Data Consistency: EU-ETS/UNFCCCSetting the scene - EU ETS

Copenhagen – 9 February 2006

EU COM/EEA Workshop: Data Consistency National GHG Inventories & Reporting under the EU-ETS

Jochen Harnisch, EcofysJ.Harnisch@ecofys.de

EU-ETS: Dimensions of Consistency

• Legal consistency with scope of ETS Directive

• Quantitative consistency: national GHG inventories

• Conceptual consistency: inventory approaches in national GHG inventories

• Consistency with other emissions trading schemes

• Clear source attribution / identification between different inventories

• Compatibility with industy practices and GHG estimation protocols

• Tracking of installation based emission reduction measures in national inventory

Legal Framework of EU-ETS

• Objective: ETS to help Member States to meet EU Kyoto obligations cost-effectively

• Traded EU-Allowances will be backed by AAUs starting from 2008

• Direct emissions approach

• Installation based

Quantitative: Emission Factors

• EU-MRG 2004 require the use of site specific emission factors and NCV for most large installations

• Most significant deviations: coal, lignite, natural gas

• Observed deviations for bulk fuels: 1-10 %

• Random or systematic?

• Wealth of information available in spring 2006

• Careful analysis warranted offering opportunities to improve inventory quality

Quantitative: Oxidation Factors

• EU-MRG prescribe use of site specific oxidation factors for large installations using solid fuels

• Incomplete burnout: Most significant deviations: coal, lignite and peat – few percent max.

• Total impact on inventory: limited but sytematic

• Default factors for smaller installations and other fuels not always consistent with what MS use in the national inventories

Quantitative: Continuous Emissions Monitoring • Revised EU-MRG will contain an Annex on CEMS

• Can be used for CO2 and non-CO2

• Not widely used for CO2 and accompanied by

calculation based on fuel use

• Candidates for 2008-2012: N2O from production

of nitric acid and adipic acid

• Quantitative inconsistencies – but impact is likely to be limited

Conceptual: Transferred CO2

• ETS-Directive: Direct emissions from installations

• EU-MRG 2004 provide few constraints to deduction of CO2 from an installation

• No requirement of long term storage

• To be reported as memo-item

• Backing of EUAs with AAUs leads to inconsistency in the case of most cases of “transferred CO2”

• Carbon Capture and Storage: Similar situation but potentially much larger volumes

Source Identification / Attribution

• ETS - reporting by installations includes codes from IPCC-Source Categories and EPER for each activity

• However, operators and competent authorities are unfamiliar with IPCC and EPER systems

• From one installation emissions for different categories may occur but are unlikely to be consistently attributible

• Further methodoligal improvement and guidance on diffentiation for individual activities

Recognition of ETS Reductions

• ETS helps to find the most cost-effective reduction options across the ETS-sector

• However – consideration in national ghg inventory not granted, e.g.:

- Fuel switch between fuel sub-categories

- Shifting of biomass fuels between sectors

- Use of alternative raw materials

- Non-CO2 ghg abatement in opted-in sectors

• Main criterion today: Measure mirrored in national energy statistics

Linking of ET Schemes• Internationally, a diversity of mandatory and voluntary ET

schemes is evolving

• Most are national or multi-national

• However, also entire sectors like aviation are under discussion for integration / linking

• Linking with other ETS schemes likely to be limited to parties which have ratified the KP

• National ghg inventories are likely to provide the “anchor” for schemes

• Lithmus test: level of consistency with national inventories?

Challenges• Appropriate use of the wealth of information from EU-ETS

to improve inventory quality

• Avoid losses of AAUs from countries because of loopholes and inconsistencies

• Avoid situations of investments or fuel switch without result in national ghg inventory

• Improve assignment & identification of emissions

• Common communication line for inventory reviews and potential adjustment procedures

• Recommendations for review of EU-MRG for second trading period

Thank you for your attention!

Contact:

Jochen Harnisch

Ecofys GmbH

phone: +49 911 994358-12

e-mail: j.harnisch@ecofys.de