EU emissions trading system and aviation—obligations, enforcement and practical considerations
Produced in partnership with Norton Rose Fulbright
EU emissions trading system and aviation—obligations, enforcement and practical considerations

The following Banking & Finance guidance note Produced in partnership with Norton Rose Fulbright provides comprehensive and up to date legal information covering:

  • EU emissions trading system and aviation—obligations, enforcement and practical considerations
  • Principal obligations of an aircraft operator
  • Aviation allowances
  • Allocation of free aviation allowances in the UK
  • Surrender of allowances and shortfall
  • Non-compliance by an aircraft operator and enforcement of the EU ETS
  • Practical considerations for lessors, lessees and financiers

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This will have an impact on the information in this Practice Note. For more information, see Practice Note: Brexit—impact on finance transactions—Lending—key issues for aviation finance.

Aviation has been included in the EU emissions trading system (EU ETS) since 2008, with the first full compliance year being 2012. The inclusion of aviation in the scheme creates obligations for aircraft operators and the scheme applies to different extents depending on whether the flight concerned is, broadly speaking, within the EU or to and from the EU. Failure to comply with the scheme can result in civil penalties or