Communication from the Commission to the European Parliament pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community
Date: 2008-04-22
Institutions: European Commission
Subjects: EU environmental policy, air transport, civil aviation, climate change, environmental impact, greenhouse gas, reduction of gas emissions, tradeable emission permit

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.4.2008 
COM(2008) 221 final 

2006/0304 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive of the European 
Parliament and of the Council amending Directive 2003/87/EC so as to include aviation 
activities in the scheme for greenhouse gas emission allowance trading within the 
Community 

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2006/0304 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive of the European 
Parliament and of the Council amending Directive 2003/87/EC so as to include aviation 
activities in the scheme for greenhouse gas emission allowance trading within the 
Community 

(Text with relevance for the EEA) 

1. 

BACKGROUND 

Date of transmission of the proposal to the EP and the Council 
(document COM(2006)818 final – 2006/0304COD): 

20 December 2006 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

31 May 2007 

Date of the opinion of the Committee of the Regions: 

10 October 2007 

Date of the opinion of the European Parliament, first reading 

13 November 2007 

Date of adoption of the common position (by unanimity): 

18 April 2008 

2. 

OBJECTIVE OF THE COMMISSION PROPOSAL 

The  aim  of  the  proposal  is  to  address  the  growing  climate  change  impact  attributable  to 
aviation  by  including  aviation  in  the  Community  emissions  trading  scheme.  It  is  part  of  a 
comprehensive  approach  to  reducing  the  climate  change  impact  of  aviation  as  set  out  in 
document COM (2005)459 final of 27 September 2005. 

3. 

3.1 

COMMENTS ON THE COMMON POSITION 

General comments 

The  European  Parliament  gave  its  opinion  at  first  reading  on  13  November  2007.  The 
Commission accepted in full, in part or in principle 22 of the 59 amendments adopted by the 
European Parliament in its first reading. Eleven of these 22 amendments are already reflected, 
at least in part, in the common position. 

The  Commission  accepted  amendments,  either  fully  or  in  principle  or  in  part,  which  would 
clarify  the  context  of  the  proposal  and  do  not  detract  from  the  general  aim  of  the  proposal. 
These include modifications to the categories of special types of flights which are excluded 
from the scheme. 

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The Commission rejected amendments which would alter the nature of the proposal, such as 
amendments that would limit the ability of the aviation sector to buy allowances from other 
sectors included in the EU Emissions Trading Scheme. It also rejected amendments that are 
technically unfeasible or needlessly burdensome from an administrative viewpoint. 

The Commission considers that the common position does not alter the approach or aims of 
the proposal and can thus support it as it stands. 

3.2. 

Detailed comments 

3.2.1.  Parliamentary amendments accepted by the Commission and incorporated in full, in 

part or in principle in the common position 

Amendments 14, 76, 30, 40, 47, 49, 51, 52, and 53 have been incorporated, with a slightly 
different  wording,  in  the  common  position.  Amendment  30  is  a  useful  clarification  and 
consistent  with  Article  18  of  the  Directive  and  has  been  fully  incorporated  in  the  Council's 
common position. Amendments 76 and 14 concern the use of auctioning and are included to 
the extent that they make express reference to the use of revenues from auctioning to tackle 
climate change in the EU and in third countries and to the extent that such measures could be 
used  to  encourage  environmentally-friendly  transport.  Amendment  40  is  acceptable  as  it 
would ensure that the provisions regarding the use of CERs/ERUs by aircraft operators will 
be  consistent  with  those  applied  to  other  sectors  from  2013.  Amendment  47  has  been 
incorporated to the extent that it would provide for the deletion of the conversion mechanism 
contained in the Commission's proposal. Amendment 49 aims to send a signal that the EU is 
ready to engage with the rest of the world to find agreement on tackling aviation emissions 
and  to  adapt  its  scheme  to  the  rules  of  a  common  scheme  agreed  with  third  countries.  The 
spirit of this amendment is reflected in the common position. Amendment 51 is incorporated 
in the common position to the extent that it would require State flights by EU Heads of State 
to be included in the scheme. Amendments 52 and 53 are included, as the common position 
provides  for  the  exclusion  of  search  and  rescue,  fire-fighting,  humanitarian  and  emergency 
medical  service  flights.  Amendments  70  and  79  have  been  included  to  the  extent  that  the 
common  position  excluded  flights  for  checking,  testing  or  certifying  aircraft  or  equipment 
whether airborne or ground-based.  

3.2.2.  Parliamentary amendments rejected by the Commission but incorporated in full, in 

part or in principle in the common position 

Five amendments which were rejected by the Commission have been incorporated in full, in 
part or in principle in the common position.  

Amendment  13  was  accepted  to  the  extent  that  the  Council's  common  position  includes  a 
reference  to  the  20  percent  target  in  the  recitals.  The  Commission  agrees  that  the  aviation 
sector  must  contribute  to  achieving  the  overall  EU  emissions  reduction  target  of  20  to  30 
percent compared to 1990 levels.  

The spirit of amendments 22, 28 and 33, which relate to the need for a new entrant reserve for 
the aviation sector, has been incorporated into the common position through the inclusion of a 
new  Article  3f  which  provides  for  a  special  reserve  for  new  aircraft  operators  and  aircraft 
operators which experience significant growth.  

Amendment 78 is included in the common position to the extent that it would provide for all 
flights to or from EU airports to be included in the scheme from the outset rather than a staged 
approached as provided for in the Commission's proposal.  

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3.2.3.  Parliamentary  amendments  accepted  in  full,  in  part  or  in  principle  by  the 

Commission but not incorporated in the common position 

Amendments 1, 3, 4, 5, 7, 8, 10, 35, 45, 17 and 65 were accepted in part or in principle by the 
Commission, but not incorporated. They predominantly concern minor changes in the recitals.  

3.2.4.  Parliamentary  amendments  rejected  by  the  Commission  and  the  Council  and  not 

incorporated in the common position 

Those Parliamentary amendments dealing in particular with definitions in the proposal, a limit 
on  the  use  by  aircraft  operators  of  allowances  from  other  sectors,  a  multiplier  to  take  into 
account  non-CO2  impacts  of  aviation  and  the  weight  threshold  for  exemption  from  the 
scheme were not acceptable to the Commission or the Council and are not incorporated in the 
common position. 

3.2.5.  Changes made by the Council to the Proposal 

The Council proposed the following main changes to the Commission proposal: 

Start  date:  The  Council's  common  position  provides  for  all  flights  to  be  included  in  the 
scheme  from  2012.  It  therefore  removes  the  provision  in  the  Commission's  proposal  for 
flights between EU airports to be included in 2011. Whilst the Commission would prefer its 
original proposal for a staged approach, it can accept a one-stage approach. The Commission 
would  like  the  scheme  to  start  as  soon  as  possible.  However,  given  the  likely  time  still 
required for the  legislation  to  be  finally agreed and for implementing measures to be put in 
place, and the fact that all flights would be included on the same date, 2012 is acceptable to 
the Commission.  

Auctioning  revenues:  The  Commission's  proposal  provided  that  the  revenues  from  the 
auctioning of allowances shall be used for mitigation of and adaptation to climate change and 
to  cover  the  costs  of  administering  the  scheme.  The  Commission  regrets  that  the  common 
position weakens this wording to state only that revenues from auctioning should be used for 
these purposes.  

Review of caps: The common position includes provision for the Commission to review the 
functioning  of  the  Directive  in  relation  to  aviation  activities  by  1  June  2015.  This  includes 
consideration of the extent to which the total quantity of allowances to be allocated to aircraft 
operators should be reduced in line with overall emissions reduction targets. The Commission 
agrees that such a review is appropriate.  

Interaction  with  third  country  measures:  The Commission's proposal  provides for flights 
arriving from third countries to be exempt if they are covered by equivalent measures in those 
countries.  The  Council's  common  position  provides  for  a  more  flexible  approach  to  finding 
the best option to ensure interaction between the Community scheme and measures taken in a 
third country. The Commission supports this approach.  

Level  of  auctioning:  The  Commission  proposed  that,  in  the  period  prior  to  2013,  the 
percentage of allowances to be auctioned in the aviation sector should be the average of the 
percentages  proposed  by  the  Member  States  that  include  auctioning  in  their  national 
allocation plans. Based on the current information available to the Commission on plans for 
auctions,  the  weighted  average  would  be  around  7-8%.  The  Commission  still  considers  its 
original  proposal  to  be  the  best  option.  However,  the  10  per  cent  figure  included  in  the 
Council's  common  position  is  acceptable  to  the  Commission  because  it  does  not  lead  in 
practice to undue differences in treatment in auctioning between aviation and other sectors of 
the economy.  

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The  Commission's  proposal  provided  for  the  levels  of  auctioning  for  future  periods  to  take 
into account the general review of the Directive 2003/87/EC. The Council's common position 
provides that for future periods the share of auctioning may be increased as part of the general 
review  of  Directive  2003/87/EC.  This  is  acceptable  to  the  Commission.  The  Commission's 
proposal for a Directive of the European Parliament and of the Council amending Directive 
2003/87/EC  so  as  to  improve  and  extend  the  greenhouse  gas  emission  allowance  trading 
system of the Community (COM(2008) 16 final) provides that "aviation should be treated as 
other industries which receive transitional free allocation rather than as electricity generators. 
This means that 80% of allowances should be allocated for free in 2013 and thereafter the free 
allocation  to  aviation  should  decrease  each  year  by  equal  amounts,  resulting  in  no  free 
allocation in 2020."  

Adjustments  to  the  benchmarking  provisions:  The  common  position  adjusts  payload  and 
the distance used to calculate the tonne-kilometres performed by each aircraft operator which 
are the basis for the benchmark used to distribute free allowances. The default mass for each 
passenger  and  his  checked  baggage  is  increased  to  110kg  and  95km  is  added  to  the  great 
circle distance. The  Commission regrets that the Council has  not adopted  the  benchmark as 
proposed but in order to reach an agreement can accept this approach.  

Monitoring  and  reporting  plans:  The  common  position  introduces  an  additional 
requirement  for  Member  States  to  ensure  that  aircraft  operators  to  submit  monitoring  plans 
setting  out  measures  to  monitor  and  report  emissions  and  tonne-kilometre  data.  The 
Commission considers that this additional requirement will be useful to ensure that all aircraft 
operators are aware of the monitoring requirements which apply to them under the scheme.  

Special  reserve:  The  Council's  common  position  contains  a  new  Article  providing  for  a 
special reserve to be created for new aircraft operators and operators which experience strong 
growth  (of  more  than  18%  annually  in  the  years  following  the  base  year  used  to  allocate 
allowances to aircraft operators). The new Article provides for 3% of allowances to be placed 
in the reserve and for a one-off distribution of the allowances based on the same benchmark 
system  as  is  proposed  for  the  initial  allocation  of  allowances.  Although  the  Commission 
would  prefer  not  to  make  any  specific  provision  for  new  entrants,  it  can  accept  the  new 
Article as it contains sufficient safeguards to ensure that its effect is limited and that it does 
not undermine the allocation methodology set out in the Commission's proposal.  

Conversion  of  aviation  allowances:  As  international  aviation  emissions  are  not  integrated 
into  Member  States'  commitments  under  the  Kyoto  Protocol,  allowances  allocated  to  the 
aviation  sector  may  only  be  used  for  compliance  by  aircraft  operators.  This  is  necessary  in 
order to maintain the integrity of the accounting system which provides for allowances to be 
attached  to  AAU's  in  the  2008-12  period.  However,  the  Commission's  proposal  included  a 
provision  which  would  have  enabled  aircraft  operators  to  convert  their  allowances  into 
allowances which could be used by other operators. The common position would delete this 
provision. Whilst the Commission would prefer to include a provision for the conversion of 
allowances, the deletion of this provision was considered acceptable in order to facilitate an 
agreement.  

Enforcement provisions: The Council proposed additional enforcement measures to ensure 
that where an operator fails to comply with the obligations under the scheme and enforcement 
measures employed by the Member State have been exhausted, the Member State may request 
the Commission to decide on the imposition of an operating ban at Community level on the 
aircraft operator. Enforcement measures are essential to ensure that the scheme is effective in 
reducing  the  climate  change  impact  of  aviation.  The  additional  Article  strengthens  the 
enforcement mechanisms under the scheme and is a further disincentive to non-compliance. 

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Therefore, the Commission agrees with the inclusion of the additional provisions. 

De minimis exemption: The common position contains several changes to the exclusions in 
the  proposal.  The  most  significant  is  the  inclusion  of  a  de  minimis  exclusion  which  would 
exclude commercial operators operating less than 243 flights per period for three consecutive 
four-month periods. The Commission supports a de minimis exclusion which would exclude 
infrequent flyers to the EU and which, in particular, has the potential to help those developing 
country airlines with the weakest links to the EU.  

4. 

CONCLUSION 

The  changes  introduced  by  the  Council  are  acceptable  to  the  Commission  as  they  are 
consistent with the objective of reducing the climate change emissions of aviation and build 
upon the Commission's proposal. Therefore the Commission can accept the common position. 

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