ALLOCATION
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 IMPRINT German Emissions Trading Authority (DEHSt) at the Federal Environment Agency Bismarckplatz 1 14193 Berlin
Phone: +49 (0) 30 8903 5050 Fax: +49 (0) 30 8903 5010
Internet: www.dehst.de/EN E-mail: [email protected]
Status: 04/2012 CONTENT 1 Aviation in Emissions Trading...... 5 2 Flights Subject to Emissions Trading...... 6 2.1 Scope...... 6 2.2 Aircraft Operators Receiving Free Allocation...... 11 3 Allocation...... 16 3.1 Basis of Allocation...... 16 3.2 Analysis...... 18 4 Emissions...... 23 4.1 Legal Basis...... 23 4.2 Analysis...... 24 5 Comparison of Allocation and Emissions...... 26 5.1 Distribution...... 26 5.2 Comparison Based On Operator Categories...... 27 5.3 Extent of Burden on Small Emitters...... 29 5.4 Extent of Burden on End Consumers...... 31 5.5 Measuring Regulation Induced Effects on Competition...... 32 6 Final Comments...... 34 7 Appendix...... 35 7.1 Allocation List...... 35 7.2 Abbreviations and Acronyms...... 45 7.3 List of Illustrations...... 46 7.4 List of Tables...... 47
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 3 4 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 1 AVIATION IN EMISSIONS TRADING Aviation is crucial to global social and economic interaction. However, with aviation‘s steadily increasing share in mass transportation, its problematic aspects come into focus. These include high noise levels around airports and a major increase in greenhouse gas emissions with significant repercussions on the climate. Including aviation1 in the European Emissions Trading Scheme (EU ETS), as established in the Emissions Trading Directive2, will lead to effective climate protection while highlighting the significance of aviation. From 2012, commercial as well as non-commercial aircraft operators must surrender emission allowances for each tonne of carbon dioxide emitted as a result of their activities. The cap (upper limit of emission budget) for 2012 is set at 97 percent and for 2013-2020 at 95 percent of historic emissions of a baseline period (average of 2004-2006). In 2012, 85 percent and in 2013-2020 82 percent of the cap will be allocated free of charge. The remainder - minus a three-percent annual reserve from 2013 - will be auctioned. Surrender obligations can be met using aviation or stationary emission allowances and, to a limited extent, credits from project-based mechanisms (JI and CDM). All aircraft operators who carried out an activity subject to emissions trading in 2010 were entitled to apply for a free allocation of emission allowances. In order to receive these allowances, aircraft operators had to submit not only their annual emissions report, but also a one-off report on their transport volume, the 2010 tonne-kilometre report by 31/03/2011. The tonne-kilometre report also served as application for the free allocation of emission allowances. In the tonne-kilometre report, each aerodrome pair , including the payload transported (passengers, luggage, cargo and mail) and the distance had to be specified. The same report structure was used for the emissions report, where fuel consumption and the resulting carbon emissions had to be reported. The applications for free allowances from aircraft operators administrated by the Germany were checked by the competent authority, the German Emissions Trading Authority (DEHSt) at the Federal Environment Agency by 30/06/2011 and sent on to the European Commission. Based on the reported transport volume from all applications passed on by Member States and historic emissions, the Commission calculated a benchmark for the free allocation of emission allowances for 2012 and for 2013-2020. Individual allocations are determined by multiplying this benchmark with the relevant transport volume of each operator. The formal allocation decision by the DEHSt and the allocation notice was sent out to all aircraft operators receiving an allocation by 23/12/2011. In addition, an allocation list (Appendix 1) was published. At the beginning of this report, we first identify the sectors of aviation included in emissions trading. It can be shown that aviation includes a wide variety of different aircraft operators and business models, resulting in the need for multifaceted analysis in this report. Our objective is to establish a sophisticated picture of the distribution of emissions and allocations and the burdens and possible competitive distortions that may result from that.
1 Aviation was included in emissions trading through Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community 2 Directive 2003/87/of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 5 Table 1: Main results
Not all sectors of aviation are within the scope of the Emissions Trading Directive (see Chapter 2.1) Of the 409 aircraft operators administrated by Germany , 134 did apply for a free allocation. 129 Operators are receiving free allocation. They are very heterogeneous in size, business model and average flight distance (see Chapter 2.2). One half of the free allocation will be issued to just four of the 129 operators receiving free allocations. Although 57 percent of operators receiving free allocation come from the non-commercial sector, they receive less than one percent of the total allocation. This is because their transport volume is smaller by a factor of 133 than that of commercial operators (see Chapter 3.2). Emissions per transported tonne of payload range between 0.5 kg and 70 kg CO2/ km, with the average fuel consumption per passenger ranging between 2.6 l/100 km and 280 l/100 km (see Chapter 4.2.3.). The benchmark-based allocation led to excess and shortfall of allowances, compared to the annual emissions. The cover ratio (allocation volume for 2012 in relation to emissions in 2010) varies between 0.95 and 177.10 percent (see Chapter 5.1 and 5.2). The possible financial burden for end consumers (passengers) is moderate. Under certain assumptions, e.g. for capacity use, it will be between 0.15 and 2.50 Euros per flight, depending on distance (see Chapter 5.3.3). The difference in the allocation of free allowances to operators does not represent a significant competitive distortion. However, the benchmark-based approach reflects differences in efficiency between operators within the same or in contrast to other aviation business models (see Chapter 5.5).
2 FLIGHTS SUBJECT TO EMISSIONS TRADING
2.1 SCOPE 2.1.1 Aviation Classification from an Emissions Trading Perspective In principle, all aircraft operators whose aircraft depart or land within the territory of the European Economic Area (territory of EU Member States plus Iceland, Norway and Liechtenstein) take part in the European Emissions Trading Scheme according to the Emissions Trading Directive. However, exceptions exist for various aviation sectors that are included in emissions trading to a larger or lesser extent. For the sake of a uniform use of terminology in this report, Figure 1 shows a diagram of the classifications in aviation. This diagram will be the basis on which the involvement of the different aviation sectors will be discussed. In connection with Chapter 2.1.2, it will define which type of aircraft operators are included in emissions trading and receive an allocation and therefore be the subject of analysis in this report.
6 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 Civil Aviation
MTOM < 5.7 t MTOM > 5.7 t
Commercial Non-Commercial Commercial Non-Commercial Aviation Aviation Aviation Aviation
Scheduled Corporate Scheduled Corporate Flights Flights Flights Flights
Flights on Training Flights on Training Demand Flights Demand Flights Motor Motor Flights Air Taxis Flights
Glider Other Other Flights Flights Flights
Other Flights Figure 1: Simplified Aviation Classification from an Emissions Trading Perspective
In order to be able to use established international definitions in the following chapters, Table 2 complements the Emissions Trading Directive‘s definition by introducing globally valid definitions by the International Civil Aviation Organization (ICAO) and the International Business Aviation Councils (IBAC). Please note that German aviation legislation does not always have equivalents.
Table 2: Internationally established Definitions in the Context of Aviation Classification
Commercial Aircraft Operator (Emissions Trading Directive) “Commercial air transport operator” means an operator that, for remuneration, provides scheduled or non-scheduled air transport services to the public for the carriage of passengers, cargo or mail.“3
Commercial Aircraft Operator (European Union Aviation Legislation) No undertaking established in the Community shall be permitted to carry by air passengers, mail and/or cargo for remuneration and/or hire unless it has been granted the appropriate operating licence.4 The operating licence includes the Aircraft Operator Certificate (AOC). Commercial means the transport of passengers, cargo or mail against remuneration5.
3 Appendix 1 Part 2 Nr. 33 of the German Greenhouse Gas Emissions Trading Act (TEHG) and Art. 3 letter p Emissions Trading Directive 4 Article 20 Section 4 Aviation Act in connection with Regulation (EC) No. 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community 5 Article 11 Section 1 Ordinance on the Inspection of Aircraft and Aeronautical Equipment (example)
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 7
Scheduled Air Service (International Civil Aviation Organization) (…) an air service open to use by the general public and operated according to a published timetable or with such a regular frequency that it constitutes an easily recognizable systematic series of flights (…)6
Business Aviation (International Business Aviation Council) Three different categories7: Commercial: Aircraft flown for business purposes by an operator having a commercial operating certificate. Typically these are on-demand charters („air taxis“), fractional operators, (…) Corporate: Non-commercial operations with professional crews employed to fly the aircraft (e.g. corporate fleets) Owner-operated: Aircraft flown for business purposes by the owner of the aircraft In Figure 1, the commercial category has a sector „commercial flight on request“ and Corporate figures as „Corporate flights“, whereas owner-operated is not included due to the graphic rendition. Air taxis are defined as „a type of on-demand air service usually performed by small-capacity aircraft in a very similar way to an automobile taxi service. Or in some cases, a service operated on a scheduled basis with stops made only at points where passengers and cargo are picked up or discharged.“8
The differences in the definitions of „commercial aircraft operators“ in Table 2 are remarkable. The German TEHG and the Emissions Trading Directive take the view that the flight services must be available to the public.In contrast, the European aviation legislation definesnecessary preconditions which must be fulfilled for commercial aviation to take place (e.g. an aircraft operator certificate). The question whether such flights are carried out is irrelevant. Thus, a commercial aircraft operator (as defined by the aviation legislation of the European Community) can be defined as non-commercial from an Emissions Trading Directive perspective, as long as the flights are not offered to the public. From an Emissions Trading Directive view, the possession of an AOC is a necessary, but not a sufficient condition to be classified as „commercial operator“. This distinction can be important for possible exemptions from emissions trading.
6 International Civil Aviation Vocabulary (ICAO), 2nd edition, Montreal 2001 7 Business Aviation Safety Brief (IBAC), Summary of Global Accident Statistics, 1998-2002, Issue 2, March 2004 8 ICAO DOC 9626, Montreal 2004
8 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 2.1.2 Exemptions from Emissions Trading There are exemptions from the general emissions trading obligation mentioned in Chapter 2.1.1 (see Table 3).
Table 3: Simplified and abridged List of Flights outside the Scope of TEHG9
Official flights of reigning monarchs, heads of state, heads of government/government ministers of non-member states of the European Economic Area Agreement Military flights in military aircraft, customs and police flights Search and rescue missions, firefighting flights, humanitarian missions and medical emergency flights Flights performed under visual flight rules Round trips Training flights Flights for scientific research or for checking, testing or certifying aircraft or equipment Flights of aircraft with a certified maximum take-off mass of less than 5,700 kg Flights performed in the framework of public service obligations, on routes within outermost regions, or on routes where the capacity offered does not exceed 30 000 seats per year Flights by commercial aircraft operators if10 the aircraft operator carries out fewer than 243 flights per period for three consecutive four-month periods; or the aircraft operator carries out flights with total annual emissions lower than 10 000 tonnes of carbon dioxide per year.
The effects of the exceptions listed in Table 3 will be illustrated in the following examples:
Flights of aircraft with a certified maximum take-off mass (MTOM) of less than 5,700 kg Aircraft meeting these specifications are found in Business Aviation (especially in the air taxi segment). In non-commercial aviation, this may include many private aircraft (e.g. small motor aircraft, gliders).
Flights under visual flight rules, rescue, police, military and research flights Visual flight rules apply for example to private pilots in non-commercial aviation. Further exemptions apply to rescue flights (e.g. carried out by business aviation companies) and flights for research (e.g. surveying flights) are also exempt from emissions trading. Whereas the maximum take-off mass (MTOM) is a limitation that exempts all flights of a particular aircraft, the exemptions mentioned in this example only apply to specific flights. Thus, a flight of a research aircraft into the area to be surveyed may be subject to emissions trading, while the actual surveying flight (together with the scientists)is not. The flight to which the exemption applies must be exclusively dedicated to a specific purpose, e.g. research.
Flights by commercial aircraft operators with fewer than 243 flights per period for three consecutive four-month periods or emissions of less than 10,000 tonnes of carbon dioxide (CO2) per year Flights by a commercial aircraft operator with fewer than 243 flights in three subsequent four- month periods or less than 10,000 tonnes of carbon dioxide (CO2) emissions per year are outside the scope of the Emissions Trading Directive, regardless of the size of the aircraft or the type of flight11. 9 Appendix 1 Part 2 No. 33 TEHG 10 This exemption does not apply to flights exclusively carried out for the transport of reigning monarchs, heads of state, heads of government/government ministers of non-member states of the European Economic Area Agreement travelling in official function. 11 Flights of Heads of State from EEA countries excepted
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 9 As a consequence, even airlines using large aircraft with considerable carbon dioxide emissions can be exempt, as long as the number these flights subject to emissions trading is not exceeded.. For this reason, some sectors of commercial aviation in Figure 2 have been partially hatched. Figure 1 is now extended by the most important exemptions (Figure 2) to give an overview of the aviation areas subject to emissions trading that will be the subject of this report.
Civil Aviation
MTOM < 5.7 t MTOM > 5.7 t
Commercial Non-Commercial Commercial Non-Commercial Aviation Aviation Aviation Aviation
Scheduled Corporate Scheduled Corporate Flights Flights Flights Flights
Flights on Training Flights on Training Demand Flights Demand Flights
Motor Air Taxis Motor Flights Flights Other Glider Other Flights Flights Flights
Other Flights
Figure 2: Degree of inclusion in emissions trading (blue colour indicates exemption from emissions trading)
2.1.3 Administering States Every aircraft operator within the scope of the Emissions Trading Directive must be assigned to an Administering Member State. For commercial aircraft operators based in an EU Member State, the Administering Member State is the state that issued the operating licence for the operator. This procedure is not necessarily followed as far as non-commercial aircraft operators within the EU and operators based outside the EU are concerned. In these cases, the Member State in which the assigned estimated emissions from the aircraft operator in a baseline year are highest will be the Administering Member State. The baseline year is normally 2006 and for aircraft operators that started operations after 01/01/2006, the baseline is their first year of activity. Assigned aviation emissions are emissions produced during aviation activities with departures from a Member State or arrivels from third-party countries at aerodromes on the territory of a Member State. Aircraft operators are assigned to Administering Member States on the basis of emission estimates from EUROCONTROL‘s air traffic control data. Each aircraft operator has thus been assigned to one EU Member State. The List of Administering Member States12 has been compiled and published by the European Commission. It lists aircraft operators who were involved in aviation activities from 01/01/2006 and are potentially within the scope of the Emissions Trading Directive. Aircraft operators not included in the German Administering Member States list, but in possession of a German operating licence have been assigned to Germany. The following explanation of the allocation process refers to operators assigned to Germany as Administering Member State only.
12 Regulation (EU) No. 394/2011 of April 20th 2011 (current List of Administering States)
10 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 2.2 AIRCRAFT OPERATORS RECEIVING FREE ALLOCATION This section focuses on aircraft operators receiving regular free allocation of emission allowances. After looking at the number of applications submitted (in relation to the List of Administering Member States), various other characteristics such as country of origin and type of activity will be considered. Not all aircraft operators assigned to a state according to the List of Administering Member States mentioned in Chapter 2.1.3 are subject to emissions trading. If, for example, an operator can prove that their own aircraft is used outside Europe only and flew across Europe only once in the past (before 2010) in a ferry flight, the operator can be exempt from the duty to submit a monitoring plan.13 Figure 3 shows the current allocation status of aircraft operators assigned to Germany. Of the aircraft operators for whom the DEHSt is the competent authority, all major airlines met their obligations in time. In total, approximately 99 percent of aviation emissions have been covered.
416 aircraft operators administered by the DEHSt 409 on German List of Administering States 4 Operators have now been transferred to the Icelandic List of Administering States 3 Operators with German operating licence
Transport Volume
Tonne-kilometre reports Monitoring plans tonne-kilometre (Applications for free allocation) 150 144
129 operators entitled to allocations
3 operators not subject to emissions trading in 2010
7 operators did not specify a transport volume
4 operators have been transferred to the Ice- landic List of Adminstering Member States
1 application rejected because of time lapse
Emissions
Monitoring plans annual emissions Emission reports 161 158 Discrepancy with number of monitoring plans: due to insolvency, exemptions and non-conformity
Exemptions 58 (verified by DEHSt) Not recognised as operator, no responsibility 41 (verified by DEHSt)
No administration record 156 No permission to enter the airspace, termination of operation etc.
Figure 3: Status of assigned aircraft operators, based on List of Administering Member States
In the following, the evaluations refer only to aircraft operators receiving free allocation.
13 All aircraft operators participating in emissions trading are under obligation to compile a plan for the
monitoring and calculation of their carbon dioxide (CO2) emissions at the beginning of each trading period.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 11 2.2.1 Grouping according to seat of registration Figure 4 shows the number of flights with allocation-relevant transport volume according to the aircraft operator’s country of origin. The country of origin is the country of the entrepreneur’s domicile. Most flights were carried out by operators originating from Germany, Turkey, the United States and the Russian Federation.
Figure 4: Number of flights with allocation-relevant transport volume according to the aircraft operator’s country of origin
Figure 5 shows the number of aircraft operators receiving free allocation according to country of origin. With 48 percent, Germany has the largest share by far because an EU Member State is always the Administering Member State if it issued an operation licence to an aircraft operator. As Figure 5 only shows the number of aircraft operators, no conclusions can be drawn on traffic flows (flights). By assigning an operator to a country of origin, all flights to other countries that are subject to emissions trading are assigned to the country of origin. Example: A flight from Istanbul to Berlin by an Egyptian airline assigned to Germany’s List of Administering States would thus be considered to be traffic into Egypt. However, looking at the number of aircraft operators, the major share is based in Germany and the remainder is distributed over a wide spectrum of countries.
12 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 62
60 45% 55 40% 50
45 35%
40 30% 35 25% 30
25 23 20%
20 15%
15
Number of aircraft operators applying for free allocation free for applying operators aircraft of Number 10%
10 7 7 7 5% 5 3 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 0 0%
Figure 5: Number of airline operators receiving free allocation, sorted according to country of origin
2.2.2 Commercial Status While in Figure 1 subdivisions in aviation were chosen that clarified to what degree they were included in the emissions trading scheme, Chapter 2.1.2 emphasized the aspect of commerciality. Figure 6 shows the share of the respective groups, based again on the total number of aircraft operators receiving free allocations. In numbers, 57 percent of aircraft operators are commercial, while in terms of transport volume data from 2010, a different picture arises. Non-commercial aircraft operators provided less than one percent of the transport volume. Chapter 3.2.2 will look at the implications of this observation.
55 43% 9,056,729 63,014,293,712 <1% 74 >99% 57%
commercial non-commercial
Figure 6: Proportions of commercial and non-commercial aircraft operators receiving free allocation (left) and their respective share of the total transport volume for the reporting year 2010 (right)
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 13 2.2.3 Average Flight Distance This section looks at operators according to their average flight distance for allocation-relevant flights during the reporting year 2010 (see Figure 7). The range (shown in navy) is defined by the distance from the left to the right black line. It is calculated by subtracting the minimum distance (319km) from the maximum distance (9,103 km). The resulting difference is 8,784 km. This is roughly the great circle distance between Berlin and Bangkok. At first glance, the range is quite wide, but the position of the median (1,684, green) and the width of the box(difference between lower and upper quartile, light blue and red) which represents the middle 50 percent of data indicates distances between 816 (light blue) and 3,340 km (red). The distribution is not symmetrical, but skewed to the right - i.e. the majority of flights is within the typical short and mid-distance range.
Range Median Lower Quartile Upper Quartile Datenreihen5 Datenreihen6 Datenreihen7 Datenreihen8
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
average flight distance [km]
Figure 7: Box-Whisker-Plot showing the average distance of flights by all aircraft operators receiving free allocations for the reporting year 2010
Table 4 shows that 36 percent of operators operate in the short distance segment (average distance below 1,000 km). Assuming that the defining line between mid and long distance is 4,000 km, a proportion of 48% is below 4,000 km and 16 percent above 4,000 km. The definition of short mid and long distance seems to be critical for operators operating in all business models. However, since the number of these operators in the German section of the List of Administering Member States is small, their influence is negligible.14
Table 4: Classification according to average flight distance per aircraft operator receiving free allocation
Average Flight Distance Number of Operators Percentage < 1,000 km 46 36% 1,000 - 4,000 km 62 48% > 4,000 km 21 16% Total 129 100%
14 This applies to no more than three aircraft operators. The total average flight distance was calculated between 1,000 km and 4,000 km. Because of the classification of operators, no conclusions can be drawn on the proportion of short, mid and long distance flights.
14 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 2.2.4 Size Size can be determined by various indicators (e.g. size of fleet). As this report focuses on activity in relation to emissions trading, the number of flights subject to emissions trading will be used as a size indicator. This does not necessarily reflect the true size of the company because operators carrying out many daily flights in their country/region of origin, but operating just a small number of flights to Europe will thus be classified as „small“ aircraft operators. The difference between the operator with the lowest (three flights) and the operator with the highest (624,787 flights) number of flights figures as range (navy) in Figure 8. As the range of flights per aircraft operator is 624,784, logarithmic scaling is required in Figure 8. The quartile distance (median 50 percent) lies between 101 (lower quartile, light blue) and 3,180 flights (upper quartile, red). Not only is the range very wide, but the majority of flight data covers a low number of flights. The logarithmic scaling does not sufficiently highlight that the distribution is skewed to the right, but it becomes clear that the median is in the left side of the box. It can be concluded that the majority of aircraft operators were responsible for only a small fraction of the flights by the operator with the maximum flights.
Range Median Lower Quartile Upper Quartile Datenreihen5 Datenreihen6 Datenreihen7 Datenreihen8
1 10 100 1000 10000 100000 Number of flights per aircraft operator in the reporting year 2010
Figure 8: Box-Whisker-Plot showing the number of flights per aircraft operator receiving free allocation in 2010 (logarithmic scaling)
When distinguishing between commercial and non-commercial operators receiving free allocation in the reporting year 2010, it turns out that the flights carried out by non-commercial operators make up no more than 1.2 percent. This is reflected in Table 5 where only 12 percent of the non- commercial aircraft operators carry out more than 500 flights per year. Conversely, all commercial operators must have carried out more than 243 flights per year because otherwise they would be exempt from emissions trading according to the regulations (less than 243 flights in three subsequent four-month periods). Assuming that flight activities were seasonally balanced, even operators carrying out up to 726 flights would not be subject to emissions trading.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 15 Table 5: Commercial and non-commercial Operators, sorted according to Number of Flights carried out
Operator Number of Percentage Type of Operator Size in Number of Flights Type Operators of Total Percentage commercial 500 - 1,000 Flights p.a. 3 5.5% 2.3% 1,000 - 5,000 Flights p.a. 25 45.5% 19.4% 5,000 - 10,000 Flights p.a. 11 20.0% 8.5% 10,000 - 100,000 Flights p.a. 14 25.5% 10.9% more than 100,000 Flights p.a. 2 3.6% 1.6% Total commercial 55 100,0% 42.6% non-commercial < 10 Flights p.a. 4 5.4% 3.1% 10 - 50 Flights p.a. 17 23.0% 13.2% 50 - 150 Flights p.a. 23 31.1% 17.8% 150 - 500 Flights p.a. 21 28.4% 16.3% 500 - 1,000 Flights p.a. 6 8.1% 4.7% 1,000 - 5,000 Flights p.a. 3 4.1% 2.3% Total non-commercial 74 100% 57.4%
3 ALLOCATION
3.1 BASIS OF ALLOCATION 3.1.1 Entitlement to the free allocation of allowances According to the Greenhouse Gas Emissions Act TEHG, Article 11 Section 1 and 3, all aircraft operators having carried out flights subject to emissions trading in 2010 had the right to apply for the allocation of free emission allowances for trading periods 2012 and 2013-2020. In order to apply, a one-off verified report on the transport volume in 2010 (tonne-kilometre report) had to be submitted together with the 2010 emissions report by 31/03/2011. According to TEHG, Article 11 Section 5, the DEHSt was required to check the tonne-kilometre data in the applications and transfer the applications to the European Commission by 30/06/2011, where an average benchmark was calculated. The numerator contained the average annual total of emissions from all flights by aircraft operators subject to emissions trading between 2004 and 2006 (historic emissions). From this estimated value were subtracted the mitigation target, auction volume and special reserve (2013-2020). The nominator for the average benchmark comprises the total transport volume of aircraft operators applying for an allocation for the reporting year 2010. The resulting benchmark is applied consistently throughout Europe and does not distort competition between operators because it is based on the transport volume achieved.
3.1.2 Allocation Benchmarks In its Decision 2011/638/EU, the European Commission published the benchmarks for the calculation of the free allocation of emission allowances for aircraft operators on 26/09/2011. They are set at approximately 0.68 emission allowances per 1,000 tonne-kilometres15 for 2012 and approximately 0.64 emission allowances per 1,000 tonne-kilometres16 for 2013-2020. The number of aviation allowances (each covering the emission of one tonne of carbon dioxide) issued to operators was based on the product of the benchmark and the transport volume (in tonne- kilometres) in the baseline year. Compared to other allocation methods (such as allocation based on historic emissions), the benchmark-based allocation of free emission allowances, is more likely to create an incentive for fuel economy and thus climate protection in aviation. 15 0.000679695907431681 emission allowances per tkm (basis for calculation) 16 0.000642186914222035 emission allowances per tkm (basis for calculation)
16 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 The lower the emissions caused by the transport carried out by the operator, the higher the proportion of free allowances allocated, reducing the need to purchase allowances. The benchmark approach thus conforms to the environmental objective of rewarding efficient operators as they are put in a better position in comparison to inefficient operators and is therefore encouraging investment in emission reduction. The opportunity to realize emission reduction potential by encouraging investment in more efficient equipment or better use of capacities is increasedwith the variance in the efficiency of the aircraft or strategies used in the existing market. The benchmark approach varies in its implications for different business models. Non-commercial (especially business aviation) operators receive a relatively small allocation due to their low transport volume. Consequently, they must shoulder the higher proportion of external cost (high carbon dioxide emissions per passenger) of their business model. Conversely, commercial aircraft operators with their high transport volume (larger aircraft and often high use of capacities and lower carbon dioxide emissions per passenger) receive significantly more free allowances. In Part 5 of this report allocations and carbon dioxide emissions will be compared and analysed. Analysing existing convergence between allocation and emissions can be a first clue as to where emission reduction potential may be realised. At the beginning of emissions trading for aviation, no empirical evidence can be provided yet as to whether the incentives, including benchmark-based allocation, will be effective and initiate emission reduction measures. This will be the object of future evaluations. Furthermore, the establishment of an average benchmark ensures that the cap (the absolute top limit for emissions, set at 97 percent for 2012 and 95 percent of the average 2004-2006 emissions for 2013-2020) will be adhered to in the allocation process and all aircraft operators will receive the same number of emission allowances per tonne-kilometre unit.
3.1.3 Allocation Procedure Member States were given three months for the formal allocation of free emission allowances to individual aircraft operators. The list containing the names of all aircraft operators and their respective allocations were published on the DEHSt website (www.dehst.de) on 23/12/2011. The list of free allocations issued to aircraft operators administered by Germany is also found in Appendix 7.1. An overview of the relevant allocation decisions by other EU Member States is found on the website of the European Commission http://ec.europa.eu/clima/policies/transport/aviation/allowances/links_en.htm. According to TEHG Article 14 Section 3 Sentence 1, the DEHSt as the competent authority will issue the total volume of aviation emission allowances for a trading period in equal annual instalments to be issued by the 28/02/ of the relevant year.
Figure 9: Timeline - Dates relating to emissions trading in aviation
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 17 In 2012, 85 percent of aviation emission allowances will be issued free of charge. The remaining 15 percent will be auctioned. Between 2013 and 2020, only 82 percent of aviation emission allowances will be allocated free of charge because every year, three percent of the total quantity will be added to the special reserve for new entrants and fast-growing aircraft operators. The special reserve will be allocated according to a different set of application and allocation rules (see TEHG Articles 12 and 13). Between 2013 and 2020 the remaining 15 percent will be auctioned as well.
3.2 ANALYSIS 3.2.1 Type of Transport Volume To complement Figure 6, Figure 10 shows on what basis the transport volume was calculated. While with non-commercial operators, 96 percent are passenger transport (including luggage), commercial operators have a transport volume consisting of 66 percent passenger transport (including luggage) and cargo/mail. Commercial operators transporting passengers (including luggage) only are almost as rare (10 percent) as commercial operators transporting cargo/mail only (9 percent). Please note that the category „Passengers (incl. luggage) and cargo/mail does not necessarily mean that these are transported in the same aircraft, but rather denotes the fact that passengers and their luggage as well as cargo/mail have been transported in the reporting year 2010. commercial operator non-commercial operator
3 4%
10 18%
9 16%
36 66% 71 96%
Passengers (incl. luggage) Cargo/mail Passengers (incl. luggage) and cargo/mail
Figure 10: Payload transported by commercial and non-commercial operators receiving free allocation
3.2.2 Allocation to operators, sorted into different categories Figure 11 shows the allocation volumes of emission allowances per aircraft operator across all categories (commercial and non-commercial). Again, the differences are significant, ranging from a minimum of nine to a maximum of 107,521,784 aviation emission allowances for the trading period 2012 and 2013-2012. The range is a figure near the highest allocation. Note that the median, however, lies at 743 allowances and the median 50 percent are between 172 (light blue) and 1,138,851 (red). For a more differentiated representation, non-commercial (lower average allocation in absolute figures) and commercial operators (higher average allocation in absolute figures) will be shown separately. The total allocation volume for non-commercial operators is 0.014 percent only.
18 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 Range Median Lower quartile Upper quartile Datenreihen5 Datenreihen6 Datenreihen7 Datenreihen8
1 10 100 1000 10000 100000 1000000 10000000 100000000 1E+09 Allocation 2012-2020 [Aviation emission allowances]
Figure 11: Box-Whisker-Plot showing allocation volumes per aircraft operator for the 2012-2020 period (logarithmic scaling)
Table 6: Total Allocation 2012-2020 for commercial and non-commercial Aircraft Operators
Allocation Allocation Percentage Number of Allocation Type of Operator 2012 2013-2020 Allocation Operators 2012-2020 [EAs] [EAs/a] [EAs/a] 2012-2020 commercial 55 42,830,532 40,466,928 366,565,956 99.986% non-commercial 74 6,118 5,775 52,318 0.014% Total 129 42,836,650 40,472,703 366,618,274 100%
3.2.3 Allocation for non-commercial aircraft operators Figure 12 shows a histogram of the 2012-2020 allocations. The category with allocations between 1 and 200 aviation emission allowances comprises 36 operators. With 48.7 percent, they represent the largest percentage of non-commercial aircraft operators. Combined with the 200-400 aviation emission allowances category, they make up 78.4 percent. Thus, three quarters of all non-commercial aircraft operators receive 1 to 400 aviation emission allowances, which is only 19 percent of all allocations to non-commercial operators. Figure 11 shows that the two largest operators receive 55 percent of the allocation, the largest of which does not operate in a business aviation segment.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 19 50 100%
45 90% Frequency
40 80%
35 70%
30 60%
25 50%
20 40%
15 30%
10 20% Frequency Proportion of non-commercial operators % 5 10% Non-commercial allocation %
0 0% 200 600 1,000 1,400 1,800 2,200 2,600 6,200 6,600 7,000 7,400 7,800 3,000 3,400 3,800 5,000 9,000 4,200 4,600 5,400 8,200 9,400 5,800 8,600 9,800 11,000 11,400 11,800 12,200 12,600 16,200 16,600 17,000 17,400 17,800 13,000 13,400 13,800 10,200 10,600 15,000 19,000 14,200 14,600 15,400 18,200 19,400 15,800 18,600 19,800 und größerund
Allocation 2012-2020 [Aviation emission allowances] Figure 12: Distribution frequency of allocation volumes for non-commercial operators receiving free allocation
3.2.4 Allocation for commercial aircraft operators Figure 13 shows a histogram of the 2012-2020 allocations. When aggregating categories up to 1,000,000 und 1,000,000 to 2,000,000 aviation emission allowances, the resulting proportion is 50.9 percent. More than half of commercial operators receive between one and 2,000,000 allowances. This is no more than 6.5 percent of the total allocation of allowances to commercial aircraft operators.
25 100%
90% Frequency
20 80%
70%
15 60%
50%
10 40%
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5 Frequency 20% Proportion of commercial operators % Commercial allocation % 10%
0 0% 1 7 3 5 9 11 17 71 13 31 21 15 19 51 61 91 41 81 77 37 73 33 27 57 67 75 79 97 23 35 39 53 63 93 47 87 25 29 55 59 65 69 95 99 43 83 45 49 85 89 101 107 103 105 109
Allocation 2012-2020 [Aviation emission allowances]
Figure 13: Distribution frequency of allocation volumes for commercial operators receiving free allocation
20 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 3.2.5 Shares of the allocation per aircraft operator receiving free allocation Figure 14 provides the cumulative frequency distribution of the entire allocation between 2012-2020. In contrast to Chapters 3.2.3 and 3.2.4, no distinction is made between commercial and non-commercial operators. This permitted an evaluation of what number of aircraft operators would receive what proportion of the total 2012-2020 allocation. For a given allocation value on the horizontal axis the relative share of the total allocation can be observed.
100%
90%
80% 48 %
70%
60% 52 % 50%
40%
30%
20% Proportionof aircraft operators receiving no more than emission x allowances 10%
0% 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 110,000,000
Allocation 2012-2020 [Aviation emission allowances]
Figure 14: Cumulative frequency distribution of the 2012-2020 allocation
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 21 3.2.6 Geographical distribution of the allocation volume Figure 15 shows allocation volumes sorted according the aircraft operators‘ country of origin. The next highest volume after German operators goes to operators from the United States. However, this does not allow any conclusions as to international traffic concentration, as all flights subject to emissions trading carried out by an operator will be assigned to the operator’s country of origin, irrespective of their destination.
60.0000%
180
50.0000% 160 52.2654%
140 40.0000%
120
100 30.0000%
80 21.6540%
20.0000% 60 2020 Allocation (in Million Aviation Emission Allowances) Emission Aviation Million (in Allocation 2020 - 40
2012 10.0000% 6.6295% 5.9520% 4.7226% 20 4.3721% 3.0170% 0.4170% 0.3077% 0.1551% 0.1224% 0.1535% 0.1270% 0.0515% 0.0192% 0.0335% 0.0001% 0.0001% 0.0002% 0.0002% 0.0000% 0 0.0000%
Figure 15: Absolute and relative share of the total 2012-2020 allocation, sorted according to the aircraft operators‘ country of origin
3.2.7 Transport volume per flight Figure16 shows the differences in transport performance (volume of transport carried out and thus allocation-relevant) between commerical and non-commercial aircraft operators. The transport performance of commercial operators per flight is higher by a factor of 133 (in relation to the respective median, see also Figure 15). The result is hardly surprising in view of the diverging business models of business aviation and scheduled aviation (these are the main representatives of each group) as far as transport performance per flight is concerned. It is self-evident that air taxi service providers operate on demand on a decentralised basis. The type of aircraft used and the task in hand restrict transport performance. At the other end of the spectrum, traditional airlines, charter and low-cost airline services aim for an optimum use of capacity and high transport performance. Payloads are highest in dedicated cargo aircraft, which is why cargo companies have been separately marked in Figure 16. The diagram shows a progression from low to high transport performance and the operator categories non-commercial, commercial and dedicated cargo aircraft operators.
22 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 Non-commercial operators 500000 Commercial Operators
Cargo operators
Median non-commercial operators
Median commercial operators 50000 Factor 5000 Average transport performance per flight [tkm] flight per performance transport Average 133
500
50 0 20 40 60 80 100 120
Ranking of aircraft operators with increasing average transport performance
Figure 16: Average transport performance of non-commercial and commercial aircraft operators receiving free allocation (logarithmic scaling)
4 EMISSIONS
4.1 LEGAL BASIS 4.1.1 Obligations for Reporting and Surrendering of Allowances TEHG Article 5 commits aircraft operators to determine their emissions generated during a calendar year and to report them to the DEHSt as the competent authority by 31/03/ of the subsequent year (reporting obligation). The data in the emissions report must have been verified by a verifying body. Following the submission of the report, according to TEHG Article 7 Section 1 Sentence 1, operators must surrender the number of emission allowances to cover emissions caused in the previous year by 30/04 of every year, starting from 2013 (obligation to surrender allowances).
4.1.2 Possible Sanctions If an operator does not comply with the reporting and surrendering obligations, comprehensive sanctions ensue. According to TEHG Article 29 Sentence 1, the competent authority has the right to block an account in the Emissions Trading Registry in order to enforce the reporting obligation. In order to enforce the obligation to surrender emission allowances, TEHG Article 30 Section 1 states that the DEHSt has the right to impose a fee of 100 Euros for each tonne of carbon dioxide that has been emitted, but not covered by an emission allowance. The fee does not exempt the operator from the obligation to surrender the allowances required. For that purpose, the DEHSt has the right to determine the volume of emissions generated on estimates. TEHG Article 32 lists a comprehensive catalogue of offenses. Offenses, such as incorrect specifications in violation of the reporting obligations can be sanctioned with a fine of up to 500,000 Euros (TEHG Article 32). As a last resort, as specified in TEHG Article 31, operations of the offending operator may be suspended Europe-wide.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 23 4.2 ANALYSIS 4.2.1 Classification according to type of operator and size of company Table 7 breaks down the 129 operators that were allocated free emission allowances by 23/12/2011 into commercial and non-commercial operators and different size categories (in relation to their emissions).
Table 7: Emissions 2007-2008 and 2010 – Operator Status and Size Emissions 2007 Emissions 2008 Number [t of CO ] [t of CO ] Emissions Percentage Type of Mass- 2 2 of (EURO- (EURO- 2010 of Emissions Operator Emissions Operators CONTROL CONTROL [t CO2/a] in 2010 Estimate) Estimate) Commercial 10,000 to 10 584469 314579 298,183 0.58% 50,000 50,000 to 25 3378093 3630019 5,234,918 10.11% 500,000 > 500,000 20 40224842 42058783 46,153,223 89.13% Subtotal 55 44187404 46003381 51.686.324 99,82% Non- < 1,000 57 21428 22444 25,437 0.05% commercial 1,000 to 15 31374 34478 37,201 0.07% 10,000 10,000 to 2 24403 22984 32,795 0.06% 50,000 Subtotal 74 77205 79906 95,433 0.18% Total 129 44264609 46083287 51,781,757 100% It emerges that apart from two exceptions, emissions of non-commercial aircraft operators remain below 10,000 tonnes of carbondioxide p.a. Average emissions of commercial operators, by contrast, are significantly higher. The 20 commercial aircraft operators in the size category above 500,000 tonnes of carbon dioxide p.a. are responsible for approximately 90 percent (2010 89.13 percent) of all emissions across the sector.
4.2.2 Reported Emissions and Emissions Budget When looking at the cap, we must allow for the fact that it is based on historic aviation emissions, i.e. the median of 2004-2006. Compared to reductions mentioned in the Emissions Directive (total volume of 97 percent (2012) and 95 percent (2013-2020), the objective becomes increasingly ambitious with the expansion of the aviation sector. The annual growth rate of world aviation between 1999 and 2009 was 3.7 percent17. At an estimated annual growth of emissions by two percent (between 2004 and 2012), an aircraft operator with average efficiency will thus receive no more than 70 percent of the required allowances for free, and just under 65 percent in2013. This explains why emissions of aircraft operators have already been exceeding the total cap for 2012 and 2013-2020 for several years (see Figure 17). It seems therefore likely that the sector will be a buyer on the emission allowances market in the coming years.
17 International Civil Aviation Organization (ICAO) Environment Report 2010, p. 19
24 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 60,000,000 Emissions Allocation volume 2012 Allocation volume 2013-2020
50,000,000 Tonnes of carbon dioxide carbon of Tonnes
40,000,000
30,000,000
20,000,000
10,000,000
0 2007* 2008* 2009** 2010
Figure 17: Allocation volume and reported emissions (*non-verified estimate by EUROCONTROL, **no data available, ***verified emissions reports)
4.2.3 Efficiency of aircraft operators, based on transport performance Emissions in relation to transport performance (tonne-kilometres) can be used to measure the efficiency of aircraft operators. The lower the emissions, the more efficient the operator, which will be reflected in the issuance of a higher number of free emission allowances for that operator. Figure 18 shows a large discrepancy between the 129 aircraft operators who applied for free allocations of emission allowances. Emissions range from 0.0004 to 0.07 tonnes of carbon dioxide per tonne-kilometre, differing from each other by a factor of 14. The arithmetic mean is 0.01 tonnes of carbon dioxide per tonne-kilometre.
0,080
Emissions per tonne-kilometre 0,070 Arithmetic mean of emission values kilometre (t/tkm) kilometre - Weighted (transport performance) arithmetic mean 0,060 of individual emission values
0,050 Emissions per Emissions tonne
0,040
0,030
0,020
0,010
0,000 0 20 40 60 80 100 120 140
Rank ordering of aviation operators from lowest to highest emissions per tonne-kilometre
Figure 18: Emissions per tonne-kilometre – all operators
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 25 Differences between commercial and non-commercial aircraft operators are evident. While commercial aircraft operators operate much more efficiently – almost all of them remaining below the arithmetic mean of 0.01 tonnes of carbon dioxide per tonne-kilometre – nearly all non-commercial operators exceed the mean. This means they are significantly less efficient (see Figure 19). Looking at the actual transport performance, it becomes plausible why the weighted arithmetic mean across all operators is as low as 0.000822 tonnes of carbon dioxide per tonne- kilometre.
0,08
Emissions per tonne-kilometre commercial
0,07 Emissions per tonne-kilometre non-commercial kilometre (t/tkm) kilometre
- Emissions per tonne-kilometre, weighted (transport performance) arithmetic mean commercial operators 0,06 Emissions per tonne-kilometre, weighted (transport performance) arithmetic mean non-commercial operators
0,05 Emissions per Emissions tonne
0,04
0,03
0,02
0,01
0 0 10 20 30 40 50 60 70 80
Rank ordering of operators from lowest to highest emissions per tonne-kilometre
Figure 19: Emissions per tonne-kilometre – comparison of commercial and non-commercial operators
5 COMPARISON OF ALLOCATION AND EMISSIONS For a qualitative evaluation of the financial implications arising from the inclusion of aviation in the EU emissions trading scheme for individual aircraft operators, we will now compare the volume of freely allocated emission allowances and the emissions generated in 2007, 2008 and 2010.
5.1 DISTRIBUTION The application of the benchmark approach means that allocations are not distributed according to the corresponding emissions. Figure 20 (Cover ratio – comparison of allocation and emissions in 2010) shows allocation rate and emissions in relation to the cover ratio of allocations and actual emissions for 2010, which is defined as the quotient of free allocation and actual emissions. The curves are not congruent, but there is a close correlation between them. The curve divergence arises from operators with a cover ratio of more than 100 percent. Eleven operators achieving a cover ratio of over 100 percent receive 23 percent of the allocation volume, but are only responsible for 17 percent of emissions in 2010. By comparison, 28 operators with a cover ratio of 60 to 100 percent receive 75 percent of the allocation volume but are responsible for 81 percent of emissions.
26 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 80 60%
Number of operators
70 Percentage of emissions in 2010 Proportion 2012-2020 allocation 50%
60 Number of aircraft operators aircraft of Number 40% 50
40 30%
30 20%
20
10% 10
0 0% < 20 % 20%-40% 40%-60% 60%-80% 80%-100% 100%-120% 120%-140% 140%-160% 160%-180%
Cover ratio
Figure 20: Cover ratio - comparison of allocation and emission proportions
5.2 COMPARISON BASED ON OPERATOR CATEGORIES 5.2.1 Comparison commercial – non-commercial When comparing commercial and non-commercial operators, it becomes evident that most commercial operators lie in a cover ratio range between 60 and 100 percent. In other words, the number of emissions allowances allocated free of charge covers 60 to 100 percent of 2010 emissions. (see Table 8).
Table 8: Comparison Allocation Volume and Emissions– commercial and non-commercial
Emissions Emissions Percentage 2007 2008 of 2012 Number Emissions Percentage Type of Allocation [t of CO ] [t of CO ] allocations in of 2 2 2010 in 2010 Operator 2012 EAs/a] (EURO- (EURO- Emissions Operators [t of CO /a] Emissions CONTROL CONTROL 2 2010 Estimate) Estimate) commercial 5%-15% 1 1,479 48587 42543 26,976 0.05% 20%-40% 4 116,650 139,672 131,997 328,589 0.63% 40%-60% 11 613,290 1,140,612 1,155,802 1,140,986 2.20% 60%-80% 13 17,997,802 21,594,237 22,641,318 25,639,616 49.51% 80%-100% 15 14,090,893 12,898,353 13,285,434 16,303,696 31.49% 100%-120% 5 4,189,735 4,912,646 4,895,904 4,090,367 7.90% 120%-140% 4 3,077,673 1,720,374 2,087,907 2,420,267 4.67% 140%-160% 1 2,008,504 1,732,923 1,762,476 1,321,086 2.55% 160%-180% 1 734,506 0 0 414,741 0.80% Subtotal 55 42,830,532 44,187,404 46,003,381 51,686,324 99,82% Non- <5% 43 1,467 35,475 39,938 44,295 0.09% commercial 5%-15% 31 4,651 41,730 39,968 51,138 0.10% Subtotal 74 6,118 77,205 79,906 95,433 0.18% Total 129 42,836,650 44,264,609 46,083,287 51,781,757 100%
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 27 Only one commercial operator has a cover ratio below 20 percent.One fifth of commercial operators receive free allocations that exceed the level of emissions caused by them in 2010. By contrast, none of the non-commercial aircraft operators reaches a cover ratio of over 15 percent. The majority of non-commercial operators has a cover ratio below 5 percent.
5.2.2 Comparison of cargo and passenger transport When comparing cargo and passenger transport, it is striking that operators specialising in cargo receive the most generous allocations of free emission allowances (see Table 9): Two thirds of these aircraft operators achieve cover ratios of over 100 percent, one fifth even over 140 percent. The explanation lies in the very high payloads transported in cargo aircraft (see also Chapter 3.2.7).
Table 9: Comparison of Allocation Volume and Emissions -cargo- and passenger transport
Percentage Transport Mean of 2012 Transport Performance Mean of Mean of Average Type of allocations Number of Performance- Mean the 2010 the 2012 Flight Transport in Emissions Operators Mean (Cargo) (Passengers) Allocation Allocation Distance/ 2010 (in steps [t*km] [t*km] Flight of 20)
Cargo 40%-60% 2 0 173,819,613 205,424 118,144 3,464 80%-100% 2 0 419,215,883 310,269 284,939 4,880 100%-120% 1 0 891,181,729 592,480 605,732 5,360 120%-140% 3 0 1,164,254,933 624,171 791,339 4,163 140%-160% 1 0 2,955,004,569 1,321,086 2,008,504 5,318 160%-180% 1 0 1,080,639,761 414,741 734,506 5,229 Subtotal 10 0 960,566,185 523,221 652,892 4,509 Passenger < 20 % 2 1,696,365 158,897 9,907 1,261 1,272 and Cargo 20%-40% 1 8,265,226 326,227 17,842 5,839 1,224 40%-60% 8 62,179,727 4,512,647 86,977 45,330 2,053 60%-80% 11 1,786,536,389 598,599,732 2,310,502 1,621,167 2,966 80%-100% 9 1,853,216,428 290,474,587 1,691,245 1,457,058 4,040 100%-120% 4 532,196,121 786,042,319 874,472 896,001 4,734 120%-140% 1 362,242,767 673,008,905 547,754 703,656 5,105 Subtotal 36 1.092.526.976 362,577,548 1,261,551 989,028 3,145 Passenger < 20 % 73 103,059 0 1,405 70 1,586 Transport 20%-40% 3 54,344,648 0 103,582 36,937 1,936 40%-60% 1 21,131,219 0 34,323 14,362 1,088 60%-80% 2 121,352,986 0 112,050 82,483 2,109 80%-100% 4 149,882,819 0 115,488 101,874 2,003 Subtotal 83 12,456,936 0 13,659 8,466 1,625 Total 129 312,906,177 175,646,927 401,409 332,067 2,273 None of the operators specialising in passenger transport receives free allocations exceeding emissions of 2010. A high proportion of aircraft operators in this group, however (70 out of 83, which is 84.3 percent) had a cover ratio below ten percent. These operators have usually adopted a business aviation model. About a third of aircraft operators transport cargo as well as passengers. These are generally the traditional airlines. The majority of these operators achieve a cover ratio of 60 to 80 percent. They claim the middle ground between dedicated cargo airlines and dedicated passenger transport operators, with the often using small aircrafts (see Figure 21).
28 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 80
70
Amount of Operators 60
50
40
30
Cargo only Cargo and Passengers 20 Passengers only
10
0 AV less than AV 20-40% of AV 40-60% of AV 60-80% of AV 80-100% of AV 100-120% AV 120-140% AV 140-160% AV more than 20% of EM EM EM EM EM of EM of EM of EM 160% of EM
Figure 21: Cover ratio of 2010 emissions – comparison cargo– cargo and PAX – PAX
5.3 EXTENT OF BURDEN ON SMALL EMITTERS 5.3.1 Simplified reporting procedure for small emitters Aircraft operators that have been carrying out less than 243 flights in three subsequent four-month periods or flights with total emissions below 10,000 tonnes of carbon dioxide per year are small emitters according to Annex XIV Section 4 of the Monitoring Guidelines. As commercial small emitters are not subject to emissions trading, the small emitters figuring in this report are without exception non-commercial small emitters. Theese may use a simplified procedure to determine their fuel consumption by using an estimation tool approved by the European Commission. At the time of publication of this report, the Small Emitters Tool provided by EUROCONTROL was the only such tool approved by the European Commission. It attributes specific fuel consumption estimation values to various types of aircraft, which are used to estimate fuel consumption of those aircraft per distance unit. The estimated fuel consumption is calculated by multiplying the estimated consumption with the flight distance. The tool also automatically calculates the associated carbon dioxide emissions. In contrast to the regular procedure, thus no calculation methodology must be chosen for fuel consumption, and no methodological commitment must be made regarding the determination of fuel density and uncertainty evaluation. For an analysis regarding the actual use of the simplified procedure for small emitters by operators see also Chapter 5.3.2. The simplified procedure allows small emitters to keep administration costs for reporting (which is be relatively high compared to the small size of the operaotor and his minor level of emissions) as low as possible.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 29 5.3.2 Application of the simplified procedure and type of payload for small emitters The following table gives an overview of small emitters under the administration of Germany, i.e. the DEHSt, which have been receiving a free allocation of emission allowances.
Table 10: Overview of Small Emitters administered by Germany Simplified Percentage of Number of Procedure Type of Payload Size – Number of Flights Operators in Total Operators applied Number No Passenger 10 - 50 Flights p.a. 1 1.39% transport 50 - 150 Flights p.a. 6 8.33% 150 - 500 Flights p.a. 2 2.78% More than 500 Flights p.a. 1 1.39% Passenger transport subtotal 10 13,89% Subtotal 10 13,89% Yes Passenger and 150 - 500 Flights p.a. 1 1.39% cargo transport Passenger and cargo subtotal 1 1,39% Passenger < 10 Flights p.a. 4 5.56% transport 10 - 50 Flights p.a. 16 22.22% 50 - 150 Flights p.a. 17 23.61% 150 - 500 Flights p.a. 18 25.00% More than 500 Flights p.a. 6 8.33% Passenger transport subtotal 61 84.72% Subtotal 62 86.11% Total 72 100%
More than 85 percent (62 out of 72) of small emitters use the simplified procedure. Over 98 percent (71 out of 72) do not carry out cargo flights.
10 1
Passenger transport
Cargo and passenger yes transport 62 no 71
Figure 22: Simplified procedure used by small emitters (left) and type of payload (right)
30 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 It is striking that the majority of aircraft operators (72 out of 129 or 55.8 percent) receiving free allocations from the DEHSt are small emitters, as defined in the Monitoring Guidelines. They receive, however, no more than 0.00004 percent of the 2012-2020 allocation (see also Chapter 3.2.2).
5.3.3 Financial burden on small emitters When comparing the volume of free emission allowance allocated with emissions caused in 2010, it becomes clear that small emitters have the lowest cover ratio by far – usually below ten percent (see Chapter 5.1). One of the reasons is the business aviation model described in Chapter 2.1.1 that applies to small emitters practically with no exception. The business model has the purpose of providing fast, tailor-made connections on a regional scale in order to cut travel times, meeting the needs of internationally linked value-added-creating chains. Its benefits (e.g. saving time, flexibility) are such that passengers, respectively their employers, are willing to pay high prices for such flights. From a fuel efficiency perspective, however, this mode of transport has considerable drawbacks. Even not considering frequent empty flights and underutilised capacity, the aircrafts usually operated in this business model achieve a lower transport performance per tonne of fuel used. Thus, from a climate protection perspective, the low cover ratios for small operators are desirable in order to generate a corresponding price signal. Aircraft operators causing higher external costs (carbon dioxide emissions per passenger) than their competitors must sell their services at a higher price, due to higher cost (aviation emission allowances). In addition, the imputation of fixed cost and economies of scale will only have a limited effect, as the number of flights per operator is low. Fixed costs are only spread over a small number of flights, which, in turn, will increase the price further. In comparison with other operational costs (e.g. fuel, staff), the additional cost of emission allowances – an internalisation of external carbon dioxide costs – continues to be moderate, however.
5.4 EXTENT OF BURDEN ON END CONSUMERS The expected increase in costs depends on the definition of what costs are. Even freely allocated emission allowances have a nominal value (opportunity costs), although accounting costs for airlines only arise from the allowances they really have to purchase.To what extent these costs can be passed on to the passenger depends on various factors (such as the market and competitive situation) and a final answer cannot yet be given. Table 11 shows the expected additional costs per passenger for three examples. A market price for an aviation emission allowance is assumed within a price corridor, it is further assumed that the entire free allocation is used to lower the offering price. Further costs related to emissions trading (e.g. transaction costs) are not taken into account and can be neglected for operators with a high number of flights (Imputation of fixed costs/economies of scale).
Table 11: Examples of Carbon Dioxide Emissions and additional costs per passenger resulting from aviation emission allowances for a single flight181920
Market Price Carbon Dioxide Cost per Distance Aviation Free Allocation Example Flight Emissions per Passenger (km) Emission (percent)20 Passenger(t)18 (EUR) Allowance19
Munich – Hamburg 1,200 0.075 7.50 – 12.50 72.91 0.15 - 0.25 Berlin – Faro 2,390 0.215 7.50 – 12.50 72.91 0.44 - 0.73 Frankfurt – Singapore 10,266 0.742 7.50 – 12.50 72.91 1.51 - 2.51
18 ICAO Emissions Calculator of 06/01/2012 19 By comparison: European Energy Exchange, EUA Primary Auction Spot, 03/01/2012: 6,31 EUR 20 Unweighted geometric mean of the free allocation cover ratio (Allocation in 2012 to emissions in 2010) for all aircraft operators carrying out commercial passenger transport and operating more than 3,650 flights per year subject to emissions trading
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 31 5.5 MEASURING REGULATION INDUCED EFFECTS ON COMPETITION There are significant differences in the cover ratio of free allocations of aviation emission allowances per aircraft operator, due to the benchmark approach (see Chapter 5.1). Provision with free aviation emission allowances is a measure for changed competitive starting conditions. This section seeks to calculate and present unequal distribution as relative difference andwill illustrate the competitive effect of the distribution because additional financial burdens will vary between operators due to the differences in cover ratio. Not all operators will experience the same rise in cost (parallel shift), but emission-intensive aircraft operators must shoulder relatively higher additional cost than carbon dioxide-efficient operators. The analysis will use statistical methods for measuring concentration, e.g. the Lorenz curve (Fig. 23) and Gini coefficient.
Lorenz Curve and Gini Coefficient The cover ratio is calculated for each operator (volume of free allocation 2012 vs. 2010 emissions). The cover ratio of the operator is then related to the sum of all cover ratios. By normalisation the sum of the cumulative shares of the cover ratio of all operators adds up to one. While these cumulated shares have been entered by size on the ordinate (small to large), operators have been entered on the abscissa at constant intervals. Again they are normalised to one. This results in a Lorenz curve (Figure 23). Each point on the Lorenz curve indicates the proportion allocated to the x percentage of operators (e.g. 20 percent) with the lowest cover ratio out of the total allocation. The area between the main diagonal and the Lorenz curve thus provides a measure for the concentration, i.e. the unequal distribution of an insufficient cover ratio, with two extremes: The distribution is equal if the Lorenz curve runs along the main diagonal. By contrast, a Lorenz curve filling the entire area below the main diagonal indicates maximum concentration and thus maximum inequality. It makes therefore sense to use the ratio of the area between main diagonal and Lorenz curve and the area of the triangle below the main diagonal to measure concentration (Gini coefficient)21.
1
0,9
0,8
0,7
0,6 Cumulated shares of total cover ratios
0,5 Lorenz curve Main diagonal Commercial operators 0,4
0,3
0,2
0,1
0 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1
Cumulated shares of aircraft operators
Figure 23: Free allocation cover ratio (Lorenz curve) for commercial and non-commercial aircraft operators
21 Plotting the Lorenz curve is essential in the following graphs because several Lorenz curves may relate to the same Gini coefficient.
32 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 For the Lorenz curve in Figure 23, the Gini coefficient is 60 percent. This is a high concentration, in other words, a very unequal distribution of insufficient cover ratios. Since such inequality is intended by the benchmark approach, this result indicates that the regulatory objective has been achieved (see 5.2). However, the result does not answer our initial question regarding the competitive effect of differences in cover ratio. In order to quantify the competitive effects, the two major aviation markets must be looked at separately. It cannot be assumed that non-commercial aviation passengers would create demand in the commercial aviation market and vice versa. What is the competitive effect in the respective markets? The Lorenz curves for the non-commercial and commercial aviation markets are shown in Figures 24 and 25 respectively.
1 1
0,9 0,9
0,8 0,8
0,7 0,7
0,6 0,6 Cumulated shares of total cover ratios Cumulated shares of total cover ratios
0,5 0,5 Lorenz curve Lorenz curve Main diagonal Main diagonal 0,4 0,4
0,3 0,3
0,2 0,2
0,1 0,1
0 0 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1
Cumulated shares of aircraft operators Cumulated shares of aircraft operators
Figure 24: Free allocation cover ratio Figure 25: Free allocation cover ratio (Lorenz curve) for non- (Lorenz curve) for commercial commercial aircraft operators aircraft operators Comparing Figures 24 and 25, it would appear that inequality of distribution (Gini coefficient of 30 percent) is higher for non-commercial aircraft operators than for commercial operators (Gini coefficient of 22 percent). The change in competitive conditions induced by the introduction of emissions trading and varying cover ratios is more significant in non-commercial than in commercial aviation. This is due to more varied business structures in the non-commercial compared to the commercial sector. More significant is the fact that within both markets, there seems to be little inequality in the distribution of burdens (small Gini coefficient in each case). To sum up, inequalities within the respective markets are moderate and unlikely to bring about fundamental changes in the supplier structure, as the competitive effect is low. The analysis of cover ratios highlights the existing potential for emission reduction in both markets. The future will show whether the allocation by benchmark will generate strong enough incentives to achieve the desired effect in terms of climate policy.
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 33 6 FINAL COMMENTS The scope of the Emissions Trading Directive and the TEHG, the allocation scheme and the resulting distribution of free allocations have been discussed from various angles. Generating scarcity of emission allowances is a clear objective of the Emissions Trading Directive, and the objective has been achieved. However, the question remains whether the overall distribution effects conform to the objective of the Directive. The free allocation of emission allowances on the basis of a single benchmark inevitably brings about inequal distribution between market participants, due to the differences between the respective business sectors. As far as business aviation is concerned, the question can be answered in the affirmative because an effort has been made to include these small emitters in the scheme in the absence of other regulatory measures. Because of the basis on which the benchmark was calculated, free allocations could be expected to be low. However, whether the above-average allocation to cargo airlines, often beyond their requirements for 2010 emissions, serves the intended purpose is doubtful. The over-allocation is a result of the reasoning behind the allocation policy, as the allocation volume was determined by transport performance (flight distance and payload) in 2010 and at 100 kg per person, the standard rate for passenger aviation was set too low in comparison to cargo aviation. In passenger aircraft, the maximum payload is limited by the cabin volume and the number of seats available, whereas dedicated cargo aircraft reach their maximum payload during regular flight operations. While in many cases, there is no alternative to transporting people rapidly over long distances, this applies only to a smallish proportion of air cargo. Although the safe and rapid transport of urgently needed technical equipment or medical products can be crucial, there is no need to support cargo aviation by special subsidies. From an environmental policy perspective, the relative privilege cargo aviation enjoys is not helpful. However, this is only a minor point because the protective effect for the climate does not depend on individual allocations, but on the total volume (cap) of available allowances.
34 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020
231 138 523 648 ] 2 1855 5225 96436 414741 514961 285171 976350 249726 1341247 4099568 2010 2010 [tCO Emissions 45
118 843 226 326
1975 448799 for for 3084180 2105400 [EAs] 5361392 Total Total Total 6286282 6047883 9980890 28759739 2012-2020 2012-2020 Allocation Allocations 5 13 93 25 36 218 49545 591869 667654 232425 693972 340477 2020 [EAs] 1101837 3174922 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2019 2019 [EAs] 1101837 3174922 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2018 2018 [EAs] 1101837 3174922 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2017 2017 [EAs] 1101837 3174922 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2016 2016 [EAs] 1101837 3174922 Allocation 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2015 2015 [EAs] 1101837 3174922 5
13 93 25 36 218 49545 591869 667654 232425 693972 340477 2014 2014 [EAs] 1101837 3174922 5 13 93 25 36
218 49545 591869 667654 232425 693972 340477 2013 [EAs] 1101837 3174922 5
14 99 26 38 231 52439 706651 246000 626440 734506 360364 2012 2012 [EAs] 1166194 3360363 Origin Country of Deutschland Deutschland Mexiko Russland Deutschland Deutschland Kasachstan Deutschland China China Russland Schweiz Deutschland Deutschland - Operator ACG AIR CARGO ACG WürthAdolf GmbH & Co. KG s.a Personal Aero de c.v. - Russian Aeroflot Airlines AEROLOGIC GMBH AIR 1 AVIATION GMBH Air Astana JSC Air Berlin PLC & Co. Luftverkehrs KG Air China Cargo Co., Ltd Air China Limited AirBridgeCargo Airlines LLC AIRCRAFT LS MNGMT GmbH Air-Service Airtrans Flug zeugvermietungs GmbH APPENDIX LIST ALLOCATION EU-ID 34963 3647 6802 156 35126 34266 28844 8221 33133 786 32419 34984 22317 21756
Nr. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 7 7.1
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 35
615 170 331 460 322 728 250 357 233 ] 2 2587 3804 41369 736795 592480 2010 2010 [tCO Emissions 45
163 164 109 199 154 136 380 209 643
1812 257821 for for 5184172 [EAs] 6746685 Total Total Total 2012-2020 2012-2020 Allocation Allocations 5 17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2020 [EAs] 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2019 2019 [EAs] 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2018 2018 [EAs] 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2017 2017 [EAs] 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2016 2016 [EAs] Allocation 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2015 2015 [EAs] 5
17 18 18 15 12 71 42 22 23 200 28462 744798 572305 2014 2014 [EAs] 5 17 18 18 15 12 71 42 22 23
200 28462 744798 572305 2013 [EAs] 5
18 16 19 13 44 23 25 20 75 212 30125 788301 605732 2012 2012 [EAs] Origin Country of Schweiz Deutschland USA Ägypten Korea Deutschland USA Türkei Deutschland USA Deutschland Deutschland Deutschland Deutschland - - - Operator AL HOKAIR AVIATION ARCAS GMBH Archer Daniels Midland Company AIR ARTOC Asiana Airlines ASW AIR-SERVICE WERKFLUG DIENST GMBH & KG CO. Inc. Air, Atlas Airlines Atlasjet BAUS BAHAG HANDELSGESELL ZUG/ SCHAFT AG SCHWEIZ ZWEIG NIEDERLASSUNG MANNHEIM CORP BALL SE BASF Bauhaus Gesellschaft für Bau- und Hausbedarf mbH & Co. Blue Sky Airservice GmbH BMW AG EU-ID 30361 33706 8901 27073 19480 f11211 20979 27868 516 30586 509 25978 23956 14658 Nr. 15 16 17 18 19 20 21 22 23 24 25 26 27 28
36 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020
506 652 552 295 845 220 875 ] 2 4979 26976 38789 26790 126515 1539947 5380029 2010 2010 [tCO Emissions 54
317 109 127 136 271 688 553
61932 12663 188633 568650 for for [EAs] Total Total Total 11965288 39952517 2012-2020 2012-2020 Allocation Allocations 6 14 61 15 76 12 35 30 1398 6837 62776 20824 2020 [EAs] 4410545 1320904 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2019 2019 [EAs] 4410545 1320904 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2018 2018 [EAs] 4410545 1320904 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2017 2017 [EAs] 4410545 1320904 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2016 2016 [EAs] 4410545 1320904 Allocation 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2015 2015 [EAs] 4410545 1320904 6
14 61 15 76 12 35 30 1398 6837 62776 20824 2014 2014 [EAs] 4410545 1320904 6 14 61 15 76 12 35 30
1398 6837 62776 20824 2013 [EAs] 4410545 1320904 6
16 31 15 13 80 37 65 1479 7236 22041 66442 2012 2012 [EAs] 4668157 1398056 Origin Country of USA USA Deutschland Deutschland Moldau Schweiz Schweiz Deutschland Deutschland Kroatien Deutschland Deutschland USA USA - Operator BOMBARDIER BOMBARDIER AEROSPACE Bombardier PreOwned Bombardier Transportation GmbH Bundespolizei- Fliegergruppe CA ‘AIR IS MOLDOVA’ Chai Ltd. Aero Challenge AG Cirrus Airlines Luftfahrtgesell schaft mbH CONDOR FLUGDIENST GMBH CROATIA AIRLINES HRVATSKA ZRAKOPLOVNA TVRTKA D.D. DIRECT AIR DAS DC Aviation GmbH DEERE & COMPANY Delta Air Lines, Inc. EU-ID 6667 29389 31614 15176 19823 35021 35418 22448 824 12495 967 26466 30996 4484 Nr. 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 37
817 568 656 498 467 758 405 ] 2 19023 613114 370812 2010 2010 [tCO 17985709 Emissions
118 181 218 172 145 280 262
69369 for for 3543106 [EAs] 2771909 Total Total Total 107521784 2012-2020 2012-2020 Allocation Allocations 16 19 31 13 20 24 29 7658 391140 306004 2020 [EAs] 11869832
16 19 31 13 20 24 29 7658 391140 306004 2019 2019 [EAs] 11869832
16 19 31 13 20 24 29 7658 391140 306004 2018 2018 [EAs] 11869832
16 19 31 13 20 24 29 7658 391140 306004 2017 2017 [EAs] 11869832
16 19 31 13 20 24 29 7658 391140 306004 2016 2016 [EAs] 11869832 Allocation
16 19 31 13 20 24 29 7658 391140 306004 2015 2015 [EAs] 11869832
16 19 31 13 20 24 29 7658 391140 306004 2014 2014 [EAs] 11869832 16 19 31 13 20 24 29
7658 391140 306004 2013 [EAs] 11869832
17 14 21 26 20 32 30 8105 413986 323877 2012 2012 [EAs] 12563128 Origin Country of Deutschland Deutschland Deutschland Deutschland Deutschland USA Deutschland Deutschland USA Schweiz Schweiz Operator DELTA DELTA TECHNICAL SERVICES LTD Deutsche Lufthansa AG DH FLUGCHARTER GMBH DR. AUGUST OETKER KG HANDEL DULCO GMBH de E.I. du Pont and Nemours Company LEIPZIG EAT GMBH EBM-PAPST MULFINGEN KG GMBH & CO. EVERGREEN AIRLINES FANCOURT FLUGCHARTER KG GmbH & CO Farnair Switzerland AG EU-ID 8980 1776 f10589 2044 28795 8082 36121 24568 3639 28589 8272 Nr. 43 44 45 46 47 48 49 50 51 52 53
38 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020
330 405 665 649 ] 1313 2 17991 22788 182730 146485 792839 544022 2010 2010 [tCO Emissions
118 281 254 290 263
19711 189874 692225 for for 1154033 [EAs] Total Total Total 4266728 4850080 2012-2020 2012-2020 Allocation Allocations 31 13 28 32 29 2176 76418 20961 471024 127399 535423 2020 [EAs]
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2019 2019 [EAs]
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2018 2018 [EAs]
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2017 2017 [EAs]
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2016 2016 [EAs] Allocation
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2015 2015 [EAs]
31 13 28 32 29 2176 76418 20961 471024 127399 535423 2014 2014 [EAs] 31 13 28 32 29
2176 76418 20961 471024 127399 535423 2013 [EAs]
14 31 30 33 34 2303 22186 80881 134841 498536 566696 2012 2012 [EAs] Origin Country of Russland Deutschland Deutschland Deutschland Deutschland Deutschland Deutschland Deutschland Deutschland Deutschland Deutschland - - - - Operator FEDERAL STATE FEDERAL STATE UNITARY ENTERPRISE ‘STATE TRANSPORT COMPANY RUSSIA’ Firma Steiner- Film Flugbereitschaft des Bundesminis der Vertei terium digung (FlBschft BMVg) Fresena Flug GmbH & Co KG GERMANIA FLUG GESELLSCHAFT MBH Germanwings GmbH AG HANSGROHE Hapag-Lloyd Express GmbH Hapag-Lloyd Fluggesellschaft mbH HeidelbergCe ment AG Herrenknecht GmbH Aviation EU-ID 23244 14557 1778 32678 9243 28944 26105 4703 1389 32953 33269 Nr. 54 55 56 57 58 59 60 61 62 63 64
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 39
162 688 528 700 944 ] 2 3596 62720 139132 237155 185533 124626 2041034 2010 2010 [tCO Emissions 37 37
371 372 272
1295 325160 465521 for for 1138851 1291240 [EAs] 1220784 Total Total Total 17557994 2012-2020 2012-2020 Allocation Allocations 4 4 41 41 30 143 51391 35896 134768 142546 125723 2020 [EAs] 1938309 4 4
41 41 30 143 51391 35896 134768 142546 125723 2019 2019 [EAs] 1938309 4 4
41 41 30 143 51391 35896 134768 142546 125723 2018 2018 [EAs] 1938309 4 4
41 41 30 143 51391 35896 134768 142546 125723 2017 2017 [EAs] 1938309 4 4
41 41 30 143 51391 35896 134768 142546 125723 2016 2016 [EAs] 1938309 Allocation 4 4
41 41 30 143 51391 35896 134768 142546 125723 2015 2015 [EAs] 1938309 4 4
41 41 30 143 51391 35896 134768 142546 125723 2014 2014 [EAs] 1938309 4 4 41 41 30
143 51391 35896 134768 142546 125723 2013 [EAs] 1938309 5 5
43 44 32 151 54393 37992 142640 150872 133067 2012 2012 [EAs] 2051522
Origin Country of Deutschland Türkei Deutschland Iran Serbien Schweiz USA Russland USA Groß- britannien Korea Deutschland Operator HI HAMBURG HI HAMBURG International Luftverkehrs¬ gesellschaft mbH & Co. Betriebs-KG HURKUS HAVAYOLU TASIMACILIK VE TIC A.S. (d.b.a. FREEBIRD AIRLINES) IFM Traviation GmbH IRANAIR Jat Airways JETFLIGHT Inc. AVIATION JOHNSON CONTROLS Joint Stock Ural Company airlines CLARK KIMBERLY CORP GMBH KOMPASS KG & CO. AIR KOREAN LTD. LINES CO., LECH-AIR FLUGZEUG EU-ID 26226 27680 35785 1528 1562 16761 21462 21723 f10653 32568 1652 6383 Nr. 65 66 67 68 69 70 71 72 73 74 75 76
40 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 81 52
174 593 487 263 586 ] 2 1342 69816 34323 30086 130107 492764 1321086 2010 2010 [tCO Emissions 9 18 45
109 109 453 562 235
87468 778851 122922 308040 for for [EAs] Total Total Total 2704352 17189824 2012-2020 2012-2020 Allocation Allocations 1 2 5 12 12 50 62 26 9656 85981 13570 34006 298546 2020 [EAs] 1897665 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2019 2019 [EAs] 1897665 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2018 2018 [EAs] 1897665 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2017 2017 [EAs] 1897665 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2016 2016 [EAs] 1897665 Allocation 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2015 2015 [EAs] 1897665 1 2 5
12 12 50 62 26 9656 85981 13570 34006 298546 2014 2014 [EAs] 1897665 1 2 5 12 12 50 62 26
9656 85981 13570 34006 298546 2013 [EAs] 1897665 1 2 5
13 13 53 66 27 91003 14362 10220 35992 315984 2012 2012 [EAs] 2008504 Origin Country of Deutschland Deutschland Deutschland USA Iran Türkei Montenegro USA USA Deutschland USA Deutschland USA Deutschland - - Operator Liebherr Ge schäftsreiseflug zeug GbR Luftfahrt- Bundesamt Lufthansa Cargo AG Veneer M. Bohlke Corp. MAHAN AIR Havayollari MNG Tasimacilik ve A.S. (MNG Airlines) MONTENEGRO AIRLINES Inc. Nike, NOVELLUS SYSTEMS OBO JET- GMBH CHARTER Omni Air International Ostfriesische Lufttransport GmbH OWENS-CORNING Pacelli- Beteiligungs GmbH & Co. KG EU-ID 28399 15456 3857 24502 21072 25067 24270 12218 29267 567 25059 2073 8236 12648 Nr. 77 78 79 80 81 82 83 84 85 86 87 88 89 90
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 41 69 70
104 190 391 863 875 ] 2 1822 1022 1598 2686 74125 253871 436848 383955 2010 2010 [tCO Emissions 18 46 37 55
154 634 978 209 336 200 235
798979 362427 for for 3155143 3063164 [EAs] Total Total Total 2012-2020 2012-2020 Allocation Allocations 2 5 4 6 17 70 23 37 22 26 108 40010 88203 348311 338157 2020 [EAs] 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2019 2019 [EAs] 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2018 2018 [EAs] 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2017 2017 [EAs] 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2016 2016 [EAs] Allocation 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2015 2015 [EAs] 2 5 4 6
17 70 23 37 22 26 108 40010 88203 348311 338157 2014 2014 [EAs] 2 5 4 6 17 70 23 37 22 26
108 40010 88203 348311 338157 2013 [EAs] 2 6 5 7
18 74 25 40 24 27 114 93355 42347 368655 357908 2012 2012 [EAs]
Origin Country of Türkei USA Groß- britannien USA Deutschland USA Korea Deutschland Deutschland Russland Türkei Deutschland Deutschland Deutschland Bermuda (UK) Operator PEGASUS HAVA PEGASUS HAVA TASIMACILIGI A.S. Pentastar LLC Aviation, UK LTD RENTAIR Rhema Bible Church BoschRobert GmbH INTL RYAN AIRLINES Samsung Techwin Co., Ltd. SAP AG SCHNEIDER THOMAS SIBERIA AIRLINES Hava SIK-AY A.S. Tasimacilik SM AVIATION SMS Aviation GmbH Spirit of Spices GmbH AVIATION STAR (G) EU-ID 10690 775 f11900 27446 606 9200 24784 18991 32741 21734 27735 31870 32544 29841 29368 Nr. 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105
42 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 65
777 970 300 ] 2 2224 17842 87676 176036 178039 549525 1072381 2613397 1423686 1467299 2010 2010 [tCO Emissions 45
145 743 254 254
49975 836916 562581 for for 1518996 4403319 [EAs] Total Total Total 9023950 11186002 17313988 10762385 2012-2020 2012-2020 Allocation Allocations 5 16 28 28 82 5517 62106 92391 486103 996196 167689 2020 [EAs] 1188110 1911372 1234875 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2019 2019 [EAs] 1188110 1911372 1234875 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2018 2018 [EAs] 1188110 1911372 1234875 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2017 2017 [EAs] 1188110 1911372 1234875 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2016 2016 [EAs] 1188110 1911372 1234875 Allocation 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2015 2015 [EAs] 1188110 1911372 1234875 5
16 28 28 82 5517 62106 92391 486103 996196 167689 2014 2014 [EAs] 1188110 1911372 1234875 5 16 28 28 82
5517 62106 92391 486103 996196 167689 2013 [EAs] 1188110 1911372 1234875 5
17 30 30 87 5839 97788 65733 177484 514495 2012 2012 [EAs] 2023012 1054382 1307002 1257505 Origin Country of Ukraine Deutschland Israel Türkei Thailand Deutschland Kanada Deutschland Türkei USA USA USA Russland Bermuda (UK) Operator STATE STATE ENTERPRISE ANTONOV DESIGN BUREAU Reise- Südzucker Service GmbH SUN D’OR INTERNATIONAL AIRLINES LTD SunExpress (Günes Ekspres A.S.) Havacilik Thai Airways International Public Company Limited Thyssenkrupp Dienstleistungen GmbH Tidnish Holdings Limited TUIfly GmbH Turkish Airlines THY Parcel United Service Co US Airways, Inc. USAA Aviation, UTair jsc JETS VACUNA LIMITED EU-ID 15526 12878 28362 10201 2681 14993 31353 2758 8960 4692 f10464 26886 31669 Nr. 106 107 108 109 110 111 112 113 114 115 116 117 118 119
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 43
183 276 225 ] 2 1326 14804 232809 2010 2010 [tCO Emissions 40197 547754 97090 1822
108 135 127 843
8877 for for 1185356 [EAs] Total Total Total 2012-2020 2012-2020 Allocation Allocations 291200 6022256 766278 1866 14 15 12 93 980 130857 2020 [EAs] 32147 664825 84593 206
14 15 12 93 980 130857 2019 2019 [EAs] 32147 664825 84593 206
14 15 12 93 980 130857 2018 2018 [EAs] 32147 664825 84593 206
14 15 12 93 980 130857 2017 2017 [EAs] 32147 664825 84593 206
14 15 12 93 980 130857 2016 2016 [EAs] 32147 664825 84593 206 Allocation
14 15 12 93 980 130857 2015 2015 [EAs] 32147 664825 84593 206
14 15 12 93 980 130857 2014 2014 [EAs] 32147 664825 84593 206 14 15 12 93
980 130857 2013 [EAs] 32147 664825 84593 206
15 15 12 99 1037 138500 2012 2012 [EAs] 34024 703656 89534 218 Origin Country of Deutschland Russland Deutschland Deutschland Deutschland Deutschland Ukraine USA Deutschland Deutschland Operator VIESSMANN WERKE GMBH & KG CO. Volga-Dnepr Airlines LLC AG VOLKSWAGEN WEKA Flugdienst GmbH Wheels Aviation Ltd. GMBH WIRTGEN WIZZAIR UKRAINE LLC AIRWAYS WORLD XL Airways GmbH Germany ZEMAN FTL EU-ID 2833 18671 2840 1323 30605 27514 34169 2930 31769 5960 Nr. 120 121 122 123 124 125 126 127 128 129
44 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 7.2 ABBREVIATIONS AND ACRONYMS Abbreviation/Acronym Term in Full AOC Air Operator Certificate
CO2 Carbon dioxide DEHSt Deutsche Emissionshandelsstelle (German Emissions Trading Authority) EA/a Emission Allowances per annum EU European Union EUR Euros (currency) EUROCONTROL European Organisation for the Safety of Air Navigation IBAC International Business Aviation Council ICAO International Civil Aviation Organization km Kilometres MTOM Maximum Takeoff Mass t Tonne
t CO2/a Tonne of carbon dioxide per annum TEHG Treibhausgas-Emissionshandelsgesetz (Greenhouse Gas Emissions Trading Act)
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 45 7.3 LIST OF ILLUSTRATIONS Figure 1: Simplified Aviation Classification from an Emissions Trading Perspective...... 7 Figure 2: Degree of inclusion in emissions trading (blue colour indicates exemption from emissions trading)...... 10 Figure 3: Status of assigned aircraft operators, based on List of Administering Member States...... 11 Figure 4: Number of flights with allocation-relevant transport volume according to the aircraft operator’s country of origin ...... 12 Figure 5: Number of airline operators receiving free allocation, sorted according to country of origin...... 13 Figure 6: Proportions of commercial and non-commercial aircraft operators receiving free allocation (left) and their respective share of the total transport volume for the reporting year 2010 (right)...... 13 Figure 7: Box-Whisker-Plot showing the average distance of flights by all aircraft operators receiving free allocations for the reporting year 2010...... 14 Figure 8: Box-Whisker-Plot showing the number of flights per aircraft operator receiving free allocation in 2010 (logarithmic scaling)...... 15 Figure 9: Timeline - Dates relating to emissions trading in aviation...... 17 Figure 10: Payload transported by commercial and non-commercial operators receiving free allocation...... 18 Figure 11: Box-Whisker-Plot showing allocation volumes per aircraft operator for the 2012-2020 period (logarithmic scaling)...... 19 Figure 12: Distribution frequency of allocation volumes for non-commercial operators receiving free allocation...... 20 Figure 13: Distribution frequency of allocation volumes for commercial operators receiving free allocation...... 20 Figure 14: Cumulative frequency distribution of the 2012-2020 allocation...... 21 Figure 15: Absolute and relative share of the total 2012-2020 allocation, sorted according to the aircraft operators‘ country of origin...... 22 Figure 16: Average transport performance of non-commercial and commercial aircraft operators receiving free allocation (logarithmic scaling) ...... 23 Figure 17: Allocation volume and reported emissions (*non-verified estimate by EUROCONTROL, **no data available, ***verified emissions reports)...... 25 Figure 18: Emissions per tonne-kilometre – all operators...... 25 Figure 19: Emissions per tonne-kilometre – comparison of commercial and non-commercial operators...... 26 Figure 20: Cover ratio - comparison of allocation and emission proportions...... 27 Figure 21: Cover ratio of 2010 emissions – comparison cargo– cargo and PAX – PAX...... 29 Figure 22: Simplified procedure used by small emitters (left) and type of payload (right) ...... 30 Figure 23: Free allocation cover ratio (Lorenz curve) for commercial and non-commercial aircraft operators ...... 32 Figure 24: Free allocation cover ratio (Lorenz curve) for non-commercial aircraft operators ...... 33 Figure 25: Free allocation cover ratio (Lorenz curve) for commercial aircraft operators...... 33
46 Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 7.4 LIST OF TABLES Table 1: Main results...... 6 Table 2: Internationally established Definitions in the Context of Aviation Classification...... 7 Table 3: Simplified and abridged List of Flights outside the Scope of TEHG ...... 9 Table 4: Classification according to average flight distance per aircraft operator receiving free allocation ...... 14 Table 5: Commercial and non-commercial Operators, sorted according to Number of Flights carried out ...... 16 Table 6: Total Allocation 2012-2020 for commercial and non-commercial Aircraft Operators...... 19 Table 7: Emissions 2007-2008 and 2010 – Operator Status and Size...... 24 Table 8: Comparison Allocation Volume and Emissions– commercial and non-commercial...... 27 Table 9: Comparison of Allocation Volume and Emissions -cargo- and passenger transport...... 28 Table 10: Overview of Small Emitters administered by Germany...... 30 Table 11: Examples of Carbon Dioxide Emissions and additional costs per passenger resulting from aviation emission allowances for a single flight ...... 31
Allocation of Emission Allowances to Aircraft Operators for Trading Periods 2012 and 2013-2020 47 German Emissions Trading Authority (DEHSt) at the Federal Environment Agency Bismarckplatz 1 14193 Berlin
Internet: www.dehst.de/EN E-Mail: [email protected]