Explanatory Memorandum to COM(2012)697 - Temporary derogation from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the EC

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At the International Civil Aviation Organisation (ICAO) Council's meeting of 9 November 2012, significant progress was made towards the goal of the global regulation of aviation emissions.

This proposal for a Decision is intended to reinforce this positive momentum, and to enhance the chances of a successful outcome of the 2013 ICAO Assembly in terms of developing a global market-based measure (MBM) and adopting a framework facilitating States' application of market-based measures to international aviation.

The Decision would 'stop the clock,' by temporarily deferring enforcement of the obligations of aircraft operators in respect of incoming and outgoing flights under the European Union's Emission Trading System (ETS). This proposal thus demonstrates the EU's strong political commitment to facilitate and drive forward the successful conclusion of these ICAO processes.

The Decision derogating temporarily from the ETS Directive is designed to ensure that action is not taken against aircraft operators which do not meet the Directive's reporting and compliance obligations arising before 1 January 2014 in respect of incoming and outgoing flights. The condition for this is that they have either not received, or have returned, 2012 free allocations granted for such activities to or from aerodromes outside the EU and closely connected areas with a shared commitment to tackle climate change. Proper monitoring, reporting and verification of emissions from such flights is welcomed, but no compliance sanctions will be applied in respect of the non-reporting of such emissions.

The Directive continues to apply in full in respect of flights between aerodromes in the EU and closely connected areas with a shared commitment to tackle climate change. Consequently, all aircraft operators which have performed aviation activities falling within the Directive between such aerodromes in 2011 and in 2012 are required to comply with monitoring, reporting and verification requirements. By 30 April 2013, all aircraft operators which operated such flights in 2012 are required to surrender allowances or international credits in respect of emissions from those flights.

This Decision gives space for progress to be made at the ICAO Assembly that takes place in September 2013. If clear and sufficient progress is made at the ICAO Assembly, the Commission will propose appropriate further legislative action. Article 25a of the Directive would enable amendments to be made to the aviation activities covered for requirements arising after 1 January 2014. Aircraft operators which intend to operate flights to and from aerodromes in the EU should be aware that, in the absence of such modifications, they are responsible for emissions from flights to and from those aerodromes from 2013 onwards. The free allocations made by February 2013 in respect of 2013 emissions are also subject to potential modification in the event that measures are adopted pursuant to Article 25a.

Other obligations in respect of such flights remain unaffected, and the percentage of auctioning remains at 15% as laid down in the Directive. Consequently, a lower quantity of aviation allowances will be auctioned for 2012, reflecting the proportionately lower number of total allowances in circulation.

To provide further momentum to the international discussions and continue EU leadership in this process, it is important that this proposal is agreed between the European Parliament and Council swiftly and ideally by March 2013. The Commission confirms that pending completion of the legislative process, aircraft operators which have either not received free allocations for 2012, or have returned, such free allocations to the appropriate account, should not expect the Commission to require enforcement activities to be taken against them by Member States in respect of emissions from flights to or from aerodromes outside the EU and closely connected areas.