Options for the CORSIA Registry System 17 th CTI Workshop 29 th June 2017

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1 0 Options for the CORSIA Registry System 17 th CTI Workshop 29 th June 2017

2 Options for the CORSIA Registry System 17 th CTI Workshop Climate Action in International Aviation Dr. Thomas Schütz HoU E 2.4, Registry Administration 29 th June 2017, Berlin

3 Emissions Trading Registry Principles Basic characteristics An emissions trading registry (ETR) is an electronic database system that contains accounts and emission certificates or units owned by account holders (AH) contains account representatives (users) acting on behalf the AH can be accessed by users through the internet has secure private and public sectors An ETR is very similar to an online-banking system Units can be transferred between accounts A registry system can be conducted as a stand alone system or as a system connected to other national or regional systems A controlling system checks the integrity of the registry system ITL for the Kyoto trading EUTL for the EU ETS 3

4 Emissions Trading Registry Functionality A registry is Not a trading platform and not a stock exchange market Not an aircraft operators database Not a reporting instrument Not showing the financial transactions behind a purchase A registry should follow KYC checks and crime prevention measures Know your Customer checks because the registry stores assets Crime prevention: AML procedures 4

5 Architecture of the International Registry System 5

6 CORSIA Registry System Hypothetical / Recommended Basic Requirements The CORSIA registry system should ensure Accurate accounting, Tracking of compliance, Necessary transparency and Support for states to fulfill their role to enforce compliance The CORSIA registry system will essentially contribute to The Integrity and The Credibility of the scheme Organizational options Consolidated central registry (maintained by the ICAO) Single or grouped registries (maintained by States) Linking of CORSIA registry system with ETS 6

7 CORSIA Compliance I Draft Compliance Process Operators have received the number of units to be compensated from their Administrative Authority [AA] Operators buy units in an ETS, international credits or VER (?) Units to be delivered on operators account Units to be held by a third party (e.g. trader) Operators cancel units permanently or buy cancelled units On operators account By a third party on behalf of the operator Operators receive cancellation statement [CS] (e.g. pdf) Operators provide CS to AA AA checks validity of the CS AA provides CS to ICAO for central registration CS will be published for transparency on serial numbers 7

8 CORSIA Compliance II Compliance Process Integrity Three important prerequisites for integrity 1. Units to be cancelled need to be unique A unit has a serial number and must not exist multiple times 2. Cancellation cannot be reversed Otherwise a CS would become invalid Exception: Before issuing the CS (e.g. in case of erroneous cancellation) 3. CS will be published Allows e.g. NGO assessing integrity To be guaranteed by the ETS (Cap and Trade system) UN Climate Secretariat for international credits by the functioning of the International Transaction Log (ITL) CORSIA registry administrator 8

9 ETS in the World 9

10 CORSIA Registry System Configuration Models or Options I. Free choice model OR no registry model II. National ETS model III. CORSIA registry maintained by ICAO IV. Mixed model 10

11 CORSIA Registry System Configuration Option I Free choice model OR no registry model Aircraft operators can choose the unit types and the way of cancellation without restrictions Advantages Free choice Low cost for operators Disadvantages No quality control of units possible Aircraft operator needs to prove the prerequisites 1 and 2 AA needs to check the CS thoroughly Higher costs for AA Prerequisite 3 achievable? 11

12 CORSIA Registry System Configuration Option II National ETS model Aircraft operators obliged to open an account in national ETS registry Advantages Registry service established Low cost for operators Quality control of units possible by AA Prerequisites 1 and 2 fulfilled by ETS rules and registry Disadvantages Higher costs for operators (unit types restricted) Transparency (prerequisite 3) by AA Only restricted unit types available 12

13 CORSIA Registry System Configuration Option III CORSIA registry maintained by ICAO Aircraft operators obliged to open an account in the ICAO CORSIA registry Advantages Registry service established Low cost for operators Quality control of units possible by AA Prerequisites 1, 2 and 3 fulfilled Disadvantages High complexity of the registry system (AA need to administer their own sector, Multilingual) Only restricted unit types available Connection to ITL for using CER? Linking to national ETS for using national unit types? 13

14 Linking to National ETS Centralized CORSIA registry (Option III) Technical linking to any national ETS is possible via Direct linking of the registry systems (e.g. via DES of UNFCCC) Gateway mechanism Units leaving the ETS registry are held on a gateway account and released if coming back Units cancelled in CORSIA registry shall be cancelled in the gateway account of the ETS registry Trading of CS possible Can be introduced into the centralized CORSIA registry Linking easily achievable There will be no issuance in the CORSIA registry system CORSIA registry system is receiving only No influence on the cap of the national ETS Demand of aircraft operators is the same in all options 14

15 Thank you for your attention! Dr. Thomas Schütz Internet:

List of checks to be performed by the international transaction log Draft, 3 November 2004

List of checks to be performed by the international transaction log Draft, 3 November 2004 Introduction 1. This draft note has been prepared by the UNFCCC secretariat, as administrator of the international