# Regulation (EU) No 421/2014 of the European Parliament and of the CouncilShow full title

Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing            a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international            agreement applying a single global market-based measure to international aviation emissions (Text with EEA relevance)         

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U.K.

# Regulation (EU) No 421/2014 of the European Parliament and of the Council

# of 16 April 2014

# amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in                        view of the implementation by 2020 of an international agreement applying a single global market-based measure to international                        aviation emissions                     

# (Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 192(1) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(1),                        

After consulting the Committee of the Regions,

Acting in accordance with the ordinary legislative procedure(2),                        

Whereas:

(1)The aviation sector has a strong international character. A global approach to addressing emissions from international aviation                              offers the best prospects for ensuring sustainability in the long term.

(2)The Union is endeavouring to secure a future international agreement to control greenhouse gas emissions from aviation and,                              in the meantime, is limiting climate change impacts from aviation activities to and from aerodromes in the Union, by autonomous                              action. In order to ensure that those objectives are mutually supportive and not in conflict, it is appropriate to take account                              of developments at, and positions taken in, international fora and in particular to take account of the resolution containing                              the ‘Consolidated statement of continuing ICAO policies and practices related to environmental protection’ adopted on 4 October                              2013 at the 38th Session of the Assembly of the International Civil Aviation Organization (ICAO).

(3)Consequently, in order to sustain the momentum reached at the 38th Session of the ICAO Assembly in 2013 and facilitate progress                              at the upcoming 39th Session in 2016, it is desirable to temporarily consider the requirements set out in Directive 2003/87/EC                              of the European Parliament and of the Council(3) to be satisfied for the period until 31 December 2016 in respect of flights to and from aerodromes in countries outside the                              European Economic Area (EEA). In doing so, the Union emphasises that legal requirements can be applied in respect of flights                              to and from aerodromes located in States of the EEA, in the same manner as legal requirements can be applied in respect of                              the emissions from flights between such aerodromes. In order to ensure legal certainty, for the purposes of this derogation,                              flights between aerodromes located in States of the EEA and aerodromes located in countries that acceded to the Union in 2013                              should be considered to be flights between States of the EEA.

(4)It is recalled that, under Directive 2003/87/EC, it is for Member States to determine the use to be made of revenues generated                              from the auctioning of allowances. Those revenues, or their equivalent in financial value, should be used to tackle climate                              change in the Union and third countries, inter alia, to reduce greenhouse gas emissions, to adapt to the impacts of climate                              change in the Union and third countries, especially developing countries, to fund research and development for mitigation                              and adaptation, including in particular in the fields of aeronautics and air transport, to reduce emissions through low-emissions                              transport and to cover the costs of administering the Union scheme. The proceeds of auctioning, or their equivalent in financial                              value, should also be used to fund contributions to the Global Energy Efficiency and Renewable Energy Fund, and measures to                              avoid deforestation. Transparency on the use of revenue generated from the auctioning of allowances under Directive 2003/87/EC                              is key to underpinning Union commitments. Under Regulation (EU) No 525/2013 of the European Parliament and of the Council(4), Member States are to submit to the Commission a report on the use of revenues from the auctioning of such allowances.

(5)The derogations provided for in this Regulation take into account the results of bilateral and multilateral contacts with                              third countries, which the Commission will continue to pursue on behalf of the Union, in order to promote the use of market-based                              mechanisms to reduce emissions from aviation.

(6)It is recalled that Directive 2003/87/EC envisages the possibility of adopting measures amending the aviation activities listed                              in Annex I to that Directive where a third country introduces measures to reduce the climate change impacts from aviation                              activities.

(7)The negotiation of all Union aviation agreements with third countries should be aimed at safeguarding the Union's flexibility                              to take action in respect of environmental issues, including with regard to measures to mitigate the impact of aviation on                              climate change.

(8)In order to avoid distortion of competition, it is important that all flights on the same route be treated in the same way.

(9)To further avoid a disproportionate administrative burden for the smallest aircraft operators, a temporary exemption should                              be added to Annex I to Directive 2003/87/EC. Non-commercial aircraft operators emitting less than 1 000 tonnes CO2 per annum should, therefore, be exempt from the scope of that Directive, from 1 January 2013 to 31 December 2020.

(10)It is appropriate to enable the use, by aircraft operators that are small emitters, of an alternative approach for the verification                              of their emissions in order to reduce their administrative burden further. Member States should be able to implement simplification                              measures that address in particular the needs of non-commercial operators that are small emitters.

(11)Special consideration should be given to mitigating or even eliminating any accessibility and competitiveness problems arising                              for the outermost regions of the Union. With this in mind, flights between an aerodrome located in an outermost region within                              the meaning of Article 349 of the Treaty on the Functioning of the European Union (TFEU) and an aerodrome located in another                              region of the EEA should also be included in the derogation established under this Regulation.

(12)In order to ensure legal certainty for aircraft operators and national authorities it is appropriate to allow until 2015 for                              the surrender and reporting deadlines for 2013 emissions.

(13)For the application of this derogation, it is important to recall that the methods for the allocation and issuance of allowances                              to aircraft operators remain those established under Directive 2003/87/EC, that is to say based on the verified tonne-kilometre                              data in respect of the relevant periods referred to therein.

(14)After the 2016 ICAO Assembly and in the light of its outcome, the Commission should provide a full report to the European                              Parliament and to the Council. In that report, the Commission should, inter alia, consider all options for the coverage of                              emissions from aviation activities and, if appropriate, swiftly propose measures in order to ensure that international developments                              can be taken into account and that any issues about the application of the derogation can be addressed. The Commission should                              also give particular consideration to the environmental effectiveness of the European Union Emissions Trading System (EU ETS)                              and, in this context, to the particular contribution of the aviation sector, including to modalities for the better alignment                              of the rules applicable to aviation activities and stationary installations respectively.

(15)Since the objectives of this Regulation, namely to introduce a temporary derogation for the monitoring, reporting and surrendering                              of allowances from flights to and from countries outside the EEA from 1 January 2013 to 31 December 2016, to lighten the administrative                              burden and simplify the administration of the scheme, cannot be sufficiently achieved by the Member States, but can rather,                              by reason of scale and effects of the action, be better achieved at Union level, the Union may adopt measures, in accordance                              with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle                              of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those                              objectives.

(16)It is essential to ensure legal certainty for aircraft operators and national authorities in view of the surrender deadline                              of 30 April 2014 as referred to in Directive 2003/87/EC. Accordingly, this Regulation should apply from the date of its adoption.

(17)Directive 2003/87/EC should be amended accordingly,

HAVE ADOPTED THIS REGULATION:

# Article 1U.K.

Directive 2003/87/EC is hereby amended as follows:

The following Article is inserted:

## ‘Article 28aDerogations applicable in advance of the implementation by 2020 of an international agreement applying a single global market-based                                    measure

1.By way of derogation from Articles 12(2a), 14(3) and Article 16, Member States shall consider the requirements set out in                                    those provisions to be satisfied and shall take no action against aircraft operators in respect of:                           

(a)all emissions from flights to and from aerodromes located in countries outside the European Economic Area (EEA) in each calendar                                    year from 1 January 2013 to 31 December 2016;                           

(b)all emissions from flights between an aerodrome located in an outermost region within the meaning of Article 349 of the Treaty                                    on the Functioning of the European Union (TFEU) and an aerodrome located in another region of the EEA in each calendar year                                    from 1 January 2013 to 31 December 2016;                           

(c)the surrender of allowances, corresponding to verified 2013 emissions from flights between aerodromes located in States in                                    the EEA, taking place by 30 April 2015 instead of 30 April 2014, and verified 2013 emissions for those flights being reported                                    by 31 March 2015 instead of 31 March 2014.                           

For the purposes of Articles 11a, 12 and 14, the verified emissions from flights other than those referred to in the first                                 subparagraph shall be considered to be the verified emissions of the aircraft operator.                           

2.By way of derogation from Article 3e(5) and Article 3f, an aircraft operator benefitting from the derogations provided for                                    in points (a) and (b) of paragraph 1 of this Article shall be issued a number of free allowances reduced in proportion to                                    the reduction of the surrender obligation provided for in those points.                           

By way of derogation from Article 3f(8), allowances that are not allocated, as a result of the application of the first subparagraph                                 of this paragraph, shall be cancelled.                           

As regards activity in the period from 1 January 2013 to 31 December 2016, Member States shall publish the number of free                                 aviation allowances allocated to each aircraft operator by 1 August 2014.                           

3.By way of derogation from Article 3d, Member States shall auction a number of aviation allowances reduced in proportion to                                    the reduction in the total number of allowances issued.                           

4.By way of derogation from Article 3d(3), the number of allowances to be auctioned by each Member State in respect of the period                                    from 1 January 2013 to 31 December 2016 shall be reduced to correspond to its share of attributed aviation emissions from                                    flights which are not subject to the derogations provided for in points (a) and (b) of paragraph 1 of this Article.                           

5.By way of derogation from Article 3g, aircraft operators shall not be required to submit monitoring plans setting out measures                                    to monitor and report emissions in respect of flights which are subject to the derogations provided for in points (a) and                                    (b) of paragraph 1 of this Article.                           

6.By way of derogation from Articles 3g, 12, 15 and 18a, where an aircraft operator has total annual emissions lower than 25                                    000 tonnes CO2, its emissions shall be considered to be verified emissions if determined by using the small emitters tool approved under                                    Commission Regulation (EU) No 606/2010(5) and populated by Eurocontrol with data from its ETS support facility. Member States may implement simplified procedures for                                    non-commercial aircraft operators as long as such procedures provide no less accuracy than the small emitters tool provides.                           

7.For the purposes of this Article, flights between aerodromes located in States of the EEA and countries that acceded to the                                    Union in 2013 shall be considered to be flights between aerodromes located in States of the EEA.                           

8.The Commission shall regularly, and at least once a year, inform the European Parliament and the Council of the progress of                                    the International Civil Aviation Organization (ICAO) negotiations as well as of its efforts to promote the international acceptance                                    of market-based mechanisms among third countries. Following the 2016 ICAO Assembly, the Commission shall report to the European                                    Parliament and to the Council on actions to implement an international agreement on a global market-based measure from 2020,                                    that will reduce greenhouse gas emissions from aviation in a non-discriminatory manner, including on information, with regard                                    to the use of revenues, submitted by Member States in accordance with Article 17 of Regulation (EU) No 525/2013.                           

In its report, the Commission shall consider, and, if appropriate, include proposals in reaction to, those developments on                                 the appropriate scope for coverage of emissions from activity to and from aerodromes located in countries outside the EEA                                 from 1 January 2017 onwards. In its report, the Commission shall also consider solutions to other issues that may arise in                                 the application of paragraphs 1 to 4 of this Article, while preserving the equal treatment of all aircraft operators on the                                 same route.’                           

In Annex I, in the column ‘Activities’ of the table therein, under the heading ‘Aviation’ the following point is added after                              point (j):                           

from 1 January 2013 to 31 December 2020, flights which, but for this point, would fall within this activity, performed by                                          a non-commercial aircraft operator operating flights with total annual emissions lower than 1 000 tonnes per year.’.                                    

# Article 2U.K.

This Regulation shall enter into force on the date of its publication in the *Official Journal of the European Union*.                  

It shall apply from 30 April 2014.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Strasbourg, 16 April 2014.

*For the European Parliament*                            

*The President*                            

M. Schulz                            

*For the Council*                            

*The President*                            

D. Kourkoulas                            

1

Opinion adopted on 22 January 2014 (not yet published in the Official Journal).

2

Position of the European Parliament of 3 April 2014 (not yet published in the Official Journal) and Decision of the Council                              of 14 April 2014.                           

3

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse                              gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).                           

4

Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and                              reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change                              and repealing Decision No 280/2004/EC (OJ L 165, 18.6.2013, p. 13).                           

5

Commission Regulation (EU) No 606/2010 of 9 July 2010 on the approval of a simplified tool developed by the European organisation                              for air safety navigation (Eurocontrol) to estimate the fuel consumption of certain small emitting aircraft operators (OJ L 175, 10.7.2010, p. 25).’