CELEX: 
Language: en
Date: 2020-05-18 00:00:00
Title: COMMISSION DELEGATED DECISION (EU) …/… amending Directive 2003/87/EC of the European Parliament and of the Council, as regards the exclusion of incoming flights from Switzerland from the EU emissions trading system

EUROPEAN
                          COMMISSION
                                                   Brussels, 18.5.2020
                                                   C(2020) 3107 final
                COMMISSION DELEGATED DECISION (EU) …/…
                                       of 18.5.2020
   amending Directive 2003/87/EC of the European Parliament and of the Council, as
   regards the exclusion of incoming flights from Switzerland from the EU emissions
                                     trading system
                                (Text with EEA relevance)
EN                                                                                  EN
 ---pagebreak---                                      EXPLANATORY MEMORANDUM
   1.         CONTEXT OF THE DELEGATED ACT
   The EU emissions trading system (ETS) covers departing flights from aerodromes in the
   European Economic Area (EEA), as well as incoming flights from third countries subject to
   Article 25a of Directive 2003/87/EC. Article 25a confers implementing powers on the
   Commission to provide for flights to be excluded from the aviation activities listed in Annex I
   so as to provide for optimal interaction between the Union system and third countries'
   measures for reducing the climate change impact of flights. While the expectation in 2008
   was that third country measures should be equivalent1, later amendments to Directive
   2003/87/EC did not repeat this level of expectation2, and the scope of the EU ETS is currently
   limited to intra-EEA flights until the end of 2023 except where a linking Agreement is in
   place3.
   Directive 2003/87/EC applies irrespective of the nationality of the airline operator and in
   principle covers flights, which depart from or arrive in an aerodrome situated in the territory
   of a Member State. The equal treatment of aircraft operators on routes is vital to avoid
   distortions of competition. An Agreement between the European Union and Switzerland on
   the linking of their greenhouse gas emissions trading systems was reached during the 21st
   Conference of the Parties to the UN Framework Convention on Climate Change in December
   2015 and signed on 23 November 2017.4 This linking Agreement maintains the equal
   treatment of aircraft operators on routes, with the EU regulating departing flights to
   Switzerland, and Switzerland being responsible for flights from Switzerland to the EEA5.
   In line with the linking Agreement, this Decision exempts flights from aerodromes in
   Switzerland to aerodromes in the EEA from the EU ETS. It applies from the entry into force
   of the linking Agreement.
   In terms of environmental effects, the additional carbon dioxide (CO2) emissions from
   aviation covered by carbon pricing through the linking of the EU ETS and the Swiss ETS are
   initially considered to amount to around 3.2 million tonnes, split equally between arriving and
   departing flights. In respect of the 1.6 million tonnes CO2 from flights from the EEA to
   aerodromes in Switzerland, the level of free allocation in 2020 will be around 550 000, and
   this will decrease by 2.2% per year from 2021. There will be additional auctioning of 100 000
   allowances. Therefore, it is expected that 950 000 tonnes of additional emissions will be
   offset from the other sectors covered by the emissions trading systems in respect of flights
   from the EEA to aerodromes in Switzerland.6
   1
            The word ‘equivalent’ is not included in the operative text of Directive 2003/87/EC, but is included in
            recital 17 to Directive 2008/101/EC.
   2
            See, for example, recital 6 to Regulation No 421/2014 of the European Parliament and of the Council of
            16 April 2014.
   3
            Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017
            amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to
            prepare to implement a global market-based measure from 2021, OJ L 350, 29.12.2017, p. 7.
   4
            Agreement between the European Union and the Swiss Confederation on the linking of their
            greenhouse gas emissions trading systems, OJ L 322, 7.12.2017, p. 3–26
   5
            This approach has been noted as a practical way to solve the issue of Common but Differentiated
            Responsibilities and Capabilities, which has been a longstanding challenge in the UNFCCC context.
            See, for example, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1952554.
   6
            In respect of 2020, 1.5% of these emissions may be covered by credits from the UNFCCC’s Clean
            Development Mechanism.
EN                                                         1                                                        EN
 ---pagebreak---    The second step in operationalising this link is that free allocations, and the related levels of
   auctioning of allowances, are scaled in accordance with the scope of the EU ETS pursuant to
   Regulation (EU) 2017/23927. The Commission Decision 2011/638/EU8 on benchmarks for
   free allocation to aircraft operators explicitly foresaw changes to allocations where acts were
   adopted pursuant to Article 25a of Directive 2003/87/EC.
   The third step, set out in Annex I, Part B to the linking Agreement, is to establish a form of
   ‘one-stop shop’ for aircraft operators. Without changing underlying legal responsibilities in
   either system, this means that, in practice, aircraft operators with the closest links to
   Switzerland should be administered by Switzerland for their emissions in both systems.
   Aircraft operators with closer links to EEA countries will continue to be regulated solely by
   their existing administrative Member State. They will therefore also report their emissions
   from activities under both systems, and surrender corresponding allowances. Under the
   linking Agreement, each Party remains responsible for enforcing its own emissions trading
   system and geographical scope (sections on ‘Legal Enforcement’ and ‘Administrative
   attribution of aircraft operators’ in Annex I Part B).
   Annex I to the EU ETS Directive is amended to change its scope of application in respect of
   incoming flights from Switzerland. A ‘one stop shop’ is foreseen as an administrative
   convenience in respect of the aircraft operators that have closer links to Switzerland and vice
   versa. If enforcement proceedings were ever necessary, Switzerland would act first for aircraft
   operators administered by Switzerland, and the EU administering State would act first for all
   other cases. There will be sharing of information between the Parties to ensure that there is
   smooth and effective application in practice. The aircraft operators administered by
   Switzerland are indicated by Regulation (EC) No 748/2009 on the list of aircraft operators,
   which performed an aviation activity listed in Annex I to Directive 2003/87/EC on or after 1
   January 2006 specifying the administering Member State for each aircraft operator.
   The fourth step in facilitating the linking process relates to the allocation of free allowances.
   If the linking Agreement were ever to be suspended or terminated, each aircraft operator
   would be responsible for complying in the emissions trading systems individually, using the
   allowances that they have been allocated as well as those from the market. It is therefore
   appropriate that the EU should be responsible for transferring allowances allocated for free to
   the aircraft operators administered by Switzerland, in respect of their intra-EEA flight
   activities and flights departing from the EEA to Switzerland. At the same time as free
   allowances for other departing flights from the EEA are transferred to aircraft operators, free
   allocations relating to flights from the EEA to Switzerland should also be transferred. The
   corollary is that Switzerland would be responsible for sending quantities of allowances to EU
   administered aircraft operators in respect of their flight activities covered by the Swiss ETS,
   which will mirror the coverage of the EU ETS.
   This fourth step is put into effect through Commission Regulation (EU) No 389/2013 9, the
   “Registry Regulation”, the relevant Articles of which state:
                                                    “Article 71
                                   Implementation of linking arrangements
   7
            See Article 28a of Directive 2003/87/EC as amended by Regulation (EU) 2017/2392.
   8
            Commission Decision 2011/638/EU of 26 September 2011
   9
            Commission Regulation (EU) No 389/2013 of 2 May 2013 establishing a Union Registry pursuant to
   Directive 2003/87/EC of the European Parliament and of the Council.
EN                                                       2                                                 EN
 ---pagebreak---    The central administrator may create accounts and processes and undertake transactions and
   other operations at appropriate times to implement agreements and arrangements made
   pursuant to Articles 25 and 25a of Directive 2003/87/EC.”
   Commission Regulation (EU) No 389/2013 provides for transfers of allowances to/from
   Switzerland using the Union Registry through Article 56:
                                              “Article 56
                                Free allocation of aviation allowances
   4.      Where an agreement pursuant to Article 25 of Directive 2003/87/EC is in force and
   requires transferring aviation allowances to aircraft operators holding accounts in the registry
   of another greenhouse gas emissions trading system, the central administrator, in cooperation
   with the administrator of the other registry, shall ensure that the Union Registry transfers
   those aviation allowances from the EU Aviation Allocation Account to the corresponding
   accounts in the other registry.
   5.      Where an agreement pursuant to Article 25 of Directive 2003/87/EC is in force and
   requires transferring aviation allowances corresponding to another greenhouse gas emissions
   trading system to aircraft operators holding accounts in the Union Registry, the central
   administrator, in cooperation with the administrator of the other registry, shall ensure that the
   Union Registry transfers those aviation allowances from the corresponding accounts of the
   other registry to the aircraft operator holding accounts in the Union Registry, upon approval
   by the competent authority responsible for the administration of the other greenhouse gas
   emissions trading system.”
   While this delegated decision exempts all incoming flights from aerodromes situated in
   Switzerland from the EU ETS from 2020, it does not mean that such flights will not be
   regulated in consequence of amendments made to the EU ETS regarding implementation of
   ICAO’s global MBM scheme, CORSIA. A report will be presented to the European
   Parliament and to the Council pursuant to Article 28b of the EU ETS Directive. In that report,
   flights between the European Union and countries with linked emissions trading systems will
   be examined.
   2.        CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT
   A meeting took place on 22 November 2019 in the context of the Climate Change Expert
   Group, involving representatives of Member States. Furthermore, online feedback on the text
   of the delegated decision was collected on the Better Regulation portal for four weeks
   between 2 March and 30 March 2020. Following adoption, the delegated decision will be
   subject to scrutiny from the European Parliament and the Council for a period of two months.
   3.        LEGAL ELEMENTS OF THE DELEGATED ACT
   A Decision is considered to be the appropriate instrument, and the Article 25a delegated
   decision does the following:
   Article 1
   This Article amends Annex I to the EU ETS Directive, so as to exempt aircraft operators from
   the obligation to surrender allowances for incoming flights from aerodromes in Switzerland to
   aerodromes in the EEA. In line with Regulation (EU) 2017/2392, allowances are not issued
   for these incoming flights.
EN                                                 3                                                 EN
 ---pagebreak---    The Article maintains stability as regards the coverage of aircraft operators from the EU ETS,
   by clarifying that the provisions containing thresholds for inclusion remain unaffected by the
   exclusion of incoming flights from Switzerland from the scope of the EU ETS.
EN                                                 4                                              EN
 ---pagebreak---                        COMMISSION DELEGATED DECISION (EU) …/…
                                               of 18.5.2020
       amending Directive 2003/87/EC of the European Parliament and of the Council, as
       regards the exclusion of incoming flights from Switzerland from the EU emissions
                                             trading system
                                        (Text with EEA relevance)
   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13
   October 2003 establishing a system for greenhouse gas emissions allowance trading within
   the Union and amending Council Directive 96/61/EC10, and in particular Article 25a(1)
   thereof,
   Whereas:
   (1)     Article 25a of Directive 2003/87/EC empowers the Commission to adopt provisions to
           exclude flights arriving from a third country from the EU emissions trading system
           (EU ETS). Such provisions should provide for optimal interaction between the EU
           ETS and a third country's measures for reducing the climate change impact of aviation.
   (2)     Agreement between the European Union and the Swiss Confederation on the linking
           of their greenhouse gas emissions trading systems11 (the ‘Agreement’) was signed on
           23 November 2017 and entered into force on 1 January 2020. The Agreement provides
           that flights from aerodromes situated in the territory of Switzerland to aerodromes
           situated in the European Economic Area (EEA) are to be excluded from the EU ETS.
   (3)     Directive 2003/87/EC should therefore be amended in order to exclude flights from
           aerodromes situated in Switzerland to aerodromes situated in the EEA from the EU
           ETS. In order to maintain stability as regards the coverage of operators, that exclusion
           should not affect the provisions that exclude certain aviation activities from the EU
           ETS based on specified thresholds in terms of number of flights or emissions per
           operator.
   (4)     Directive 2003/87/EC should therefore be amended accordingly.
   (5)     As the Agreement entered into force on 1 January 2020, this Decision should apply
           from that date,
   HAS ADOPTED THIS DECISION:
                                                 Article 1
   The second paragraph of the entry ‘Aviation’ of column ‘Activities’ of the table of Annex I to
   Directive 2003/87/EC is amended as follows:
   10
           OJ L 275, 25.10.2003, p. 32.
   11
           OJ L 322, 7.12.2017, p. 3.
EN                                                   5                                              EN
 ---pagebreak---    (1)       the second paragraph of point (j) is replaced by the following:
             ‘Flights referred to in point (l) or performed exclusively for the transport, on official
             mission, of a reigning Monarch and his immediate family; Heads of State, Heads of
             Government and Government Ministers, of a Member State may not be excluded
             under this point;’
   (2)       point (k) is replaced by the following:
             ‘(k) from 1 January 2013 to 31 December 2030, 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
             (including emissions from flights referred to in point (l));’;
   (3)       the following point (l) is added:
             ‘(l) flights from aerodromes situated in Switzerland to aerodromes situated in the
             EEA.’.
                                                  Article 2
   This Decision shall enter into force on the day following that of its publication in the Official
   Journal of the European Union.
   It shall apply from 1 January 2020.
   Done at Brussels, 18.5.2020
                                                   For the Commission
                                                   The President
                                                   Ursula VON DER LEYEN
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