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EU ETS –Monitoring and Reporting Regulation No 601/2012
EPA Workshop 27 September 2012
Annette Prendergast
Content
Introduction
Operator Requirements
Information Sources and Guidance Documents
Content of the Monitoring and Reporting Regulation
Monitoring and Reporting Regulation in Detail -What's
New?
Introduction
Commission Regulation (EU) No 601/2012 of 21 June
2012 on the monitoring and reporting of greenhouse gas
emissions pursuant to Directive 2003/87/EC of the
European Parliament and of the Council (MRR) applies
from the 01 January 2013.
The MRR replaces the Monitoring and Reporting
Guidelines (MRG). Developed to enhance EU-wide
harmonisation of approaches.
Compared to the MRG the MRR clarifies areas of
confusion, includes requirements to encourage greater
consistency, efficiency and fairness, includes
simplifications to improve cost-effectiveness, reduces
duplication and clearly identifies responsibilities.
Operator Requirements
All Operators will be required to monitor and report
greenhouse gas emissions from permitted activities in
accordance with the MRR from 01 January 2013.
The submission of the 2012 AIER and the close out of
compliance for 2012 will be based on MRG and the
current operating system.
New EPA online system for GHG permitting, enforcement
of permits, monitoring and reporting of GHG emissions,
separate from Registry.
All Operators required to apply on-line for an updated
combined GHG permit and monitoring plan which
complies with MRR and Phase III requirements in
October/November.
Operator Requirements continued
All Operators should become familiar with the
requirements of the MRR, Guidance documents and
updates required to monitoring plan (MP).
A detailed review of current monitoring methodology
undertaken to identify changes to comply with MRR
On-site records updated particularly in relation to source
stream metering, sampling and analysis of source streams
Update uncertainty assessment and ensure evidence
available for each source stream and emission source
demonstrate compliance with uncertainty thresholds.
Update risk assessment to take account of MRR
Operator Requirements continued
Operator responsible for on-site procedures, update to
comply with MRR, where required. Summary included in
Monitoring Plan (MP).
New procedures required , where appropriate, for:
sampling and analysis,
calculation factors,
revision of appropriateness of sampling plan,
procedure to estimate stocks at beginning/end year,
procedure to keep track of measurement instruments,
procedure for regular evaluation of MP appropriateness,
procedure to regularly check for information on planned or
effective changes to the capacity, activity level and operation
of the installation & ensure the data is submitted to EPA by
31 December each year.
Information Sources
MRR link
MRR Guidance Documents
The EU Commission are developing the following guidance
documents (GD).
GD 1 General Guidance for installations
GD 3 Biomass issues in the EU ETS
GD 4 Guidance on Uncertainty Assessment
GD 5 Guidance on sampling and analysis
GD 6 Data Flow activities and control system.
MRR Chapters
I General Provisions
II Monitoring Plan
III Monitoring of Emissions of Stationary Installations
IV Monitoring of Emissions and Tonne-kilometre Data
Aviation
V Data Management and Control
VI Reporting Requirements
VII Information Technology
VIII Final Provisions
MRR Annexes
I Minimum content of the Monitoring Plan
II Tier thresholds/requirements for calculation-based
methodologies for installations
III Monitoring methodologies aviation
IV Activity specific monitoring methodologies installations
V Minimum tier requirements calculated based methodologies
VI Reference values calculation factors
VII Minimum frequency of analysis
VIII Measurement based methodologies
IX Minimum data and information to be retained
X Minimum content of annual reports
Monitoring Approaches MRR
All types of combinations of monitoring approaches now
allowed provided Operator demonstrates neither double
counting nor data gaps in emissions occur.
The following methodologies are available:
Calculation based approach standard methodology
Calculation based approach mass balance
Measurement based approaches
Methodology not based on tier (fall-back methodology)
Combinations of approaches.
Measurement based approaches CEMS
Provisions for measurement based methodologies have
been significantly updated.
CEMS now on equal footing with calculation based
approach.
Tiers use maximum permissible uncertainties for annual
average hourly emissions.
Tier 1 Tier 2 Tier 3 Tier 4
CO2
emission
sources
+/- 10% +/- 7.5% +/- 5% +/- 2.5%
CEMS
For major emission sources either emitting > 5,000t
CO2/year or more than 10% of total annual emissions ,
the highest tier is applied. For smaller emission sources
next lowest tier applied. Where unreasonable costs
demonstrated or not technically feasible, lower tier
(minimum of 1) may be applied.
The measurement based method corroborated using
calculation, but no tiers specified.
Biomass to be determined by calculation and subtracted
from total continuously monitored emissions.
Installations with low emissions simplified
Average emissions less than 25,000 t CO2(e)
Apply minimum of tier 1 activity data and calculation
factors (emission factor, NCV) unless higher accuracy
achievable without additional effort (no justification
regarding unreasonable cost required).
Not required to submit uncertainty assessment or risk
assessment as part of monitoring plan.
Exempted from reporting on improvements recommended
by the Verifier but must take them into consideration.
Can determine amount of fuel/material using invoices and
stock changes without uncertainty assessment.
Simplified evidence regarding competence where non
accredited laboratory used.
Source Streams Classification –New Art.19.(3)
Source streams still applicable to calculation methods.
New methodology to classify source streams as
combinations of calculation and measurement methods
now allowed.
Determine total of all monitored emissions by adding up
emissions determined from calculation or mass balance
for each source stream, emissions from each CEMS
emission source and fall back emissions as relevant at the
installation.
Sort source streams and emission sources from CEMS in
descending order to categorise source streams into major,
minor and de-minimis .
Change to De-minimis threshold Art.19.3(b)
de-minimis source streams are now classified separately
and are no longer part of minor source streams.
de-minimis source streams are source streams
corresponding to less than 1000 tonnes fossil CO2 per
year or to less than 2% up to maximum of 20,000 t CO2
whichever is highest.
Maximum combined for minor and de-minimis is now
12% or 12,0000 t CO2/ annum.
Unreasonable costs (Art.18)
Costs considered unreasonable where cost exceeds benefit.
Minimum threshold €2000/y or €500/y (low emissions).
Benefit calculated by multiplying improvement factor with
price of €20 per allowance and costs to include lifetime
depreciation.
Improvement factor can be difference between uncertainty
currently achieved and uncertainty of tier which would be
achieved multiplied by average annual emissions over 3 most
recent years for that source stream.
For improvements such as switch from default factors to
analysis, shortening calibration and maintenance etc
improvement factor 1% of average annual emissions of
source stream over 3 most recent years.
Selecting the correct Tier (Art.26) Calculation Approach
The Operator should apply the highest tier defined for
each parameter.
Source stream Category A Category B Category C
Major Annex V Highest Highest
Major, but technically
not feasible or
unreasonable costs
up to 2 tiers lower with
a minimum of tier 1
up to 2 tiers lower with
a minimum of tier 1
1 tier lower with a
minimum of tier 1
Major, but still
technically not
feasible or
unreasonable costs;
improvement plan
(max. 3 year
transition)
Minimum tier 1 Minimum tier 1 Minimum tier 1
Minor highest tier technically feasible and without unreasonable costs (minimum
tier 1)
De-minimis Conservative estimation, unless a defined tier is achievable without
additional effort
Selecting the correct tier (Art.26 and Art.36)
For oxidation and conversion factors, the operator may
apply tier 1 (100%) in all cases.
Where Agency allows use of EF t CO2/t or /cubic meter
due to justification on unreasonable cost or where at
least equivalent accuracy can be achieved using
such a factor the NCV may be determined using a
lower tier.
Calculation Approach quantity of fuel or /material (Art.27,Art.28,29)
Based on continual metering or deliveries and stock takes.
Where technically not feasible or unreasonable costs to
determine stocks by direct measurement estimation
method may be used e.g. documented procedures and
audited financial statements.
If stocks cannot be determined midnight 31 December
next most appropriate date chosen but data must be
reconciled for calendar year.
For fuel/materials metering Operator chooses his own
instruments or supplier instruments.
Preference in MRR for own instruments.
Quantity of Fuel or Material Art.(27, 28, 29)
If Operator choses supplier instruments must provide
evidence accompanied by simplified uncertainty
assessment that those instruments allow compliance with
at least the same tier, give more reliable results and are
less prone to control risks than his own instruments.
Where invoices are used to determine fuel or material
quantity Operator must confirm that trade partners are
independent.
Uncertainty
Article 12(1) MRR requires Operator to submit the
following where relevant with the Monitoring Plan.
Evidence (manufacturers specifications and calculations)
for compliance with uncertainty thresholds for activity data.
Evidence for compliance with uncertainty required for
calculation factors if 1/3 activity data uncertainty rule
applied to sample frequency.
Evidence for compliance with uncertainty requirements for
measurement based methods if applied
Uncertainty assessment for total emissions where Fall
Back methodology applied.
Uncertainty (Art.28) Measurement Instrument Operator Control
Art. 47(4) exempts operators with low emissions from
submitting uncertainty assessment, including the
uncertainty for determining stock changes.
For Operator measurement instruments uncertainty
assessment conducted to ensure uncertainty threshold of
relevant tier met. Submit to EPA with each new or
changed MP.
Once per year and after each calibration, calibration
results multiplied by conservative adjustment factor to
determine uncertainty in service and compared to
uncertainty threshold.
Uncertainty of Operator Instruments
Assessment includes specified uncertainty of instrument,
calibration uncertainty and any additional uncertainty
associated with instrument use in practice.
Stock change uncertainty included where storage facility
capable of containing at least 5% of annual quantity
fuel/material.
Simplify assessment use, where available, maximum
permissible error in service (MPES) (where instrument
installed in appropriate environment) or where lower
calibration uncertainty multiplied by conservative
adjustment factor.
Where instrument subject to legal metrological control can
use legally specified MPES without further evidence.
Uncertainty (Art.29) Third Party Control of Measurement
Where instrument subject to legal metrological control can
use legally specified MPES for the commercial transaction
without further evidence.
Where those requirements do not meet tier requirements
Operator shall obtain evidence on the applicable
uncertainty from the third party responsible for the
measurement instrument (this could include a detailed
uncertainty assessment).
Detailed Guidance note on Uncertainty Assessment being
drafted and will include calculated examples.
Biomass-Sustainability Criteria
Definition of Biomass in MRR now aligned with definition in RES Directive (Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives
2001/77/EC and 2003/30/EC)
As Biomass emissions are “zero rated” in EU ETS this constitutes a “support scheme” within the meaning of RES Directive and must be justified by means of application of Sustainability Criteria
Sustainability Criteria must be applied to bioliquids but as yet it is not applicable to solid biomass or biogas (other than for transport)
Biomass-Sustainability Criteria
Implication
The burden of proof concerning a bioliquid meeting the
requisite sustainability criteria remains with the EU ETS
Operator. Where such status cannot be confirmed to the
satisfaction of the competent authority, the bioliquid will
have to be treated as a fossil source stream and not zero-
rated.
The Verifier will also assess during verification if evidence
for meeting the sustainability criteria is sufficient.
Biomass-Source Streams
Article 38 of MRR
Operator may determine activity data of biomass without using tiers and providing analytical evidence regarding biomass content where the source stream is exclusively biomass and not contaminated with any other fuel or material.
The Emission Factor of biomass is zero. The EF of a mixed fuel or material shall be calculated & reported as the preliminary emission factor multiplied by the fossil fraction of the fuel or material.
Where biomass fraction of mixed fuel or material is equal or higher than 97% or where it qualifies as a de-minimis source stream, The CA may allow the operator to apply no –tier methodologies.
Biomass – Mixed Fuels and Materials
Art.39 of MRR sets out hierarchical approach for determining
Biomass fraction of Mixed Fuel/Material:
Determination by Analyses on the basis of relevant standard.
(only if approved by CA)
When analyses not technically feasible or would incur
unreasonable costs, operator can use standard emissions
factors and biomass fraction values for mixed fuels and
estimation methods where available and to be published by
Commission.
In absence of standard factor the Operator shall either
assume absence of biomass share (conservative
assumption of whole material as fossil) or
submit an estimation method to CA for approval e.g.
mass balance
Data flow and Control (Art. 57, Art.58)
Operator must establish, document, implement and maintain data flow
activities for monitoring and reporting of emissions.
The Operator must establish an effective control system consisting of:
A risk assessment, and
Control activities for mitigating risks identified
In carrying out a risk assessment each data flow activity is analysed for
risks to misstatements ( errors, omissions, misrepresentations) and
potential reasons for misstatements. Measures are identified to reduce
risks.
Measures identified are implemented and the risk assessment re-
evaluated until risks reduced to low level to enable production of AIER
free from, as a minimum, material misstatements, or error free.
Control activities included as written procedures and referenced in MP.
Results of risk assessment submitted as attachment to MP.
Monitoring Plan (MP) Updates Art.14, Art.15,Art.16
Operator regularly checks validity of MP and whether it can be
improved.
Operator modifies plan in situations detailed Art. 14.2 (e.g. new
emissions, incorrect data, verifier recommendations)
Any proposals to modify MP submitted to EPA.
Significant modifications as specified in Art.15 (e.g. changes to
emission sources, tier level source streams) subject to EPA
approval.
Prior to approval monitoring may be carried out using changes
which are not significant or where original plan leads to
incomplete data.
Operator required to keep detailed records of all modifications to
the MP.
The Improvement Principle Art.69
Improvement report to be submitted by 30 June, every 4
years for category A Installation every 2 years for category
B installation and every year for Category C installation
where:
Highest tier as per Art. 26.1(calculation) Art. 41.1. (CEMS)
not applied.
Fall-Back methodology applied
Report to include justification based on unreasonable
costs or not technically feasible. Where these no longer
apply proposals and timeframe for implementing
appropriate measures to be included in report.
The Improvement Principle Art. 69
Where verification report lists outstanding non
conformance or recommendations for improvement an
improvement report required by 30 June by all Operators
except small emitters. The report should detail how and
when improvements implemented and non conformance
rectified.
Where improvements do not lead to improved monitoring
methodology Operator justification required.
Where improvements incur unreasonable costs evidence
of the unreasonable nature to be provided.
Determination of Emissions by the CA Art. 70
The CA shall make a conservative estimate of emissions
where:
No verified AIER submitted by 31 March deadline
The verified report is in non-compliance with MRR
The emissions report has not been verified in accordance
with AVR.
Where the Verifier states outstanding non-material
misstatements not corrected by the Operator, the CA
makes a conservative estimate of emissions where
appropriate. The CA requires Operator to correct the
AIER and arrange for re-verification.
Thank-you for your attention.
Annette Prendergast