The European Union's Emissions Trading System (ETS), which was extended to aviation this month, is discriminatory toward business aviation and still needs substantial work to be viable, the European Business Aviation Association (EBAA) says. The group this week aired a number of concerns it has with the system, which has drawn nearly universal opposition from commercial and business aviation leaders outside of Europe.

EBAA backs the concept of market-based measures as part of a multi-pronged approach to mitigating the increase of carbon emissions and greenhouse gases, but says the ETS treats business aviation unfairly, compared with other modes of air transport.

On average, European business aircraft operators must acquire permits for up to 96% of their historical emissions, versus a 15% requirement for airlines, EBAA says.

The association has had some success persuading European regulators to ease part of the financial burden on small operators by simplifying the reporting and tracking requirements.

But EBAA President Brian Humphries adds, “It is deeply unfortunate that member states have so far decided against coupling the small emitters’ reporting tool with single-point verification. In many cases, for smaller emitters the costs for monitoring and reporting, and particularly verification (MRV), far outweigh the costs linked to acquiring CO2 permits. As such, the MRV procedure threatens to weaken the competitiveness of European business aircraft operators vis-à-vis non-EU competitors and other modes of transport, such as the airlines.”

The requirements have varied by country, and some countries have demanded detailed company information for participation, industry advocates note, citing France among them.

EBAA, however, commended Eurocontrol for implementing its ETS Support Facility tool for small emitter operators, and strongly encouraged all small emitters within the business aviation community to use it, noting, “The tool is only as valuable as the data put into it; the more operators who use it, the more powerful and accurate the reports it produces.”

EBAA also praised the European Court of Justice ruling that ETS does not infringe on international law, ensuring equitable treatment between EU and non-EU stakeholders. But EBAA is concerned that the ruling added fuel to the fire by stirring up a range of protests from non-EU countries, including China and the U.S. The association questions whether the mechanisms put in place by the European Commission to enforce compliance will be robust enough to withstand widespread international resistance.

The group says the coming 12 months will prove crucial for the commission in its quest for international buy-in.

EBAA is also concerned that the timing of ETS implementation could prove financially difficult. “The year 2011, and one expects the year 2012 as well, had and will record negative air transport figures amidst depressed demand and rising operating costs,” says CEO Fabio Gamba. “The ETS adds further costs to an already depressed sector, and its introduction should have at least coincided with the disposal of national tax schemes that have nothing to do with environmental protection.”