B 3.1: Guidelines for the Monitoring, Reporting and Verification of Greenhouse Gas Emissions

Transcription

1 B 3.1: Guidelines for the Monitoring, Reporting and Verification of Greenhouse Gas Emissions

2 About the Project "Emissions Trading System: Capacity Building" is a programme of the German Ministry for the Environment [BMUB], in cooperation with the German Emissions Trading Authority [DEHSt] and leading German emissions trading experts, to share knowledge and experience to help interested countries establish an emissions trading system. Fundamental principles and best practices of emissions trading are offered with a focus on the EU and German experiences. Participants gain the necessary expertise to develop and implement concepts to design their own national ETS. The programme offers training modules in selected countries and in Germany and has been specially designed for experts and policy makers. The programme comprises a number of modules that can accommodate individual interests and prior knowledge of participants. 2

3 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 3

4 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 4

5 Goal & Objectives Goal of this presentation is to deliver an overview of the existing MRV system under the European Emissions Trading Scheme Objectives are to: Understand the importance of a monitoring system; Become familiar with the main design features of the process; Get to know who are the main actors in this system & who is responsible for what; How to build such a system at home; Use that experience also for data acquisition for preparing decisions on Emissions Trading Scheme and Allocation planning. 5

6 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 6

7 Why Monitoring & Reporting? ETS gives flexibility to the operators allows emissions to be cut where cheapest! Flexibility ends when actual emissions must be reported. Operators must surrender allowances on the basis of annual Monitoring & Reporting. Monitoring & Reporting The flip side of the coin free allocation vs. compliance costs Monitoring principle: One tonne CO 2 emitted must be one tonne CO 2 reported. You can only control, what you can measure! 7

8 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 8

9 EU ETS Legal Framework - Overview Emissions Trading Directive (2003/87/EC) Linking Directive JI-/CDM projects (2004/101/EC) Directive amending EU ETS from 2013 onwards (2009/29/EC) Directive on aviation (2008/101/EC) EC Decision on free allocation of emission allowances (2011/278) EC Regulation on auctioning of GHG emissions (1031/2010) EC Decision on list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage (2010/2) EC Regulation of establishing a Union Registry (No 389/2013) EC Regulation on the monitoring and reporting of greenhouse gas emissions (No 601/2012) EC Regulation on the verification of greenhouse gas emission reports and tonne-kilometre reports and the accreditation of verifiers (No 600/2012) EC Decision on the effort of Member States to reduce their greenhouse gas emissions to Meet the Community s greenhouse gas emission reduction commitments Up to 2020 (No 406/2009) EC Regulation on determining international credit entitlements (No 1123/2013) EC Regulation on establishing a scheme for GHG emission allowance trading in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (No 421/2014) Module B 3.2: Institutional & Legal Framework of the EU Emissions Trading System (ETS) 9

10 Background Monitoring and calculating CO 2 emissions & emission reports are essential elements of the emissions trading system! Robust, simplified, transparent, consistent and accurate monitoring and reporting of GHG emissions is essential! The Monitoring and Reporting Regulation (MRR) of the EU entered into force on 1 August 2012 and applies to emissions monitoring from 1 January 2013 on. It replaces the Monitoring and Reporting Guidelines (MRG) of the EU which were adopted in 2004 (revision 2007). The MRR provides the regulatory framework for the monitoring and reporting of GHG emissions within the ETS in the third trading period. Its regulations are directly applicable to all member states and to all participants. 10

11 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 11

12 Overview: Allocation, MRV, Compliance 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring 9. Emission Report 10. Verification of Emission Report 11. Submission of Emission Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

13 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 13

14 Step 5: Establishing a Monitoring Plan 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring The operator must: Reveal monitoring method (calculation or measurement); 11. Submission 10. Verification of 9. Emission Explain whether Report and how MRR requirements are of met; Emission And where the method Emission deviates Report from the MRR. Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

15 Step 5: Monitoring Plan ( ) Existing installations: installation-specific monitoring plan (MP) shall be developed before start of the monitoring period. New entrant installations: MP has to be submitted before start of operation MP is the basis for the emission reports. MP to be submitted to competent authority for approval before start of the monitoring period. MP is compiled using standardized electronic templates. In Germany this is done by application of a national form management system (FMS). DEHSt has published special guidance documents for this. 15

16 Monitoring Plan: Design and Content Documentation of methods Monitoring Plan General plant information Calculation-based methodology Measurement-based methodology Categorisation of source streams Calculation factors Emission sources Summary of process instructions Information on changes and updates Supporting documents Proof of meeting tier requirements Results of risk analysis Procedures / Process instructions Data management Control system Sampling plan Analysis QA for measurement instruments... 16

17 Methods for CO 2 Emissions Determination Calculation-based methodology Measurement-based methodology Standard Methodology Mass balance Methodology A combination of methods is possible. 17

18 Standard Methodology Emissions InputStreams * EmissionFactors * OxidationFactor Fuels for combustion Process input materials products waste 18

19 Combustion Emissions Determination Formula for calculating: CO CombustionEmissions 2 FuelFlow* NetCalorificValue* EmissionFactor * OxidationFactor Oxidation factor for Germany is 1. Determination of the emission factor and net calorific value: Commercial standard fuels and small installations using standard factors from German regulation, e.g.: Natural gas t CO 2 /GJ 36.0 GJ/1.000 Nm 3 Mine gas t CO 2 /GJ 17.8 GJ/1.000 Nm 3 Fuel oil, light t CO 2 /GJ 42.6 GJ/t Fuel oil, heavy t CO 2 /GJ 39.5 GJ/t Raw lignite t CO 2 /GJ GJ/t Biomass t CO 2 /GJ - - Other fuels & large installations calculation is done by analysing fossil C-content & net calorific value. Invoicing data from supplier can be used if information relevant for tier requirements is available. 19

20 Material Flows Emissions Determination Formula for calculating: CO 2 Pr ocessemission ActivityData * EmissionFactor * ConversionFactor Determination of the emission factor: For small installations using a product standard factor according to MRR and German regulation, e.g.: Cement clinker t CO 2 /t Gypsum t CO 2 /t For large installations emission factor shall be determined on-site e.g. by lab. analysis at the plant. Invoicing data from supplier can be used if information relevant for tier requirements is available. 21

21 Mass balance Emissions f *( C Input C Output ) C Input C Output 23

22 Continuous Emissions Measurement Emissions Concentration Volume flow CO 2 e 24

23 Tier Approach in Monitoring Plan and Reports The tier approach defines the accuracy level for each parameter per activity. Principle: Each tier has a number (1-4), having been allocated per parameter and activity. Selection of tier depends on the amount of annual total emissions of the installation in the previous emissions trading period. Rule: higher number of tier and higher total emissions require higher accuracy level. Plants > 50,000 t annual emissions (Category B and C) must generally meet the highest level of accuracy, meaning tier 4 25

24 Tier Approach: Categorised according to CO 2 Emissions A B C CO 2 emissions [in 1,000t/a] 26

25 Tiers for Activity Data for Category A Facilities and Commercial Standard Fuels Source: Excerpt from Annex V and Annex II MRR

26 Fall-back Approach Calculation Method: Categories and Tiers Category C Category B Category A Commercial standard fuels Small emitters Highest Tier as per Annex II Minimum requirements as per Annex V 1 tier lower possible Up to 2 tiers lower possible Further facilitations Lower tier possible for transition period (up to 3 years); plan for achieving required tier necessary Minimum requirement Tier 1 if this is technically not feasible or incurs unreasonable costs 30

27 Step 5: Establishing a Monitoring Plan 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring The operator must: Reveal monitoring method (calculation or measurement); 11. Submission 10. Verification of 9. Emission Explain whether Report and how MRR requirements are of met; Emission And where the method Emission deviates Report from the MRR. Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

28 Example Power Plant: Process Overview CO 2 - emission for combustion & process (desulphurisation) CO 2 Chimney Air and Steam Ammonia Desulphurisation Lime susp. Steam Denox Cooling Tower Coaldust Gypsum E-Filter Condenser Air Combustion Air Boiler River Cooling-Water Circuit Source: Module D 1: Guidelines for the Monitoring, Reporting and Verification in the Energy Sector 36

29 Example Power Plant: Source Stream Diagram CO 2 Coal Coal pile Desulphurisation Lime Coal Delivery silo Waste Boiler A Boiler B System boundary Boiler silo Coal mass balance NG Oil Source: eins energie in sachsen GmbH & Co. KG Chemnitz Module D 1: Guidelines for the Monitoring, Reporting and Verification in the Energy Sector 37

30 Example Power Plant: Identify Requirements Category C plant Gas-fired power plant with total emissions of 500,000 t CO 2 /yr CO 2 Emissions = Activity data * Emission factor * Oxidation factor Amount of fuel (ex: Gas) * NCV Tier 4 Tier 3 Tier 3 Tier 1 38

31 Example Power Plant: Activity Data Tier 4 The fuel consumption over the reporting period shall be determined by the operator or fuel supplier within a maximum uncertainty of less than ± 1.5% taking into account the effect of stock changes where applicable. 39

32 Example: Requirements Emission Factor 40

33 Example: Requirements Net Calorific Value 41

34 Sampling & Analysis Implementation and Quality Assurance For Sampling & Analysis, applied methods shall be based on EN standards (alternatively, ISO or national standards, industry best practice guidelines) Batch specific sampling & analysis, consistency in applying calculation factors to underlying fuel/material streams/batches, for which they are representative Establish sampling plan: written procedure, including sampling method, location, frequency, quantities, responsibilities, method for storage and transport Adapt sampling plan in case of high heterogeneity of fuel/material Laboratory shall be accredited in accordance with EN If not available, demonstrate that the non-accredited laboratory meets equivalent requirements Frequencies for analysis As listed in Annex VII of the monitoring regulation Alternative: Demonstrate that variation of parameter < 1/3 of uncertainty threshold set by tier concept for respective activity data Module D 1: Guidelines for the Monitoring, Reporting and Verification in the Energy Sector 42

35 Example: Small Power Plant s Monitoring Requirements Category A plant Gas-fired power plant with total emissions of < 50,000 t CO 2 /yr CO 2 Emissions = Activity data * Emission factor * Oxidation factor Amount of fuel (ex: Gas) * NCV Tier 2 Tier 2a/2b Tier 2a/2b Tier 1 Source: BMU/DEHSt, December

36 Example: Small Power Plant s Monitoring Requirements Tier 2 The fuel consumption over the reporting period shall be determined by the operator or fuel supplier within a maximum uncertainty of less than ± 5 % taking into account the effect of stock changes where applicable. Tier 2a/2b Country-specific NCV or For commercially traded fuels the NCV as derived from the purchasing records for the respective fuel provided by the fuel supplier is used, provided it has been derived based on accepted national/international standards. Tier 2a/2b Country-specific emission factors (EF) or EF is derived by the density measurement of specific oils or gases common, e.g. to the refinery or steel industry, and EF is derived by the net calorific value for specific coal types. Tier 1: Standard Oxidation factor of 1 is used. 45

37 Uncertainty Assessment Simplified approaches: Measuring instrument is subject to national legal metrological control: Overall uncertainty = Maximum permissible error in service In case of calibrated devices the operator has to show that all requirements of the following four steps are met: Step 1: Operating conditions regarding relevant influencing parameters are available Step 2: Operating conditions regarding relevant influencing parameters are met Step 3: Performing quality assured calibration procedures Step 4: Further quality assurance procedures for measuring activity data In other cases the operator has to carry out a specific uncertainty assessment Module B 3.1: Guidelines for the Monitoring, Reporting and Verification of Greenhouse Gas Emissions 46

38 Frequencies for analyses Minimum frequencies for analyses for relevant fuels and materials listed in Annex VII MRR Use of a different frequency allowed where minimum frequencies are not available or where the operator demonstrates one of the following: Any variation in the analytical values for the respective fuel or material does not exceed 1/3 of the uncertainty value to which the operator has to adhere with regard to the activity data determination of the relevant fuel or material using the required frequency would incur unreasonable costs 47

39 Typical Problems for Companies with ETS Introduction Inside of a company: extent of issue sometimes underestimated: Often treated as classical environment issue, underestimating financial relevance; Lack or only slow provision of personal and / or financial capacities; Necessary processes not defined (e.g. who is responsible for what? ); Sometimes also excessive care for minor important (technical) details; Lack of or not well defined internal management systems. Related to government action beyond MRV: High time pressure; Belated release of legal prescriptions / other requirements; Some important business regulation appeared only with considerable delay (e.g. treatment of EUAs within taxes and balances for companies). Conditions like: Delay of registries; High dynamics in regulatory environment. Problem for performance and intra-company acceptance! 48

40 Steps 6: Approval of Monitoring Plan 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring The monitoring plan has to be submitted once to the competent authority for approval before 11. starting Submission the 10. Verification of 9. Emission operation. Report of Emission In case of adjustments Emission of Report the monitoring plan Report which are subject to authorization, reapproval necessary. Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

41 Step 8: CO 2 Monitoring 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application Plant operator is obliged to monitor his emissions on the basis of the approved monitoring plan and to report them in Step Issuance of 6. Approval of Information regarding the methods for CO Allowances Monitoring Plan 2 emissions determination has been already provided in Step Allocation Decision 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring 9. Emission Report 10. Verification of Emission Report 11. Submission of Emission Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

42 Content Goal and Objectives Why Monitoring & Reporting Background Overview of Monitoring and Reporting Process Monitoring Plan Emission Report Determination & Verification Process 51

43 Step 9: Emission Report 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring 9. Emission Report 10. Verification of Emission Report 11. Submission of Emission Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

44 Step 9: Emission Report To be submitted to competent authority by 31 March Using available EU Templates or Special Software Formular Management System (FMS), which must be used in Germany. It: Provides automatic checks; Reduces potential for errors (data import from monitoring plans); Increases cost-effectiveness of checking reports on the part of DEHSt and Facilitates verifiers work. Guidance for reporting is given by: Guideline of EU or the national authority (DEHSt); User manual of FMS; Downloads on DEHSt homepage (e.g. FAQs, etc.). 53

45 Content of the Emission Report General information about the plant; Address data (operator, responsible person, responsible authority, verifier); Description of the plant sections; For each operation carried out, following data should be defined: Activity data; Net calorific value; Emission factors; Oxidation factors; Actual annual CO 2 emissions; Example of an emission report Information regarding the reporting period; Reference to monitoring methodology and plan; CO 2 emissions reporting according to plant sections; Verification report. 55

46 Step 10: Verification of Emission Report 1. Definition Legal Framework, Scope, GHG permission 2. Allocation Application 3. Verification of Allocation Application 4. Allocation Decision 7. Issuance of Allowances 6. Approval of Monitoring Plan 5. Establishment of Monitoring Plan 8. CO 2 - Monitoring 9. Emission Report 10. Verification of Emission Report 11. Submission of Emission Report Steps 7-14 are repeated annually! 14. Surrender of Allowances 13. Obligatory and in-depth checks 12. Entry into Registry (VET) Plant Operator Competent Authority Verifier Legislative Body Source: FutureCamp

47 Angelika Smuda Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety Division KI I 3 Legal Issues Climate Policy, Emissions Trading Felix Nickel FutureCamp Climate GmbH felix.nickel@future-camp.de