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The German Emissions Trading Authority at the Federal Environment Agency (UBA) is the national body entrusted with implementing the market-based mechanisms for climate protection set out in the Kyoto Protocol: Emissions Trading, Joint Implementation (JI) and The Clean Development Mechanism (CDM). The DEHSt is also responsible for the execution of emissions trading in the aviation sector and has already begun implementing the system in Germany. Aviation will be included in the EU emissions trading scheme as of 2012. The deadline for airlines to submit their monitoring plans expired at the end of last year.

Lufthansa Consulting spoke to Dr. Jürgen Landgrebe, Head of Department E2 “Energy Sector Allocations, Reserve Management and Registry”, DEHSt.

Lufthansa Consulting: Dr. Landgrebe, has your authority finalized the collection and approval of the monitoring plans?

Dr. Landgrebe: Yes, the deadlines– both the official deadline on 20 October 2009 and the additional grace period of six weeks – have expired. But we are still in the process of approving the monitoring plans submitted by a few operators. In the case of more than 50% of the airlines that submitted monitoring plans to us we required additional information about individual points. Through this dialogue with the aircraft operators we have succeeded in developing a joint understanding of how to measure, transfer and store data transparently and comprehensively. Our aim is to constantly improve the quality of the monitoring plans in cooperation with the airlines. Until 1 January 2012, the date on which mandatory emissions trading will start and airlines will have to surrender emissions allowances or buy allowances needed to cover their extra emissions, all those concerned are on a learning curve. In most cases, the emissions reports that will have to be submitted for the first time at the beginning of 2011 will probably therefore need to be further optimized.

Lufthansa Consulting: What did the DEHSt focus on when reviewing the monitoring plans?

Dr. Landgrebe: It is particularly important for the DEHSt to understand how data is collected in a company in accordance with the monitoring guidelines and how this data is checked and stored. The data processes within a company must also be described transparently and comprehensibly in the monitoring plans.

Lufthansa Consulting: When you were scrutinizing the monitoring plans did you use a standardized template?

Dr. Landgrebe: The monitoring plans submitted by the major airlines differed widely in terms of their approach, and the documentation was very extensive in some cases. An individual analysis of the data provided by the respective airline was essential. Many aircraft operators submitted rather general, standardized information. But this information was not always transparent enough for us and so here, too, we had to make further enquiries about how the relevant processes within the company are specifically organized.

Lufthansa Consulting: What were the most common deficiencies in the monitoring plans submitted?

Dr. Landgrebe: In many cases, information about the monitoring method was perhaps not specific enough or it was even contradictory. Deficiencies often occurred where no data was available for certain flight movements and had to be estimated. When so-called “data gaps” occur, the data protection process must be described in such a way that we can understand and it must also be applied uniformly. If that is not the case, data gaps lead to data inconsistencies and/or data misuse.

Lufthansa Consulting: In future, EUROCONTROL’s computer-aided support facility PAGODA will be used in order to close these data gaps. Is PAGODA ready to market?

Dr. Landgrebe: EUROCONTROL has developed the computer-aided PAGODA system into a so-called EU ETS Support Facility Tool. Work is still in progress. Two weeks ago, the authorities in the administering member states held another workshop on this topic in Brussels. The tool is intended to be used predominantly by small emitters who can estimate their fuel consumption by using EUROCONTROL data as part of a simplified procedure. (Aircraft that have fewer than 243 flights in each of three consecutive four-month periods or total annual emissions of less than 10,000 CO_2, are referred to as small emitters and can use simplified procedures.)

Large emitters can only use EUROCONTROL data in exceptional circumstances. However, this tool also provides a good opportunity to validate internal company procedures and calculations. In future, it will also serve the authorities as a tool for validating the emissions reports of individual airlines on the basis of EUROCONTOL data.

Lufthansa Consulting: How many airlines have failed to submit monitoring plans despite the grace period?

Dr. Landgrebe: Despite the grace period, about 100 aircraft operators have not submitted monitoring plans. But these airlines are smaller operators and, taken together, generate much less than 3% of total emissions. The good news is that all large airlines have submitted their plans and together they account for 97% of total CO₂ emissions. This can definitely be seen as a positive signal. We are currently examining the initial sanctions – i.e. the imposition of a fine – for aircraft operators who have not submitted any monitoring plans.

Lufthansa Consulting: Is there such a thing as a “blacklist” of airlines that have not submitted their monitoring plans?

Dr. Landgrebe: No. Public disclosure is only planned if airlines fail to comply with the obligation to surrender emissions allowances from 2012 onwards. Sanctions for failure to submit monitoring plans are currently regulated in different ways at a national level. For example, the competent authority in the UK already has more stringent sanctioning powers than the DEHSt in Germany. Ultimately, different national legislation should lead to a standard European solution. As far as the imposition of sanctions is currently concerned, there needs to be a sense of proportion. Sanctions such as, for example, banning airlines from landing in the European Union must then really take effect if they fail to comply with the obligation to surrender a sufficient amount of emissions allowances to cover their emissions after 1 January 2012.

Lufthansa Consulting: Since 1 January 2010, airlines have been obliged to record their tonne-kilometers and emissions. This data must be verified at the end of the year. Is there an official list of accredited verifiers in the aviation sector?

Dr. Landgrebe: No. However, accredited environmental experts who are certified for the aviation sector can be registered with us. The preparations are currently being made by the competent authority responsible for accrediting experts in line with the Commercial Code, so-called Chamber of Industry and Commerce (IHK) experts. The first aviation experts are expected to be appointed by the Chambers of Industry and Commerce in the summer of 2010. At that point, we will publish a list of the aviation experts on the DEHSt homepage (www.dehst.de).

Lufthansa Consulting: On which other tasks within the EU ETS is the DEHSt focusing particularly intensively at the moment?

Dr. Landgrebe: We are currently working at full steam on software for reporting that will enable simple and standardized reporting by ETS. The project plan envisages the software being available at the end of the year. We will also provide accompanying documents (e.g. guidelines on reporting) to support the airlines and explain how they should use the software. This is a standard service provided by the DEHSt, which we also always offer for stationary installations.

Lufthansa Consulting: Do you think there will be a bottleneck in the verification of the first emission reports?

Dr. Landgrebe: Of course I hope that there will not be a bottleneck. We discussed this issue in 2004 when emissions trading was introduced for stationary installations. This is a question that Europe must ask itself. In Germany we have a very well-organized body of experts and so we will probably encounter fewer problems here. In spite of that, there could indeed be a bottleneck since the timeframe within which airlines must compile data and have it verified is relatively small. Things may get tight for airlines that have not processed their data in good time and are not well-organized. Bottlenecks can certainly be reduced if companies prepare well and in advance work with the experts and examine the critical parameters.

Lufthansa Consulting: Do airlines that do not submit a verified tonne-kilometers report within the allocated time risk losing the right to receive free certificates?

Dr. Landgrebe: Yes. The reports must be verified – as laid down in the European directive. If an airline does not submit a verified report, it will forfeit its entitlement to the allocation of free EU emissions allowances. The same applies to reports that are submitted after the deadline (31 March 2011).

Lufthansa Consulting: How do you think the airlines have accepted the introduction of emissions trading?

Dr. Landgrebe: Although some large airlines threatened to protest before the legal deadline for submitting monitoring plans, all the plans have finally been submitted. As long as the airlines affected by the introduction of the EU ETS do not feel at a competitive disadvantage compared with other airlines, the airlines are in favor of trading certificates as a means of reducing CO₂ emissions. There have also been setbacks during the introduction at stationary facilities. But these are all surmountable and we will overcome them by trading emissions in aviation! I am confident of that.

Lufthansa Consulting would like to thank Dr. Landgrebe for the informative interview.