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UK issues the first €42m of free CO2 emissions allowances to airlines UK regulators rely on SFW software to manage emissions reporting processes

02 Mar 2012

​Britain has allocated the first free European Union carbon permits to airlines included in the bloc's emissions trading scheme, the Department of Energy and Climate Change (DECC) said yesterday. The UK was also one of the first of the 30 countries in the scheme to publish the number of free allocations it would make to each airline back in October.

The announcement by DECC is that 3 airlines have been given the first 4.9 million aviation emission allowances. The quantity is less than 1% of the total 56.7 million allowances expected to be issued in 2012. The biggest airlines will each receive much larger quantities, for example British Airlines is expected to receive the largest UK allocation of 10.3 million allowances.

DECC’s published plans are to issue permits to 249 of approximately 700 aviation operators that are covered by the EU ETS in the UK. Regulation of these organisations’ compliance with the scheme is done by the Environment Agency for the UK, using ETSWAP software developed by SFW.

On average, the 249 airlines will each receive 1.7 million free allowances, of current value EUR14.7 million. In order to receive the free permits, aviation operators needed to report data to the Environment Agency (EA) on the tonne-kilometres carried during 2010. The data had to be reported and independently verified by an EU-imposed deadline of 31 March 2011. ETSWAP was made live in December 2010 specifically for this purpose.

The EA engaged SFW to specify the workflows and develop the ETSWAP online software application to dramatically reduce the administration required by the Agency to regulate the scheme. ETSWAP automates and simplifies the complex processes for monitoring, reporting, accreditation and verification (MRV) of greenhouse gas emissions. As an additional benefit, it simplifies the reporting processes for emitters and verifiers, and enables clear communication between all parties.

As well as the 700 aviation operators, the EA is responsible for regulating approximately 1000 static emitters of carbon dioxide in the UK, including power generation and heavy manufacturing sites. ETSWAP is also used for this sector, and can be adapted in future to cover new sectors, such as marine operations or agriculture. It is expected that ETSWAP will be adopted by other EU member states over the coming months to simplify their emissions reporting processes and reduce administrative costs.

02/03/2012