CORSIA UK Implementation Part I: monitoring, reporting and verification

On 18 January 2021 the UK Department for Transport published an open consultation on the first of two statutory instruments that are being proposed in order to implement the ICAO International Standards and Recommended Practices Annex 16 Volume IV (also known as “CORSIA SARPs”) which all contracting states of ICAO are obliged to implement into national legislation. The first statutory instrument relates to the monitoring, reporting and verification of CO2 emissions (“MRV”) and the second will implement the CO2 emissions offsetting obligations of CORSIA. These statutory instruments will be implemented in the UK as Air Navigation orders under Section 60 of the Civil Aviation Act 1982. For a more detailed summary on CORSIA, please see our previous article here, and more recently, please see our webinar on CORSIA rebasing due to COVID-19 here.

The consultation publication contains the draft Order for MRV implementation entitled The Air Navigation (Carbon Offsetting and Reduction Scheme for International Aviation) Order 2021 (the “Order”). We provide a brief summary below of the Order and the MRV obligations it contains for eligible UK aeroplane operators.

Scope of Order and application to aeroplane operators

The proposed scope of application of the Order is as per CORSIA: all civil international aviation undertaken by aeroplane operators for whom the UK is the administering state except for humanitarian, medical and firefighting flights. The UK is considered the administering state for an aeroplane operator where the ICAO Designator of the aeroplane operator identifies the UK as the Notifying State, where the aeroplane operator has a valid UK AOC or where the aeroplane operator has its registered office in the UK. A person is an ‘aeroplane operator’ if they produce annual CO2 emissions greater than 10,000 tonnes from the use of an aeroplane with a maximum certificated take off mass greater than 5,700 kg conducting international flights.

All aeroplane operators administered by the UK conducting international flights must notify the regulator of that fact. An aeroplane operator may designate its administrative duties under the Order to a third party as long as the third party is not the same entity as the verification body. In addition, liability for compliance cannot be delegated.

Attribution of international flights to an aeroplane operator

An aeroplane operator must identify international flights that are attributed to it in accordance with the following rules:

(1) Two or more consecutive flights operated under the same flight number are considered separate flights;

(2) Where the aircraft identification of the flight plan contains the ICAO Designator, the flight is attributed to the aeroplane operator that has been assigned this Designator;

(3) Where the aircraft identification of the flight plan contains the registration mark of an aeroplane that is listed with a valid UK AOC or equivalent, that flight must be attributed to the aeroplane operator that holds that AOC; and

(4) Where none of the above can be identified, the flight is attributed to the aeroplane owner who will then be considered the aeroplane operator.

Monitoring of CO2 emissions

An aeroplane operator that produces annual CO2 emissions greater than 10,000 tonnes from the use of one or more aeroplanes with a maximum certificated take-off mass greater than 5,700kg conducting international flights must monitor and record its fuel use from these international flights. The Order sets out eligible monitoring methods for 2019-2020 and separately for 2021-2035. These monitoring methods involve using either a Fuel Use Monitoring Method or the CO2 Estimation and Reporting Tool (“CERT”) which reflect the emissions monitoring options pursuant to CORSIA SARPs.

It is important to note that the requirement for MRV of CO2 emissions is independent from participation in CORSIA offsetting. All aeroplane operators conducting international flights are required to monitor, report and verify CO2 emissions from these flights as of 1 January 2019. Exemptions set out in CORSIA relating to least developed countries, small island developing states and landlocked developing countries mean that such nations are not mandated to participate in offsetting under CORSIA, however all aeroplane operators in ICAO Member States that produce annual CO2 emissions greater than 10,000 tonnes must participate in MRV. This should be reflected in the second CORSIA implementing Air Navigation Order that will be published by the UK government and consulted on next year.

An aeroplane operator must submit an Emissions Monitoring Plan (“EMP”) to the regulator for approval, and once approval is given the regulator must issue the EMP. Where an aeroplane operator has already submitted and received approval for an EMP pursuant to the EU Implementing Regulation for CORSIA MRV (EU 2019/1603(b)), the regulator will issue an EMP by 30 June 2021 in the same terms subject to any variation needed to comply with the Order.

Under its EMP, an aeroplane operator can claim for emissions reductions from the use of CORSIA eligible fuels that meet the CORSIA Sustainability Criteria and such fuels are from fuel producers that have been certified under CORSIA’s Sustainable Certification Scheme.

Reporting and verification of CO2 emissions

An aeroplane operator must submit to the regulator a verified Emissions Report along with a copy of the Verification Report containing the verification statement and required supporting information from a verification body. All verification bodies must be accredited to ISO 14065:2013(c) (Requirements for Greenhouse Gas Validation and Verification Bodies for use in Accreditation or other forms of Recognition) and meet the requirements of a national accreditation body. The annual emissions must be reported in the Emissions Report as tonnes of CO2 rounded to the nearest whole number. All data per flight must be rounded to the nearest whole number for the purpose of calculating the distance and payload pursuant to reporting the tonne-kilometre data.

There is an ongoing obligation on aeroplane operators to regularly check whether the monitoring methodology they have applied pursuant to their EMP can be improved, particularly where the verification report highlights non-conformities. An aeroplane operator must submit a report on improvements by 30 June of the year in which the verification report is issued addressing the non-conformities including how and when they will be rectified. Where recommended improvements would not lead to an improvement of the monitoring methodology, the aeroplane operator must provide a justification for why that is the case. Where the recommended improvements would incur unreasonable costs, the aeroplane operator must provide evidence of the unreasonable nature of the costs.

The regulator must then submit a state wide report to the Secretary of State who then provides the report to ICAO.

Compliance monitoring and penalties

The regulator may, with reasonable prior notice, inspect any premises in order to monitor compliance with the Order. During such inspections the regulator may install monitoring equipment, request records, take photographs and recordings, and request assistance. The regulator may also enter any premises with a warrant where they believe that there has been a failure to comply with the requirements of the Order. It is an offence to fail to comply with the regulator’s requests pursuant to the powers granted under the Order and such offence is liable on summary conviction in England and Wales to a fine, or on conviction on indictment to a fine.

The regulatory may also issue an information notice requiring a person to provide information for purposes connected with the exercise of functions under the Order. Where the regulator considers that a person has contravened or is likely to convene a requirement under the Order the regulatory may given an enforcement notice requiring that certain steps be taken within a specified time to remedy the contravention.

An aeroplane operator is liable to a civil penalty where they:

a) fail to apply (or apply on time) for an EMP or make a revised application for an EMP where required to do so under the Order;

b) fail to comply with a condition of an EMP;

c) fail to monitor emissions in accordance with its EMP;

d) fail to submit (or submit on time) a verified Emissions Report to the regulator;

e) fail to keep appropriate records as required under the Order (this carries a flat civil penalty of £50,000);

f) fail to comply with an enforcement notice given under the Order;

g) fail to comply with an information notice given under the Order (this carries a civil penalty of £5,000 and a daily penalty of £500 per day until the penalty notice conditions are met up to a maximum of £45,000);

h) provide false or misleading information (this carries a flat civil penalty of £50,000); or

i) do not allow a regulatory to access the premises pursuant to their powers of inspection under the Order (this carries a flat civil penalty of £50,000).

Where a regulator considers that a person is liable to a civil penalty, this is done by issuing a penalty notice. Except as otherwise noted above, the proposed civil penalty under the Order is £20,000 and a daily penalty of £500 per day until the penalty notice conditions are met up to a maximum of £45,000.

Next steps

The consultation on the Order runs until 28 February 2021 following which the government will issue its response and make any changes to the proposed draft before proceeding to advance the draft through the legislative process. The second order relating to offsetting requirements will be consulted on next year with the aim of this entering into force by spring 2022. We will continue to provide updates on this as the legislation advances.

See also: Webinar: State aid and sustainability: what does the future hold for aviation?