Carbon complexities

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Business aviation faces huge costs and a difficult task of administering the European Union's emissions trading scheme - but the industry may have found a way to simplify the monitoring and verification process

European business aviation is pressing ahead with a move to better balance potentially huge and unnecessary costs of administering carbon trading.

The Lisbon Strategy, the European Union's own action plan designed to make it the most dynamic and competitive knowledge-based economy in the world, was never going to sit comfortably with the impact of carbon trading on aviation's more modest emitters.

At the heart of the 2000 blueprint was a commitment to Europe's smallest businesses to reduce additional administrative burdens coming from new EU regulations such as environmentally-targeted market-based measures.

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 ©Rex Features/Gareth Burgess

That is why the move by the European Commission to wrap business aviation into the EU Emissions Trading Scheme from 2012 has met with such keen resistance, with its champions claiming that a one-size-fits-all approach is tantamount to regulatory slaughter.

The complex monitoring, reporting and validation methodology being developed for some of the largest of the world's airlines is, they protest, intended for the big guns and therefore wholly inappropriate for the minimal emitters that form the ranks of the business aviation community.

SMALL BEER

It is small beer when you consider that a typical small business jet emits 1.4t of carbon dioxide per hour flown. Assuming each aircraft flies an average of 500h a year, this would generate annual emissions of 700t per aircraft. Most of those in the business operate only one aircraft relatively infrequently, generating no more than 1,400t of CO2 a year with 90% of operators likely to be monitored under the directive producing less than 2% of carbon emissions.

According to Eurocontrol data, there are more than 250 EU operators with only one aircraft while 80% have fewer than five. A further look at the data shows that there are more than 2,500 business aircraft registered in the 27 EU member states and operational in Europe, and that is not counting the legion of foreign-registered business aircraft based here.

Then there are the many more overseas-based aircraft that fly regularly into Europe - particularly from the USA, where there are more than 15,000 turbine-powered business aircraft, many of which will need to demonstrate some level of compliance within the scheme.

It is a bureaucratic nightmare for EU member states as they will have to supervise this small and diverse community. The UK estimates that it alone will be required to monitor at least 700 mainly offshore-based non-commercial operators, all with minimal carbon output.

If the scheme in its current form is applied to business aviation, it promises to be difficult and expensive to manage by all the stakeholders in the carbon chain: member states, the environment czars at the European Commission as well as owners and operators.

For Brian Humphries, president and chief executive of the European Business Aviation Association (EBAA), the small matter of gauging the administrative burden on his membership is what keeps him awake at night. You have only to do the arithmetic, he says, to know that the great majority of business aircraft operators will be hard hit by these measures.

CUSTOMER DEMAND

Consider the complexity involved: operators may be allocated to one member state one year and to another the next because they do not operate to a schedule and respond only to customer demand, which necessarily varies by destination and frequency.

Secondly, each member state will have to create an account for each operator even if they only have one aircraft and fly in only once or twice a year. Thirdly, each operator and member state will have to ensure that the emission data received has been properly verified.

Humphries says the complexity of this task will almost certainly mean that the administrative cost could exceed many times the actual value of carbon credits that will have to be surrendered by each operator to offset their CO2 emissions and will, inevitably, result in large administrative fees charged by member states.

That is just the fees. Someone within the business will also have to manage the huge amount of paperwork involved. It has been estimated that if an operator of one aircraft or a fleet of less than five aircraft had to comply with all the requirements outlined in the monitoring, reporting and validation proposals as they stand, each one would have to employ an extra staff member to complete the work.

On top of that cost must be added the further charges for the verification process, which according to UK consultancy Entec, which formulated the draft rules, may lie anywhere between a minimum of €2,700 ($3,550) and a maximum of €9,000 per operator.

The EBAA has two proposals. One is a simplified monitoring and verification method for small emitters based on Eurocontrol data that has been independently verified. It thinks this is a more efficient and appropriate basis for the business aviation sector.

The first option proposes that business aviation monitoring be based on the Eurocontrol route charge tracking system, within which all charges for an instrument flight rules flight plan are calculated.

These records have 99.8% accuracy on all flights including those of business aviation. And, because they have delivered a similar level for charge recoveries, the EBAA believes this provides an excellent level of operator identification and tracking.

Data generated in this way could satisfy the dual needs of providing evidence of actual flight hours and their accurate verification, requiring the Eurocontrol system to be simply signed off to allow data verified by default.

The second proposal is similar to the first, except that only the flight time and/or distance flown would be provided by Eurocontrol and the resulting CO2 emission data would be calculated using industry standard data prepared independently of the manufacturers to reflect "real world" rather than brochure fuel consumption.

This data generated by the likes of aviation consultancy Conklin & de Decker would consider each aircraft and associated engine and the resultant CO2 emissions per hour flown and combined with the values from Eurocontrol on a per flight basis. As in the first option, verification would be required only once and all subsequent data from this source could be deemed as verified by default.

The EBAA is therefore working with Eurocontrol and the European Commission to validate the Eurocontrol Pagoda model and determine its suitability under either of the two options to meet the monitoring, reporting and validation needs of small emitters.

In an act of conciliation, the EC has agreed it would be helpful to run a mini-case study with one or more midsize business aviation operators to demonstrate the costs of implementing the complex monitoring and verification.

In conjunction with Eurocontrol, and with the support of two business aircraft operators, the EBAA has therefore initiated a trial whereby the flight data of the subject aircraft will be derived using the Pagoda model. The derived data will then be compared with the actual fuel consumption of the trial aircraft and the data accuracy assessed.

EC RELUCTANCE

Humphries reports, however, that there is still much work to be done as the EC is reluctant to modify the guidelines decision, as this would force a delay and would reopen the decision-making process with member states.

"However, if they don't do this, we are really concerned that our operators will be saddled with a heavy and bureaucratic process that may give plenty of work to consultants, but will do nothing for the environment or their businesses at the very time when they are already struggling with the most difficult operating environment in decades," he says.

"We just cannot understand why the Commission seems set on forcing on operators emitting more then 10,000t of carbon a year the full panoply of monitoring, reporting and validation designed for installations emitting millions of tonnes of carbon."