EXPLANATORY MEMORANDUM

1.CONTEXT OF THE DELEGATED ACT

The Union emissions trading system (EU 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 equivalent 1 , later amendments to Directive 2003/87/EC did not repeat this level of expectation 2 , and the scope of the EU ETS is currently limited to intra-EEA flights until the end of 2023 except where an agreement is in place 3 .

An agreement was reached between the European Union and the United Kingdom of Great Britain and Northern Ireland in December 2020 (the ‘Agreement’) 4 , which specifies that the scope of the Union system of carbon pricing shall cover departing flights from the European Economic Area to the United Kingdom 5 . In addition, in December 2020, the EU submitted an updated Nationally Determined Commitment under the Paris Agreement for an economy-wide emissions reduction of at least 55% below 1990 levels by the year 2030 6 . Civil aviation is included in that commitment, calculated including emissions from outgoing flights that start in the EU, which is consistent with the continued regulation of departing flights and with the exemption of incoming flights provided for by this Regulation. 

Directive 2003/87/EC applies irrespective of the nationality of the airline operator and in principle - subject to Article 28a(1) as regards ‘emissions from flights to and from aerodromes located in countries outside the EEA’ up to 31 December 2023, subject to Article 28a(7) and the review referred to in Article 28b - 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. The Agreement between the European Union and the United Kingdom maintains the equal treatment of aircraft operators on routes, with the EU regulating departing flights to the United Kingdom 7 , and the United Kingdom being responsible in its carbon pricing system for flights from the United Kingdom to the EEA 8 .

In line with the Agreement, this Regulation exempts flights from aerodromes in the United Kingdom to aerodromes in the EEA from the EU ETS.

The same approach was taken when an agreement between the European Union and Switzerland on the linking of their greenhouse gas emissions trading systems was reached in December 2015 and signed on 23 November 2017 9 (the ‘Swiss Linking Agreement’). The Swiss 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 EEA. In line with the Swiss Linking Agreement, a Delegated Act has been adopted by the Commission, as regards the exemption from the EU ETS of incoming flights from Switzerland, as from 1 January 2020 10 . 

In terms of environmental effects, the additional carbon dioxide (CO2) emissions from aviation covered by carbon pricing through the inclusion of EEA – UK flights are considered to amount to around 17.5 million tonnes based on 2019 levels, split equally between arriving and departing flights.

Annex I to Directive 2003/87/EC is amended to change its scope of application in respect of incoming flights from the United Kingdom.

2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT

A meeting took place on 12 March 2021 in the context of the Climate Change Expert Group, involving representatives of Member States. Furthermore, online feedback on the text of the delegated regulation was collected on the Better Regulation portal for four weeks between 20 April and 18 May 2021. Following adoption, the delegated regulation 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 regulation is considered to be the appropriate instrument, and the Article 25a Delegated Regulation does the following:

Article 1

This Article amends Annex I to Directive 2003/87/EC, so as to exempt aircraft operators from the obligation to surrender allowances for incoming flights from aerodromes in the United Kingdom to aerodromes in the EEA. In line with Regulation (EU) 2017/2392, allowances are not issued for these incoming flights.

The Article maintains stability as regards the coverage of aircraft operators by the EU ETS, by clarifying that the provisions containing thresholds for inclusion remain unaffected by the exclusion of incoming flights from the United Kingdom from the scope of the EU ETS.

COMMISSION DELEGATED REGULATION (EU) …/...

of XXX

amending Directive 2003/87/EC of the European Parliament and of the Council as regards the exclusion of incoming flights from the United Kingdom from the Union 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/EC 11 , and in particular Article 25a(1), second subaragraph, 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 Union 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)An agreement between the Union and the United Kingdom of Great Britain and Northern Ireland (the ‘Agreement’) was reached in December 2020 12 . The Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part (‘the Agreement’) was signed by the Union on the basis of Council Decision (EU) 2020/2252 13 and is provisionally applied. The Agreement provides that each party is to have in place an effective system of carbon pricing that covers aviation and that flights from aerodromes situated in the territory of the European Economic Area (EEA) to aerodromes situated in the United Kingdom are to be regulated under the EU ETS. Pursuant to Article 28a(7) of Directive 2003/87/EC, the derogation in Article 28a(1) of Directive 2003/87/EC, pursuant to which Member States should consider the requirements of that Directive regarding emissions from certain flights to and from aerodromes located in countries outside the EEA satisfied, is to apply only in line with the terms of the Agreement.

(3)It is therefore necessary to amend Directive 2003/87/EC in order to exclude flights from aerodromes situated in the United Kingdom to aerodromes situated in the EEA from the EU ETS. In order to maintain stability as regards the coverage of aircraft operators by the EU ETS, that exclusion of flights from aerodromes situated in the United Kingdom to aerodromes situated in the EEA 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 is being provisionally applied from 1 January 2021, this Regulation should apply in respect of emissions taking place from that date,

HAS ADOPTED THIS REGULATION:

Article 1

In Directive 2003/87/EC, in Annex I, the second paragraph of the entry ‘Aviation’ of the column ‘Activities’ of the table is amended as follows:

(1) in point (j), the second paragraph is replaced by the following: 

‘Flights referred to in points (l) and (m) 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 points (l) and (m));’

(3)the following point (m) is added:

‘(m)    flights from aerodromes situated in the United Kingdom to aerodromes situated in the EEA.’.

Article 2

This Regulation 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 2021.

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

Done at Brussels,