EU-ETS after Jaap Bousema

Transcription

1 EU-ETS after 2012 Jaap Bousema

2 Topics Today: Short overview of most important changes after 2012 Methodology for allocation Tomorrow: Reporting for allocation

3 Dutch Emissions Authority (NEa) Involved in: Validation of monitoring plans, permitting Inspections and sanctions Reporting Registries New task: Allocation ( ) Not involved in: Verification Accreditation In total about 420 participating installations and 40 aircraft operators in NL

4 EU-ETS after 2012 Framework: Directive 2009/29/EG Approved and extended Scope: New activities, e.g. (non-)ferrous metals, aluminium, mineral wool, gypsum, carbon black, nitric acid, ammonia, bulk organic chemicals, hydrogen, synthesis gas, CCS New gases: N2O (nitric acid) and PFC (primary aluminium) 4

5 Scope EU-ETS (Annex-I) For some activities production capacity thresholds may be given: If crossed mandatory participation If not crossed check thermal input Thermal input: exceptions for checking with 20 MW-threshold Units below 3 MW Units for the incineration of municipal or hazardous waste Units exclusively using biomass Installations using solely biomass as fuel exempted from ETS Opt-out provision for small installations See Commission s guidance on scope of Annex-I ( erpretation_en.pdf) 5

6 Efficiency EU-ETS Basic idea: auctioning From 2013: 100 % auctioning for electricity generation For other sectors free allocation decreases: 2013: 80 % 2020: 30 % 2027: 0 % Exception: sectors exposed to carbon leakage: 100 % free 6

7 Level playing field (certainty and predictability) (1) European harmonisation: EU-wide emissions ceiling (CAP) EU-wide rules for free allocation EU-wide new entrants reserve 7

8 Level playing field (certainty and predictability) (2) European harmonisation: EU Regulation for Monitoring & Reporting EU Regulation for Verification & Accreditation Monitoring & Reporting: Regulation will replace MRG 2007 Commission: Evolution without revolution In NL and other EU-countries: revision of permits and validation of monitoring plans in

9 Major changes M&R Regulation New activities/sectors added Requirements for content of MP; more references to separate documents and procedures Notification of changes Improvement principle Mass balance approach Transfer of CO2 Sustainability criteria for biomass (link to RED) Compliance with tiers for activity data and sampling frequencies Unreasonable costs Requirements for small installations Revision of monitoring plans necessary 9

10 10 QUESTIONS???

11 Allocation methodologies Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

12 Differences phase 2 <-> phase 3 Phase 2: Phase 3: Free allowances Industry and electricity generation Industry Basic principle Historical emissions Historical production benchmarks and Attribution calculated allowances 100% 80% in % in % for carbon leakage Auctioning Limited Substantial Legislation Directive 2003/87/EC NAP II (national) Directive 2009/29/EC Implementing measures (CIM) (European) Allocation National allocation decision National allocation decision/nim 12

13 Allocation to an installation Allocation = Benchmark (fixed value) X Historical activity level (production data) X Carbon leakage exposure factor (yearly fixed value) X Cross-sectoral correction factor (to be determined) OR: linear reduction factor (fixed value) 13

14 Basic principle Allocation based on benchmarks 1. Productbenchmark: all. per ton product 2. Heatbenchmark: all. per GJ heat Hierarchy 3. Fuelbenchmark: all. per GJ fuel 4. Historical emissions: all. per ton CO 2 No free allocation for electricity production and flaring (except safety flaring). All emissions can only be covered by one methodology! 14

15 Basic principle Hierarchy allocation methodologies CO 2 combustion CO 2 process fuel heat product Heat Production production process with benchmark Product with benchmark? Measurable heat? Fuel for nonmeasurable heat? Processemissions? Allocation methodology Relevant historical activity Yes Productbenchmark Production No Yes - - Heatbenchmark Heat consumption No No Yes - Fuelbenchmark Fuel consumption No No No Yes Process emissions Historical emissions No No No No No free allocation 15

16 Basic principle Hierarchy allocation methodologies CO 2 combustion CO 2 process fuel measurable Heat Production product production process heat without benchmark Product with benchmark? Measurable heat? Fuel for nonmeasurable heat? Process emissions? Allocation methodology Relevant historical activity Yes Productbenchmark Production No Yes - - Heatbenchmark Heat consumption No No Yes - Fuelbenchmark Fuel consumption No No No Yes Process emissions Historical emissions No No No No No free allocation 16

17 Basic principle Hierarchy allocation methodologies CO 2 combustion CO 2 process fuel heat Heat Production product production nonmeasurable process without benchmark Product with benchmark? Measurable heat? Fuel for nonmeasurable heat? Process emissions? Allocation methodology Relevant historical activity Yes Productbenchmark Production No Yes - - Heatbenchmark Heat consumption No No Yes - Fuelbenchmark Fuel consumption No No No Yes Process emissions Historical emissions No No No No No free allowances 17

18 Basic principle Hierarchy allocation methodologies CO 2 process Production process product without benchmark Product with benchmark? Measurable heat? Fuel for nonmeasurable heat? Process emissions? Allocation methodology Relevant historical activity Yes Productbenchmark Production No Yes - - Heatbenchmark Heat consumption No No Yes - Fuelbenchmark Fuel consumption No No No Yes Process emissions Historical emissions No No No No No free allocation 18

19 Basic principle Hierarchy allocation methodologies Production process product without benchmark Product with benchmark? Measurable heat? Fuel for nonmeasurable heat? Process emissions? Allocation methodologies Relevant historical activity Yes Productbenchmark Production No Yes - - Heatbenchmark Heat consumption No No Yes - Fuelbenchmark Fuel consumption No No No Yes Process emissions Historical emissions No No No No No free allocation 19

20 Basic principle Allocation based on historical activity levels Historical activity level (HAL) Productbenchmark : historical production Heatbenchmark : historical heat consumption Fuelbenchmark : historical fuel consumption Process emissions : historical emissions Historical data from period Choice for installation Baseline period Baseline period if higher 20 HAL to be determined with median value

21 Basic principle Calculation historical activity level base on median value Median: middle value of a series Average of 2 middle values Year Production HAL = Median = 110 Only years with at least one production day taken into account Year Production HAL = Median = Less than two full calendar years: based on capacity

22 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

23 Principle Carbon Leakage Carbon leakage to non-ets countries by moving production Research by European Commission: Result: list of sectors and subsectors exposed to a significant risk of carbon leakage List laid down in European regulation yearly addition of sectors possible 5-yearly revision foreseen, 1 st revision in 2014 Sectors appointed based on NACE (4 digits) or PRODCOM (6 8 digits) 23

24 Carbon Leakage Consequence of carbon leakage status Products exposed to carbon leakage : 100% allocation of calculated amount of allowances in Products not exposed to carbon leakage 80% allocation of allowances in 2013 decreasing to 30% allocation of allowances in

25 Carbon Leakage Determine Carbon Leakage status 1. NACE or PRODCOM: determine by definitions Eurostat 2. Check with regulation? 25

26 Carbon Leakage Points of attention Carbon Leakage list is based on NACE code rev 1.1 ( NACE rev 2.0) PRODCOM 2007 fits with NACE rev 1.1: 1 st 4 digits PRODCOM 2007 = NACE rev 1.1 PRODCOM cast/rolled glass NACE rev manufacture of flat glass CL exposed PRODCOM cast/rolled glass NOT CL exposed! 26

27 Carbon Leakage Points of attention Always refer to Eurostat definitions For products from PRODCOM 2007 to NACE rev 1.1 n.e.c : niet elsewhere classified 3663 Other manufacturing, n.e.c. 27 NACE code is not(always) equal to SBI-code Revision of CL-list was done this May

28 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

29 Subinstallations Principle Part of the installation to which one allocation methodology applies Division by carbon leakage (CL) status of products Types of subinstallations: Productbenchmark subinstallation (52 types) 29 Heatbenchmark subinstallation Fuelbenchmark subinstallation Process emission subinstallation CL Non-CL CL Non-CL CL Non-CL

30 Subinstallations Subinstallation boundaries: Inputs, outputs and emissions for production of product, heat, fuel, process Subinstallation not by definition equal to a physical unit - One unit can be part of more subinstallations - One subinstallation can consist of more units No overlap between emissions of subinstallations: emissions of all subinstallations + emissions not covered by allowances = total emissions of the installation 30

31 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

32 Productbenchmarks Basic principle productbenchmarks 32

33 Productbenchmarks Overview products with benchmark Coke Sintered dolime Plaster Tissue E-PVC Ammonia Sintered ore Hot metal Pre-bake anode Aluminium Grey cement klinker White cement klinker Float glass Bottles and jars of colourless glass Bottles and jars of coloured glass Continuous filament glass fibre products Facing bricks Pavers Dried secondary gypsum Short fibre kraft pulp Long fibre kraft pulp Testliner and fluting Uncoated carton board Coated carton board Soda ash Refinery products EAF carbon steel Steam cracking Aromatics Styrene Sulphite pulp Nitric acid EAF high alloy steel Hydrogen Recovered paper pulp Newsprint Adipic acid Iron casting Synthesis gas Vinyl Chloride Monomer Mineral wool Ethylene oxide/ ethylene glycols Lime Roof tiles Uncoated fine paper Phenol/Acetone Plaster board Dolime Spray dried powder Coated fine paper S-PVC Carbon black 33 Not carbon leakage exposed (NB: based on CIM, not on revised list)

34 Productbenchmarks Examples of benchmark definition in CIM Deviant unit? Carbon leakage status Benchmark value Limited product definition System boundaries 34

35 Productbenchmarks calculation preliminary allocation Preliminary allocation = Historical production level x Benchmark F p BM p HAL p F p BM p HAL p = preliminary allocation for product p = benchmark of product p = historical production level of product p (median baseline period) 35

36 Productbenchmarks Benchmarks with fuel/electricity exchangeability 14 productbenchmarks appointed in CIM Value including indirect emissions from electricity consumption Refinary products Mineral wool Ammonia Hydrogen EAF carbon steel Plasterboard Steam cracking Synthesis gas EAF high ally steel Iron casting Carbon black Aromatics Styrene Ethylene oxide/ ethylene glycols Correction needed for electricity consumption Correction : elektricity consumption / total emissions 36

37 Productbenchmarks Benchmarks with fuel/electricity exchangeability F p Fp Em Emdirect Em Em direct Em Em Em direct heatimport directheatimportindirect BM Em indirect BM HAL p p p HAL p F p = basis allocation for product p Em direct = direct CO 2 emissions Em heatimport = emissions from imported heat) GJ *62,3 Em indirect = indirect CO 2 emissions electricity (MWh x 0.465) BM p = benchmark value for product p HAL p = historical production product p (median baseline period) 37

38 Productbenchmarks Benchmarks with deviant calculation Refineries, aromatics Hydrogen and synthesis gas (CIM: Annex III ) Ethylene oxide Steam cracking (CIM : art 11) Vinyl chloride monomer (CIM : art 12) 38

39 Heatbenchmark Basic principle heatbenchmark Apply if : Emissions outside system boundaries productbenchmark AND Heat is measurable AND No electricity generation with heat Measruable heat Heat flow by identifiable pipeline or duct Heat transfer medium (steam, air, oil etc) Where device is or could be installed for heat measurement based on flow and temperature Benchmark for heat consumption Defined at 62,3 allowances/tj 39

40 Heat benchmark 1. Heat flow was measured: M Fuel (GJ) Boiler Heat (GJ) 2. Measurable heat was not measured calculate M Fuel (GJ) Boiler Heat efficieny Heat (GJ) = input x measured efficiency 3. Efficiency unknown Standard value is 70% 40

41 Heatbenchmark Calculation preliminary allocation Preliminary allocation = Historical heat consumption x Heatbenchmark F q BM q HAL q F q BM q HAL q = preliminary allocation for heatbenchmark = heatbenchmark = 62.3 ton CO 2 / TJ = historical heat consumption (median baseline period) heat consumption = production + import 41

42 Heatbenchmark Heat transfer between installations Basis: allocation not for heat production but for heat consumption. Allowances for heat consumer Exception : If consumer is non-ets, then allowances for heat producer Exception: if producer is non-ets but consumer is ETS, then no allowances for heat correction needed ETS status per 1/1/2013 is relevant! 42

43 Heatbenchmark Heat transfer between installations ETS X Q ETS Allocation to consumer Productbenchmark or heatbenchmark ETS Q Non-ETS X Allocation to producer Heatbenchmark: Historical heat export for producer Non-ETS X Q ETS X No allocation, but correction Productbenchmark Deduction: 62.3 x Q import Heatbenchmark Non-ETS heat not added to heat consumption 43

44 Heatbenchmark Heat-transfer via heat distribution network What GJ is from who? ETS Network ETS X Allocation to producer: delivers heat to non-ets entity Non- ETS No allocation to consumer: receives heat from non-ets entity ETS X Non-ETS X Criterion: no contractual relation between producer and consumer 44

45 Heatbenchmark Heat transfer between installations Special provision : Heat export for private households Compensation: If amount of allowances for 2013 < emissions Compensation of difference allowances vs emissions 2013 : 100% 2014 : 90% yearly decrease with 10% Heat and emissions to be split: private households vs other (district) heating Proof to be provided by producer 45

46 Heatbenchmark Heat transfer ETS ETS Non-ETS Network Non-ETS Private households Other district heating 46 All heat flows must be identified: proof by producer for export to private households

47 Fuelbenchmark Basic principle fuelbenchmark Apply if: Emissions outside system boundaries productbenchmark AND Heat is not measurable AND Heat is not used for electricity generation Thus: Production of mechanical energy Direct heating without transfer medium Safety flaring (if required for safety reasons) Fuelbenchmark Defined at 56.1 allowances/tj (use of natural gas) 47

48 Fuelbenchmark Calculation preliminary allocation Preliminary allocation = Historical fuel consumption x Fuelbenchmark F f BM f HAL f F f BM f HAL f = preliminary allocation for fuelbenchmark = fuelbenchmark = 56.1 ton CO 2 / TJ = historical fuel consumption (median baseline period) 48

49 Process emissions Basic principle process emissions Apply if : Emissions outside system boundaries productbenchmark AND Other greenhouse gases than CO 2 OR Emissions defined in CIM as process emissions: (i) Reduction or metal compounds (ii) Removal of impurities from metal (compounds) (iii) Decomposition of carbonates (iv) Chemical syntheses (v) Use of carbon containing additives or raw materials (vi) Reductie of metalloid oxides or non-metal oxides (SiO) Application of reduction factor of 97% 49

50 Process emissions Calculation preliminary allocation Preliminary allocation = Historical process emissions x 0.97 Fe HAL e F e = preliminary allocation for process emissions 0,97 = reduction factor process emissions HAL e = historical process emissions (median baseline period) 50

51 51 QUESTIONS???

52 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

53 Examples subinstallation More units in one subinstallation: CO 2 Natural gas Boiler 1 Production line 1 P1 Benchmark Product P1 CO 2 Natural gas Boiler 2 Production line 2 P1 Benchmark Product P1 53

54 Examples subinstallation More units in one subinstallation: CO 2 Boiler 1 Production line 1 P1 Benchmark Natural gas Product P1 Boiler 2 Production line 2 P1 Benchmark One productbenchmark-subinstallation 54

55 Examples subinstallation One unit in more subinstallations: CO 2 Production process P1 with benchmark Product P1 Natural gas Boiler 1 Production process P2 without benchmark 55

56 Examples subinstallation One unit in more subinstallations: CO 2 Natural gas Production process P1 with benchmark Product P1 Boiler 1 Natural gas heat Production process P2 without benchmark CO 2 56 one productbenchmark-subinstallation one heatbenchmark-subinstallation

57 Examples subinstallations One unit in more subinstallations: CO 2 Natural gas Glass furnace Bottles (coloured and colourless) 57

58 Examples subinstallations One unit in more subinstallations: CO 2 Natural gas Coloured bottles (Productbenchmark) Glass furnace Natural gas Colourless bottles (Productbenchmark) CO 2 two productbenchmark-subinstallations 58

59 Examples subinstallations Division to carbon leakage status Natural gas Boiler CO 2 Production of milk in liquid form (non Carbon Leakage) Production of milk in solid form (Carbon Leakage) 59

60 Examples subinstallations Division to carbon leakage status CO 2 Natural gas Production of milk in liquid form (non Carbon Leakage) Boiler Natural gas Production of milk in solid form (Carbon Leakage) CO 2 60 Heatbenchmark-subinstallation carbon leakage Heatbenchmark-subinstallation non-carbon leakage

61 Examples subinstallations Non-ETS heat consumption part of the subinstallation installation CO 2 Natural gas Boiler Production process P1 (Carbon Leakage) Production process non-ets outside the installation (Carbon Leakage) 61

62 Examples subinstallations Non-ETS heat consumption is part of the subinstallation CO 2 installation Natural gas Boiler Production process P1 (Carbon Leakage) Production process non-ets outside installation (Carbon Leakage) One heatbenchmark-subinstallation 62

63 Example subinstallations All allocation methodologies combined Process emission installation Fuel Production P1 Carbon Leakage Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 63 Fuel Heat Electricity. Emissions

64 Examples subinstallations All allocation methodolgies combined Process emission Subinstallation 1 - Productbenchmark P2 Fuel Production P1 Carbon Leakage F = BM P2 x Production P2 Production P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 64 Fuel Heat Electricity. Emissions

65 Examples subinstallations All allocation methodologies combined Fuel Production P1 Carbon Leakage Process emission Subinstallation 2 -Heatbenchmark - Carbon Leakage F = BM heat x ( Q P1 + Q p2 ) Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 65 Fuel Heat Electricity. Emissions

66 Examples subinstallations All allocation methodologies combined Process emission Fuel Production P1 Carbon Leakage Subinstallation 3 -Heatbenchmark - Non carbon Leakage F = BM heat x Q exp. x 0,8 Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 66 Fuel Heat Electricity. Emissions

67 Examples subinstallations All allocation methodologies combined Process emission Fuel Production P1 Carbon Leakage Subinstallation 4 - Fuelbenchmark - Carbon Leakage F = Bm fuel x Fuel P1 Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 67 Fuel Heat Electricity. Emissions

68 Examples subinstallations All allocation methodologies combined Process emission Fuel Production P1 Carbon Leakage Subinstallation 5 - Process emissions - Carbon Leakage F = 0,97 x Emissions Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 68 Fuel Heat Electricity. Emissions

69 Examples subinstallations All allocation methodologies combined Process emission Fuel Production P1 Carbon Leakage No free allowances Production P2 P2 Benchmark Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 69 Fuel Heat Electricity. Emissions

70 Examples subinstallations All allocation methodologies combined Process emission Subinstallations: Fuel Production P1 Carbon Leakage 1.Productbenchmark 2.Heatbenchmark CL 3.Heatbenchmark non-cl 4.Fuelbenchmark CL 5.Hist. process emissions CL Production P2 P2 Benchmark (+ non-eligible emissions) Boiler MP Production P3 Carbon Leakage External consumer: non- ETS and non-cl Boiler HP Steam turbine Generator External consumer: electricity 70 Fuel Heat Electricity. Emissions

71 71 QUESTIONS???

72 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

73 Extensions and reductions During baseline period until Median not representative in case of significant changes Definition significant extensions/reductions: 1. Physical change within the installation, AND 2. a) more than 10% capacity increase/decrease, OR b) increase/decrease of at least 5% and allowances (per subinstallation!) Significant extensions/reductions until 30 June 2011? adjusted calculation method historical activity level (HAL) 73

74 Extensions and reductions Physical change Criteria: Physical: no operational or organisational changes, such as operating times, procesparameters Impact on technical configuration and functioning of installation (e.g. no painting) Replacement of installation components is no change, unless this results in changed capacity 74

75 Extensions and reductions During baseline period until Historical activity level (HAL) = Median baseline period without change + capacity change x historical capacity utilisation Capacity change Initial capacity = capacity after initial capacity = average 2 highest monthly productions before starting date Capacity after = average 2 highest monthly productions within the first 6 months after the starting date 75 Starting date Hist. cap. utilisation = 1 st day of continuous 90-day production period at more than 40% of the design capacity of the changed capacity = average capacity utilisation before starting date

76 76 Extensions and reductions

77 Extensions and reductions Determine median (HAL) without the change Production as if change dit not occur Division of production data: a) data linked to initial capacity b) data linked to extension/reduction 1. In case of a separate, new production line: actual production data per production line. 2. In case of modification existing production line: divide production data based on ratio initial capacity/new capacity 77

78 Extensions and reductions Example: physical change: starting date Determine extension Initial capacity (C_init) Average 2 highest monthly productions before tot Capacity after change (C_new) Average 2 highest monthly productions tot Capacity of extension (C_added) Determine median without extension and historical capacity utilisation Year Median Production HCUF = Historical capacity utilisation Production without extension (HAL_init) Default = HCUF * C_init If possible: measured values production without extension) Average capacity utilisation in : 100/ Determine historical activity level ,91*110 (default) 0,91*110 (default) , Historical activity level (90 * 0,91) HAL_init + C_added * HCUF 182

79 Extensions and reductions Less than two years of production within baseline period New entrants during baseline period Historical activity level based on capacity: Historical activity level = installed capacity * relevant capacity utilisation Installed capacity = average two highest monthly productions within the first 6 months after the staring date. If starting date after 30 June 2011 experimental verification Starting date = 1 st day of 90 day period of normal production with at least 40% of design capacity 79 Relevant capacity utilisation = capacity utilisation characteristic for sector and installation

80 80 QUESTIONS???

81 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

82 Step-by-step calculation allocation In several consecutive steps the final allocation per installation is determined: Per subinstallation: 1.HAL x Benchmark 2.Preliminary allocation: application of carbon leakage factor Per installation: 3.Preliminary allocation: sum of preliminary allocation of subinstallations 4.a. Final allocation: preliminary allocation x cross sectoral factor b. Final allocation electricity generators: preliminary allocation x linear reduction factor 82

83 Preliminary allocation Adaptation of preliminary allocation per subinstallation (HAL * benchmark) to be multiplied for every year in with relevant carbon leakage exposure factor (EF) For non-exposed sectors: decrease from 80 to 30% For exposed sectors : no decrease Year EF for carbon leakage sector EF for non-carbon leakage sector ,8 0,7286 0,6571 0,5857 0,5143 0,4429 0,3714 0,3 Per subinstallation: preliminary allocation (F, pre) per year (k) 83 F ( k) Fbasis, pre, subinst. subinst EF sub k ( )

84 Preliminary allocation Carbon leakage: heat transfer to non-ets installations If heat export to non-ets: allocation to producer Carbon leakage status of consumer is relevant Producer should check to what sector consumer belongs Status consumer is default: non-carbon leakage, unless ETS Q1 Non-ETS Non-CL or unknown X Allocation to producer EF = 0,80 0,30 for Q1 Q2 Non-ETS Wel CL sector X Allocation to producer EF = 1 for Q2 Evidence by producer! 84

85 Preliminary allocation installation Total preliminary allocation installation = sum subinstallations To be determined in national allocation decision Notification to European Commission (NIM) NIM: per subinstallation Preliminary allocation Installation Basis Installation A,product A Installation A, product B Installation A, heat i F pre, installation( k) Fsubinst, i 1 85 Installation A, total

86 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

87 Final allocation Cross-sectoral correction factor Sum of all preliminary allocations (without carbon leakage)eu-27 Industry CAP Cross-sectoral correction factor 87 Total allocation EU-27 must stay below the CAP Exception: heat from electricity generators

88 Final allocation Elektricity generators: linear reduction factor For electricity generators no transsectoral correction factor But: linear reduction factor of -1,74% per year Elektricity generators defined in Directive Installation labeled as electricity generator if: 1. No other Annex-I activity than combustion of fuels 2. Net export of electricity in any year in the period Allocation in 2013 is reference for -1,74% 88

89 Final allocation Adjusted national allocation decision After check by European Commission Application correction factor and reduction factor Publication adjusted national allocation decision Transfer of allowances on accounts per

90 90 QUESTIONS???

91 Content 1. Basic principles 2. Carbon Leakage 3. Subinstallations 4. Allocation with benchmarks 5. Examples of division in subinstallations 6. Extentions/reductions in the past 7. Calculation of preliminary annual allocation 8. Calculation of final annual allocation Allocation after

92 Allocation after Adjustment of national allocation decision After revision of Carbon Leakage list New entrants Significant extensions and reductions Cessation of operations (closures) Partial cessation of operations 92

93 Allocation after Revision of Carbon Leakage list Yearly addition of sectors possible Revision every 5 years possible (1 st time ) If necessary, adjustment allocation decision Only for installations in sectors concerned 93

94 Allocation after New entrants after 30 June 2011 Allocation based on initial capacity and - Productbenchmark : standard capacity utilisation - Others : relevant capacity utilisation Correction with linear factor of -1,74% Extensions and reductions after 30 Juni 2011 Only significant changes - physical change (one or more) - 10% or at least 5% and 50,000 allowances - on subinstallation level Allocation as for new entrant : for changed capacity 94

95 Allocation after Cessation of operations Installation no longer operating (not resumed within 6 months) Stop allocation, withdrawal of permit Partial cessation (no physical change) Reduction of activity level > 50% (subinstallation) - Subinstallation comprises > 30% of installation or - Subinstallation represents > 50,000 allowances Reduced activity level to 25-50% : 50% allowances Reduced activity level to 10-25% : 25% allowances Reduced activity level to < 10% : no allowances 95 Resumed production: initial allocation

96 96 QUESTIONS???

97 Further information CIMS (harmonised implementation measures on allocation) Guidance documents 1. General guidance 2. Allocation methodologies 3. Data collection 4. Verification 5. Carbon leakage 6. Cross-boundary heat flows 7. New entrants and closures (not published yet) 8. Waste gases 9. Sector specific guidance Template for baseline data report (Excel) Template for methodology report Presentations on Commission s website 97 en.htm

98 Data collection: reporting Jaap Bousema

99 Documents to be submitted 1. Report with baseline data Template available (Excel) 2. Methodology report Applied methodology (template available) 3. Verification statement Statement that data or free from material misstatements Who? all ETS-participants from When? submission MS to EC 30 September 2011, deadline for operators should be several months earlier

100 Data collection Overview template A_InstallationData B_SourceStreams1 C_SourceStreams2 D_Emissions E_EnergyFlows F_ProductBM G_Fall-back H_SpecialBM I_Comments J_Summary

101 Data collection Overview template A_InstallationData (baseline period, list subinstallations, list technical connections) B_SourceStreams1 (total direct emissions and energy input fuels) C_SourceStreams2 (see B) D_Emissions (attribution of emissions to subinstallations) E_EnergyFlows (attribution energy to fuel and heatbm-subinstall. CL and non-cl) F_ProductBM (historical production data and some tools) G_Fall-back (see F) H_SpecialBM (special data for special benchmarks) I_Comments (supporting docs and comments) J_Summary Not all files/cells relevant for every installation!

102 Data collection Data quality Best available data 1. Based on approved monitoring plan (fuel, NCV, EF, emissions) 2. Financial data sources a. Invoices b. Data part of financial audits c. Data reported to statistical agencies d. Documented operational protocols 3. Indirect data: correlation based on research/tests 4. Indirect data: correlation based on historical data 5. Missing parameters: conservative estimate (best practice) Guidance document 3: data collection

103 Data collection Data quality Missing data: - Conservative estimates - No more than 90% of values derived from extrapolation Measurable heat, not measured proxy values: - Energy input x measured efficiency - No efficiency data: default efficiency of 70% Attribution of data to subinstallations: - Usage time per year for each subinstallation - Mass or volume of individual products - Estimates based on the ration of free reaction enthalpies - Another suitable distribution key corroborated by a (scientifically) sound methodology. Aim: highest achievable accuracy!!

104 Methodology report Justification of reported data in baseline data report Required for all installations: Installation data and boundaries: description, attribution of units to subinstallations Source streams: methodology, data sources Technical connections Data quality and management (risk analysis, measures, highest achievable accuracy) Depending on allocation methodology and installation: Subinstallations, methodology, sources, avoiding overlap, missing daya, capacity determination, justification significant changes Waste gases/electricity 104

105 Data collection Verification Verifier should be accredited for emissions reports Verification concerns data report and methodology report Methodology report in accordance with CIM/Guidances (e.g. best available data) If the verifier has reasonable doubts regarding the approaches quality, but the derived data is correct based on the methodology, the doubts must be expressed in the verification report, but verification can still be positive Without positive verification statement no free allocation

106 Data collection Verification Definition material misstatements: substantially incorrect data (omission, wrong interpretation or error, except permissible uncertainty) in the submitted data that, based on the professional judgement of the verifier might have consequences ( ) for the calculation of the allocated allowances So: if no consequences for calculation no material misstatement

107 Further information CIMS (harmonised implementation measures on allocation) Guidance documents 1. General guidance 2. Allocation methodologies 3. Data collection 4. Verification 5. Carbon leakage 6. Cross-boundary heat flows 7. New entrants and closures (not published yet) 8. Waste gases 9. Sector specific guidance Template for baseline data report (Excel) Template for methodology report Presentations on Commission s website en.htm

108 108 QUESTIONS???