1. Presentation to the
UKCCSC Winter School
Thursday 12th January
2012
By
Andrew Ritchie
Climate Change Services
Manager, LRQA Ltd
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2. Content
Discussion on three areas:
1. Carbon Capture & Storage in the EU Emission Trading Scheme
2. Carbon Capture & Storage in the Clean Development Mechanism
3. Verification
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3. Carbon Capture & Storage in the
EU Emissions Trading Scheme (1)
So what is EUETS and how does it work.
• The EU ETS is one of the policies introduced across the European Union (EU) to help it
meet its greenhouse gas emissions reduction target under the Kyoto Protocol. The EU
has to make an eight per cent reduction on 1990 levels by the first Kyoto Protocol
commitment period (2008 - 2012).
• The EU ETS commenced in 2005 and is the largest multi-country, multi-sector
greenhouse gas emissions trading system in the world. It includes around 11,000
installations (excluding aviation) accounting for about 45 per cent of EU carbon dioxide
(CO2) emissions.
• An overall limit, or 'cap', is set by Member State's Governments on the total amount of
emissions allowed from all the installations covered by the scheme. The allowances are
then distributed to the installations in the scheme.
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4. Carbon Capture & Storage in the
EU Emissions Trading Scheme (2)
• At the end of each year, operators are required to ensure they have enough allowances
to cover their installation's emissions. They have the flexibility to buy additional
allowances (on top of their free allocation), or to sell any surplus allowances generated
from reducing their emissions.
• Installations covered by the EU ETS are those which carry out activities listed in Annex I
of the EU ETS Directive. These include energy activities, production and processing of
ferrous metals, mineral industries and pulp and paper industries.
• The EU ETS Directive requires all installations carrying out activities listed in Annex I to
hold a greenhouse gas emissions permit. The conditions of the permit will require
installations to monitor and report emissions in accordance with the Commission's
guidelines for monitoring and reporting.
• Each year emissions data must be verified, and the equivalent number of allowances
surrendered. All transactions and surrendering of allowances take place on a national
registry.
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5. Carbon Capture & Storage in the
EU Emissions Trading Scheme (3)
Documents to consider:
• Commission Decision 2007/589/EC of 18 July 2007 establishing guidelines for the
monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC
• Commission Decision of 8 June 2010 amending Decision 2007/589/EC as regards the
inclusion of monitoring and reporting guidelines for greenhouse gas emissions from the
capture, transport and geological storage of carbon dioxide
• Directive 2009/31/EC of 23 April 2009 on the geological storage of carbon dioxide
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6. Carbon Capture & Storage in the
EU Emissions Trading Scheme (4)
Directive 2009/31/EC defines the following:
• Selection of storage sites and exploration permits
• Storage permits (application process, conditions, etc)
• Operation, closure and post-closure obligations
• CO2 stream acceptance criteria and procedure
• Monitoring
• Reporting
• Measures in case of leakages or significant irregularities
• Closure & post-closure obligations
• Annex II – Criteria for establishing and updating the monitoring plan
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7. Carbon Capture & Storage in the
EU Emissions Trading Scheme (5)
The Commission Decision of 8 June 2010:
• Defines what is meant by ‘Transferred CO2’
• Creates 3 new annexes to the Decision 2007/589/EC (known as the ‘MRG’) which
define:
• Boundaries – these will be defined in the Permit for the installation issued by the
competent authority
• How CO2 amounts transferred/emitted/leaked will be determined
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8. Carbon Capture & Storage in the
EU Emissions Trading Scheme (6)
Key documents for a CCS Installation will be:
• Permit issued by the Competent Authority
• Monitoring Plan
• Improvement Plan
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9. Carbon Capture & Storage in the
Clean Development Mechanism (1)
So what is CDM and how does it work.
• The CDM allows emission-reduction projects in developing countries to earn certified
emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs
can be traded and sold, and used by industrialised countries to a meet a part of their
emission reduction targets under the Kyoto Protocol.
• The mechanism stimulates sustainable development and emission reductions, while
giving industrialised countries some flexibility in how they meet their emission reduction
limitation targets.
• The CDM is the main source of income for the UNFCCC Adaptation Fund, which was
established to finance adaptation projects and programmes in developing country
Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of
climate change. The Adaptation Fund is financed by a 2% levy on CERs issued by the
CDM.
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10. Carbon Capture & Storage in the
Clean Development Mechanism (2)
Simplified CDM process:
• Project Participant (PP) designs an emission reduction project and prepares a Project
Design Document (PDD) in accordance with the scheme requirements and a specific
methodology
• A Designated Operational Entity (DOE) validates the PDD (including a visit to the site
and review of data) and recommends registration of the project to the Executive Board.
• The Executive Board registers the project as a CDM project.
• When the project has achieved emission reductions, the PP produces a Monitoring
Report (MR)
• A DOE verifies the emissions reductions in the MR and recommends issuance of the
Certified Emission Reductions (CERs) to the Executive Board.
• The Executive Board approves issuance and the PP receives their CERs.
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11. Carbon Capture & Storage in the
Clean Development Mechanism (3)
Documents to consider:
• Decision 3/CMP.1 Modalities and procedures for a clean development mechanism as
defined in Article 12 of the Kyoto Protocol
• Draft decision -/CMP.7 Modalities and procedures for carbon dioxide capture and
storage in geological formations as clean development mechanism project activities
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12. Carbon Capture & Storage in the
Clean Development Mechanism (4)
Draft decision -/CMP.7 defines the following:
• Participation requirements
• Validation and registration
• Monitoring
• Verification and certification
• Issuance of certified emission reductions
• Addressing non-permanence
• Additional requirements covering:
• Selection and characterisation of the geological storage site
• Risk assessment, monitoring, liability, etc
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13. Carbon Capture & Storage in the
Clean Development Mechanism (5)
Key documents for a CDM Project will be:
• Project Design Document
• Methodology
• Monitoring Plan
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14. Verification
How does Verification fit in to EUETS and CDM?
• In EUETS, it is a requirement of section 10 of Annex I of Decision 2007/589/EC for a verification to
be undertaken by an accredited third party to enable the verifier to come to a verification opinion
that states with reasonable assurance whether the data in the emissions report is free from
material misstatements and whether there are no material non-conformities.
• In CDM, it is a requirement of Modalities and Procedures for a CDM as defined in Article 12 of the
Kyoto Protocol for
• Validation of a project activity by a designated operational entity;
• Verification by the designated operational entity of the monitored reductions in anthropogenic
emissions by sources of greenhouse gases that have occurred as a result of a registered
CDM project activity during the verification period.
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15. Verification
So what is Verification?
• The methodology to provide reasonable assurance of the reliability,
credibility and accuracy of monitoring systems and the reported data and
information relating to emissions
• It enables a verifier to state that the data is ‘free from material misstatement’
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16. Completeness Transparency
Boiler
Standby Generator
Production Boiler
Process
Boiler
Site Boundary Fence
Consistency Trueness (or Accuracy)
vs
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17. Verification Strategic
Analysis
The Verification Process Risk
Analysis
• Strategic Analysis (SA)
• Risk Analysis (RA)
• Verification Planning Verification
Planning
• Process Analysis
• Report
Process
Analysis
Verification
Report
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18. Verification
Benefits of 3rd Party Verification
• Verification
• provides credibility, trust and confidence
• ensures good quality data that is free from material misstatement
• 3rd Party Verification
• enables greater coverage of installations and data
• provides greater efficiency
• utilises experience
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19. Any questions?
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