Use of ETS data in GHG emission reporting Krzysztof Olendrzyński

1. Use of ETS data in GHG emission reporting • Krzysztof Olendrzyński • what „new” Emission Trading Scheme has brought to GHG emission inventories? data (in)consistency issue • objectives, results and recommendations from „Data consistency between GHG inventories and reporting under EU ETS” Copenhagen 9-10 February 2006 • recommendationsrelevant for GHG emission reporting under UN FCCC and Kyoto Protocol • VERTIC/REC Workshop on fulfilling monitoring and reporting requirements under the UNFCCC and the Kyoto Protocol 9-10 October 2006

2. Before implementation of ETS: public statistics > mostly top-down energy balances > GHG emission inventories (plant level data collection system) > during implementation of ETS (2005 emission data reporting): public statistics > combination of top-down energy balances > and bottom-up (plant level data collection system) > GHG emission inventories ETS/NAP data >

3. Data (in)consistency- where is it? Do two sets of comparable sectoral activity and emission totals (ETS vs. GHG) match? • * hypothetical numbers • Questions: • - Are there any (significant) differences between numbers in the corresponding columns? • - How big a difference is significant? Sources of differences? • - Any adjustments needed? Where and how to make them? • ETS data difficult to be questioned because of verification; GHG inventories need to be adjusted accordingly • Most probably the public (media, NGOs, etc) will attempt to make similar comparisons ignoring • technical problems identified by experts (limited comparability due todiff. definitions, scope, coverage)

4. Workshop organization: • Terms of Reference and a questionnaire prepared by ETC/ACC, EEA and DG ENV were discussed and approved during joint WG1/WG3 meeting and then distributed among MS • 13 MS sent their responses to questionnaire • participation: representatives from 18 MS plus NOR, BUL; ETS, GHG inventory and energy balance experts • 8 MS (FRA, CZE, FIN, GER, UK, DK, NL, IRE) volunteered to give presentations on their experiences

5. Workshop objectives: MS perspective: • to look at issues concerning data flow and integration of data • to exchange experiences on data consistency • to explore ways to improve GHG emission inventories • Commission perspective: • to check if there is a need to amend EU legislation e.g. Decision 280/2004/EC and its implementing provisions? • to find out if any actions is needed on the EU level to ensure credibility of the EC inventory and to avoid any negative feedback from UNFCCC reviews?

6. Responses to questionnaire: • Institutional setup • Methodological differences between GHG inventories and ETS • Time series recalculations in GHG inventories (including the base year) • Confidentiality of ETS data • Energy balance data, links to public statistics and other emission reporting systems

7. Institutional setup • in some Member States the same institutions/organizations or bodies (but usually different teams) are responsible for the national GHG emission inventories and implementation of EU ETS (NAP, national registry), while in others, there are different ones • to a large extent, the institutional arrangements determine whether and how the data are exchanged (confidentiality) between ETS and GHG groups (in some cases also LCP/EPER) • involvement of public statistics bodies in GHG/ETS? (for verification); existing national bottom-up (plant level) data collection system? links of National Inventory System (under the Kyoto Protocol/UN FCCC) already in use – in some MS - with ETS • NAP data collection made mostly by survey(s)/questionnaires

8. Methodological differences between GHG and ETS •MS report mostly complete coverage of GHG sectors by the respective ETS sectors: refineries, cement, lime, iron and steel, coke ovens; other sectors are subject to threshold induced differences •sectors in which differences were identified include: cement/clinker production, lime production, iron&steel and ceramics – basically in the IPCC Industrial Processes sector for which - in GHG inventories - nationally averaged EFs are used while ETS data are plant specific • sources of identified differences include: AD, EFs and oxidation factors (OF); default OFs differ slightly between IPCC and ETS

9. Time series recalculations in GHG inventories including the base year • a few MS already made recalculations going back to base year while several other plan to do so in 2006; sectors recalculated include: refineries and several subsectors in Ind. Proc. category: e.g. lime, coke plants and blast furnaces • in case GHG includes sectoral average EFs for fuels, the recalculations may also affect the IPCC Energy sector (especially 1A1 and 1A2). • recalculated base year emissions are sometimes lower and sometimes higher than earlier estimates Confidentiality of ETS data • confidentiality is considered to be a problem only in selected MS and concerns mainly production statistics in Industrial Processes sector of GHG; the extent of confidentiality issue may depend on requests of operators

10. Energy balance data; links to public statistics and other emission reporting systems • few MS report any formal links between ETS/GHG and national energy statistics on a plant level; in some countries data collected for NAP/ETS are used by statistical authorities for verification purposes • several MS maintain that analysis/comparison of AD data (especially for 1A1 and 1A2) between GHG and ETS should be combined with analysis of respective elements of national energy balances • only few MS use data collected in ETS for other reporting obligations: LCP/EPER (or vice versa) but do not perceive this as a problem with ensuring consistency for various reporting obligations

11. Workshop recommendations: Legal issues: MS and the Commission should: • raise awareness in the industry on the implications of the Aarhus Convention and the rules of public access to environmental information in relation to ETS monitoring reports • clarify the rules on the public access to ETS monitoring reports • aim to align reporting requirements under different Directives to the extent possible to reduce the burden on operators and MS and ensure consistency between different reports

12. investigate the possibility for reporting CO2 emissions from parts of an installation not covered under the trading scheme as a memo item in the EU ETS Monitoring and Reporting Guidelines or the annual monitoring report • assess the possibility of having a link to the use of ETS data in the energy statistics; regulation currently under preparation

13. explore the appropriate use of results from accredited and non-accredited laboratories in country specific inventory methods • should harmonise the list of fuels and relating definitions used in inventories, ET and energy balances to the extent possible • consider using ETS activity data for the fulfilment of other reporting obligations including E-PRTR, LCP, NEC and non – GHG national inventories • make appropriate use of ETS data in the context of reporting under relevant UN Conventions

14. Consistency between various reporting: • consistency of ETS data, national inventories and energy balances should be considered and significant differences should be explained in the national inventory report • stringent Quality Control procedures should be devised to ensure consistency between ETS, NIR and EB • National Inventory System should include provisions for the use of ETS data

15. the use of oxidation factors in GHG inventories, ETS and second National Allocation Plans needs further analysis; oxidation factors used in the second national allocation plans need to be determined as the highest priority • MS should use the best available oxidation factors for national inventories and are not required to use default oxidation factors included in the MRG; the basis of oxidation factors used in the inventory should be explained in NIR

16. Use of ETS data in Energy Balances: MS should: • take fuel consumption and NCV in sectors covered by the ETS into account when compiling national energy statistics to the extent possible. • arrange access to ETS data classified as confidential by the Competent Authority to compilers of energy balances if necessary. • consider using ETS data to include more detailed information on ‘other fuels’ in energy balances.

17. Use of ETS data in national inventories: MS should: • set up institutional arrangements which ensure access to ETS monitoring data by inventory agencies • ensure that fuel consumption, net calorific values, oxidation factors, emission factors and activity data in sectors covered by the ETS are available to inventory compilers • arrange access to ETS data classified as confidential by the Competent Authority to inventory agencies if necessary • explain in their national inventory reports how ETS data is used in GHG inventories and how consistency is achieved or explain any differences

18. consider updating inventory emission and oxidation factors using ETS data; care should be taken in updating national EF which should only be changed on a solid and representative basis • consider using ETS data to improve completeness and accuracy of their inventory; this relates in particular to flares, limestone and dolomite use, other carbon feedstock, soda ash use, combustion of waste and residual fuels • consider using ETS data to better differentiate between subcategories in inventories • compare the relevant sectors of the GHG inventories with ETS data and provide the necessary resources for doing so • explore ways of assessing differences in absolute and/or relative terms discovered between inventory and ETS data

19. consider compiling national inventories based on ETS monitoring data for sectors with good coverage in the trading system; this could apply to: refineries, iron and steel, cement production and coke ovens amongst others • report NCV, emission and oxidation factors used in GHG national inventories transparently to facilitate use by operators under the EU ETS and comparison with ETS data

20. You can find more info on the Workshop at: http://air-climate.eionet.eu.int/docs/meetings/060209_cons_GHGinv_ rep_EU-ETS_WS/meeting060209