amending Directive 2003/87/EC as regards the notification of offsetting in respect of a global market-based measure for aircraft operators based in the Union

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

This proposal introduces an amendment to aviation rules in the Emissions Trading System of the European Union (EU ETS) to implement Member States’ notification to EU-based airlines of the offsetting for the year 2021 under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) of the International Civil Aviation Organisation (ICAO).

The objective is to implement this notification in a manner that minimises the administrative burden of national authorities and airline operators, and provides legal certainty as regards CORSIA offsetting by airlines based in Member States.

ICAO’s CORSIA is an offsetting mechanism where countries should have airlines based in those countries offset CO2 emissions that exceed the relevant baseline by international credits. Due to the COVID-19 pandemic, the ICAO Council decided in June 2020 that 2019 emissions should be used as baseline in 2021-2023 instead of the average of 2019-2020 emissions. The CORSIA review in 2022 will examine the impact of COVID-19 on CORSIA on various issues.

Subject to the differences notified in 2018 and the manner in which the European Parliament and Council amend Union legislation, the EU intends to implement CORSIA. Therefore, EU-based airlines should surrender credits if relevant to comply with CORSIA offsetting in respect of their 2021 emissions. As foreseen in the CORSIA standards and recommended practices, EU Member States should calculate and inform airlines of their offsetting in respect of 2021 emissions by 30 November 2022; thereafter, those airlines should cancel the according number of credits by 31 January 2025.

Due to the COVID-19 pandemic, aviation ETS CO2 emissions decreased in 2020 by 64% compared to 2019. In November 2020, the European Organisation for the Safety of Air Navigation (Eurocontrol) published its forecast for the recovery of the European aviation sector for the years 2020-2024. It describes the impact of the COVID-19 pandemic on air traffic. According to the forecast, even in the most optimistic scenario, the 2019 emission levels would not be reached before 2024, whereas the worst-case scenario predicts such recovery by 2029.

While estimates do not foresee any actual CORSIA offsetting requirements during the period 2021-2023, there should nonetheless be a legal obligation in Union law for Member States to notify the offsetting figures to EU-based airlines by 30 November 2022 in respect of emissions during 2021. Based on the above factual evidence about 2020 and the first half of 2021, the likelihood for any actual CORSIA offsetting requirements materialising in respect of 2021 is minimal, and is also very low in respect of 2022. Therefore, this proposal foresees that once it is clear what the additional offsetting figure in respect of the year 2021 is, most likely: zero, Member States shall, during the course of 2022, communicate this to airlines. This proposal should be adopted by Council and the European Parliament once the emissions data for 2021 will be known, that is after 1 January 2022.

The same approach will be taken in respect of subsequent years in the event that the relevant ‘Fit for 55’ proposals are not yet adopted.

EU-based airlines’ ETS obligations remain in force as in Union law pursuant to Directive 2003/87/EC. These obligations include the obligation to monitor and report their emissions, including those relating to flights between the EEA and third countries.

•Consistency with existing policy provisions in the policy area

Revision of aviation ETS rules is an integral part of EU’s “Fit for 55” package. The revision includes implementation of CORSIA through the EU ETS Directive.

This proposal is the only CORSIA-related amendment that should be in place by 30 November 2022, so that the notification of zero additional offsetting can take place by that date. Other amendments related to CORSIA implementation include provisions regarding the use of international credits for extra-EEA flights; surrender obligations for extra-EEA flights; treatment of non-EU-based airlines for extra-European flights; treatment of EU-based airlines on routes where CORSIA is not applied in the same way; and Directive’s coverage to flights of EU airlines between two third countries. These other amendments related to CORSIA implementation are included in a wider proposal for a Directive to amend Directive 2003/87/EC as regards aviation's contribution to the Union’s economy-wide emission reduction target and appropriately implementing a global market-based measure.

•Consistency with other Union policies

This very specific proposal does not raise any issue of consistency with other Union policies.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis