipated that the proposed amendments will be incorporated into the UK’s Greenhouse Gas Emissions Trading Scheme Regulations 2012 (as amended). The amendments are required to be implemented by 31 March 2018.