CIVIL AVIATION: SUBSIDIARY LEGISLATION: CIVIL AVIATION (CARBON OFFSETTING AND REDUCTION SCHEME FOR INTERNATIONAL AVIATION) REGULATIONS

(section 89)

(6th June, 2022)

ARRANGEMENT OF REGULATIONS

REGULATION

    1.    Citation

    2.    Interpretation

    3.    Duties of operators

    4.    Offences and penalties

        SCHEDULE

S.I. 59, 2022.

1.    Citation

    These Regulations may be cited as the Civil Aviation (Carbon Offsetting and Reduction Scheme for International Aviation) Regulations.

2.    Interpretation

    In these Regulations, unless the context otherwise requires—

    "international flight" means the operation of an aircraft from take-off at an aerodrome of a contracting State or its territories, and landing at an aerodrome of another contracting State or its territories; and

    "operator" means a person engaged in or offering to engage in an aircraft operation.

3.    Duties of operators

    An operator of an international flight which directly or indirectly impacts climate change shall comply with the carbon offsetting and reduction scheme for international aviation requirements set out in the Schedule.

4.    Offences and penalties

    A person who contravenes these Regulations shall be liable to a fine not exceeding P50 000, or to imprisonment for a term not exceeding six months, or to both.

SCHEDULE
CARBON OFFSETTING AND REDUCTION SCHEME FOR INTERNATIONAL AVIATION (CORSIA)

(reg 3)

CHAPTER – 1: INTRODUCTION.

1.    Introduction to Carbon Offsetting and Reduction Scheme for International Aviation:

    1.1    The 39th ICAO General Assembly, held in October 2016, concluded with the adoption of a global market-based measure scheme to address CO2'> emissions from international aviation, known as "Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)" which was approved by ICAO Council on 27th June, 2018. This market-based measure was adopted based on ICAO's aspirational goal of Carbon Neutral Growth beyond 2020.

    1.2    In 2010, ICAO set three aspirational goals to address its climate impact—

        (i)    An annual improvement of two per cent in fuel efficiency from 2009 until 2020,

        (ii)    To achieve Carbon Neutral Growth from 2020 to stabilise the net CO2'> emissions, and

        (iii)    Reduction of carbon emissions by 50 per cent by 2050 compared to 2005 levels.

    1.3    Under CORSIA, aeroplane operators are required to purchase and cancel "emissions units" to offset the increase in CO2'> emissions covered by the scheme. With the exceptions of humanitarian, medical and fire-fighting flights, all civilian international operations undertaken by aeroplane operators are covered by CORSIA. CORSIA aims to address any annual increase in total CO2'> emissions from international civil aviation above the baseline value (based on the average of 2021-2022 emissions levels) in order to avoid the impact of any unusual fluctuations in air traffic in 2020 levels.

2.    CORSIA Design Elements:

    2.1    CORSIA scheme has mainly two design elements, Monitoring, Reporting and Verification (MRV) and Offsetting. MRV is a system to capture fuel consumptions from international operations by an operator and, to calculate the carbon emissions thereon for reporting to CAAB annually. Whereas, in offsetting, an operator is required to offset its carbon emissions from its international operations which is due to increase in emissions levels compare to the baseline emissions value.

    2.2    Monitoring, Reporting and Verification (MRV): One of the main features of CORSIA is MRV system—

    -    Monitoring of fuel use on each international flight and calculation of CO2'> emissions,

    -    Reporting of CO2'> emissions information between aeroplane operators, CAAB and ICAO, and

    -    Verification of reported emissions data to ensure completeness and to avoid misstatements.

    2.3    The foremost requirement under this scheme is to monitor, verify and report the fuel consumptions and emissions data from international routes. All operators, who are engaged in international operations, have to capture their fuel consumption and carbon emissions data annually, starting from 1st January, 2019 every year. Requirement for the MRV of CO2'> emissions is independent from participation in CORSIA offsetting. The emissions data calculated from fuel used on international routes by all operators globally for the year 2019 and 2020 will be used exclusive by ICAO to calculate the baseline emissions value which will be used in the subsequent years for calculation of growth in emissions levels for calculation of offsetting requirements.

    2.4    Offsetting Requirements: While the reporting of emissions will take place on an annual basis, offsetting requirements will be aggregated by three-year compliance period. For every compliance cycle, operators will need to offset and cancel a quantity of eligible emissions units corresponding to their offsetting requirements. CAAB will notify operators of their final offsetting requirements for each three-year period by 30th November of the following year. Operators will, however, also be informed on an annual basis (also by 30th November) of the provisional offsetting requirements associated with each individual compliance year.

    2.5    Compliance Period: The offsetting requirements need to be fulfilled by the operators during each compliance period which is of three years duration. There are five, three-year compliance periods, as follows, starting from 2021—

    -    2021-2023: Pilot phase,

    -    2024-2026: First phase, and

    -    2027-2029, 2030-2032, 2032-2035: Second phase.

    2.6    Allocation of Offsetting Requirements: The allocation of offsetting requirements will evolve over time from a "sectoral" approach to a combination of a "sectoral" and an "individual" component. The sectoral component is based on the total CO2'> emissions of each operator. Each operator will have to offset a given percentage of its CO2'> emissions from flights subject to offsetting requirements. This percentage, the sector's "growth factor", will be the same for all operators and refers to the increase in CO2'> emissions divided by the total CO2'> emissions on routes covered by CORSIA in a given year.

    2.7    Phased Implementation: In order to address the concerns of developing states and to take into account the special circumstances and respective capabilities of States, CORSIA will be implemented in phases. The phased implementation, however, only relates to offsetting requirements.

    2.8    Pilot Phase (2021-2023) and First Phase (2024-2026): The Pilot and First phases are voluntary in nature and will apply to only those states that opt to participate in these phases. From 2021 until 2026, offsetting requirements will only apply to international flights between states that volunteer to participate in the pilot and/or first phase. Any operator flying between volunteering states will be subject to offsetting requirements, irrespective of participation of their State in the voluntary phases. All other international flights to and from States that have not volunteered; will be exempt from offsetting requirements.

    2.9    Second Phase (2027-2035): The Second phase is mandatory in nature and will apply to all those States who meets the RTK criteria or the exempted States who volunteers to participate in the scheme. From 2027, offsetting requirements will apply to all international flights including those that did not volunteer to be part of the pilot/first phases.

    2.10    The Second Phase of CORSIA applies to all ICAO Member States except to those States that meet the following aviation-related criteria—

    -    States with individual share of international aviation activities in Revenue Tonne Kilometres (RTKs), in year 2018 below 0.5 per cent of total RTKs, and

    -    States that are not part of the list of States that account for 90 per cent of total RTKs when sorted from the highest to the lowest amount of individual RTKs.

    2.11    Voluntary Participation: States who wish to participate in CORSIA voluntarily, can decide to join the scheme at the beginning of any year, however, they shall communicate their decision to ICAO before 30th June of the preceding year. States who decide to participate in CORSIA on a voluntary basis may discontinue their voluntary participation from the scheme from 1st January of any given year, provided they inform ICAO not later than 30th June of the preceding year. The list of such participating States will be published on ICAO website who intend to voluntarily participate in CORSIA from its outset.

    2.12    Route-based Approach: CORSIA shall apply to all international flights on the routes between two States participating in the CORSIA for offsetting requirements, in order to have complete emissions coverage and to minimising market distortion.

CHAPTER – 2: ADMINISTRATION.

1.    Attribution of International Flights to an Aeroplane Operator:

    1.1    As the scheme is applicable to international flights only, as a first step, all aeroplane operators have to identify their flights operating on international routes. For the purposes of this regulation, two or more consecutive international flights, operated under the same flight number, are considered as separate flights.

    1.2    The aeroplane operators shall either use ICAO Designator or Registration Marks to determine the attribution of such international flights. In case, an international flight could not be identified based on its ICAO Designator or Registration Mark, that flight shall be attributed to the owner of the aeroplane.

2.    Attribution of an Aeroplane Operator to a State:

    2.1    The aeroplane operator shall also ensure correct attribution towards the State to which the aeroplane operator fulfils its operational requirements by using either ICAO Designator or Air Operator Certificate (AOC). In case, an aeroplane operator does not possess an ICAO Designator or Air Operator Certificate, the State where the aeroplane operator is registered as juridical person or reside, shall be considered for its attribution purpose.

    2.2    In case, the aeroplane operator changes its ICAO Designator, AOC or place of juridical registration/residence and is subsequently attributed to a new State, but it is not establishing a new entity or a subsidiary, then the new State shall become the State to which the aeroplane operator fulfils its requirements under this regulation at the start of the next compliance period. Until such time, the aeroplane operator shall demonstrate compliance with the requirements of this regulation to CAAB only.

    2.3    The aeroplane operator with a wholly owned subsidiary aeroplane operator that is legally registered with CAAB can submit a request to CAAB for treating both operators as a single entity for demonstrating compliance with the requirements of this regulation. CAAB may consider their request provided the aeroplane operator submits substantiation documents to demonstrate that the subsidiary aeroplane operator is wholly owned by the parent organisation.

3.    CORSIA Focal Point: