The current legal situation allows operators subject to emissions trading within the EU Emissions Trading System 1 (EU ETS 1) to prove their compliance with the sustainability criteria and greenhouse gas reduction obligations with just a recognised proof of sustainability (PoS) in the Nabisy database. A recognised PoS allows the emission factor zero to be claimed for biofuels so far.
When procuring PoS, a common issue arises: manufacturers or suppliers in the upstream chain may already need the PoS themselves for their own obligations such as meeting quota requirements under the ReFuelEU Aviation Regulation ((EU) 2023/2405). A PoS can only be issued once and is therefore frequently no longer available to operators subject to emissions trading for emissions reporting within the EU ETS 1. As part of the 2024 emissions report, aircraft operators may also apply for free emission allowances for their use of eligible fuels by submitting recognised PoS.
The European Commission is currently developing the database system outlined in Article 31a of the Renewable Energy Directive (EU) 2023/2413. This can be used by operators in the sustainable fuels market to ensure seamless traceability of alternative fuels and for the recognition of alternative fuels in the respective target systems. The Union Database (UDB) will enable claiming of the same fuel delivery by fuel manufacturers, suppliers and buyers in accordance with the ReFuelEU Aviation Regulation and within the EU ETS 1. At the same time, it is designed to prevent the same fuel delivery from being double counted by several operators subject to emissions trading.
In the future, aircraft operators should therefore also be able to use the proof provided in the UDB for alternative fuels in emissions trading.
Interim solution
However, the UDB currently lacks the functionality to recognise sustainable fuels for different compliance purposes simultaneously. An interim solution is needed to prevent difficulties in obtaining PoS until these functionalities become available. If an operator subject to emissions trading or entitled to allocations does not have any PoS available, as an interim solution and only on a temporary basis the claiming of an equivalent evidence of sustainability (so-called Proof of Compliance (PoC)) of the certification systems for emissions reporting and in the allocation of free emission allowances under the EU ETS 1 may be granted.
Due to these circumstances, aircraft operators may, until the functionalities are available in the UDB, also temporarily claim alternative and eligible fuels based on an equivalent evidence of sustainability of the certification systems (PoC) in accordance with Article 3c (6) of Directive 2003/87/EC. We will explain further details in the next guidelines update.
The provisions for providing evidence for the recognition of alternative and eligible fuels in emissions trading must still be revised in the national Emissions Trading Regulation (EHV). Until the national Emissions Trading Regulation comes into force, we will proceed using a retroactive approach from 01/01/2024 onwards as explained in this newsletter.