COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document COMMISSION REGULATION (EU) No …/.. of XXX on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council COMMISSION REGULATION (EU) No …/.. of XXX on the verification of greenhouse gas emission reports and tonne-kilometre reports and the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council
Date: 2012-06-21
Institutions: European Commission
Subjects: access to information, administrative check, atmospheric pollutant, audit, disclosure of information, environmental monitoring, environmental statistics, greenhouse gas, reduction of gas emissions, technical standard














EUR-Lex - 52012SC0176 - EN











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52012SC0176

COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document COMMISSION REGULATION (EU) No …/.. of XXX on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council COMMISSION REGULATION (EU) No …/.. of XXX on the verification of greenhouse gas emission reports and tonne-kilometre reports and the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council /* SEC/2012/0176 final */









COMMISSION STAFF WORKING PAPER
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Accompanying the document
COMMISSION REGULATION (EU) No …/..
of XXX on the monitoring and reporting of greenhouse gas emissions pursuant to
Directive 2003/87/EC of the European Parliament and of the Council
COMMISSION REGULATION (EU) No …/.. of XXX on the verification of greenhouse gas
emission reports and tonne-kilometre reports and the accreditation of verifiers
pursuant to Directive 2003/87/EC of the European Parliament and of the Council
1.         PROBLEM DEFINITION
Problem definition has already been carried
out in the context of the impact assessment accompanying the proposal for
Directive 2003/87/EC of the European Parliament and the Council (EU ETS), as
amended by Directive 2009/29/EC of the European Parliament and the Council (EU
ETS Review), which establishes a scheme for greenhouse gas emission allowance
trading within the Union in order to promote reduction of greenhouse gas
emissions in a cost-effective and economically efficient manner. 
Monitoring and Reporting
Installation level monitoring and reporting
is one of the pillars of the emissions trading system, as required by Article
14 of the EU ETS Directive (Directive 2003/87/EC). Decision 2007/589/EC
establishing guidelines for the monitoring and reporting of greenhouse gas
emissions (hereafter MRG) contains standard requirements for the monitoring and
reporting of greenhouse gas emissions for installations covered under the ETS Directive.

The analysis carried out in the impact
assessment for the preparation of the draft EU ETS Review Directive[1],
identified a range of different implementations and applications of monitoring
and reporting requirements by Member States and Competent Authorities (CAs).
The overall conclusion was that there was not a level playing field across the
Union in terms of monitoring and reporting, resulting in different levels of
accuracy. The absence of a level playing field and the resulting inaccuracies
could jeopardise the environmental integrity and the credibility of the system
and be likely to incur higher costs than necessary.
Furthermore, evaluation projects carried
out on behalf of the Commission and several Member States had identified a lack
of transparency, of information on quality and of consistency as possibly
leading to mistrust, as well as to additional costs, as the main challenges for
the further development of the EU ETS compliance process. In addition, the
resulting/ existing system was found to be weaker due to varying monitoring and
reporting regulations and responsibilities in the Member States. 
Verification and Accreditation of
verifiers
In the context of the verification and
accreditation of verifiers similar problems were identified[2].
The verification of monitoring reports is important, otherwise, operators
underestimating their emissions would not only benefit (surrendering less
allowances than required), but would also undermine the environmental integrity
of the system. The EU ETS Directive and Decision 2007/589/EC establishing
guidelines for the monitoring and reporting of greenhouse gas emissions
(hereafter MRG) only regulated some fundamental requirements and aspects of the
verification process. For the remainder it was left to individual Member States
to develop specific national verification guidance. The accreditation of
verifiers showed a similar diverse picture with Member States adopting a wide
range of standards for the accreditation of verifiers. These inconsistencies
resulted in the absence of a level playing field and an ineffective internal
market, resulting in higher costs or undue obstacles, especially for verifiers
willing to provide their services in different Member States.
The role of accreditation will be aimed at
improving the quality level of verification of annual emission reports and at
the same time ensuring overall harmonisation within the system as regulated by
Article 15 of the EU ETS Directive. In this context the draft Accreditation and
Verification Regulation refers to the existing broader legal framework for
accreditation provided by Council Regulation 2008/765/EC of 9 July 2008, and in
particular to Article 4.1 where it states that " Each Member State shall
appoint a single national accreditation Body" and Article 13 where it says
that “The Commission shall ensure that sectoral schemes identify the technical
specifications necessary to meet the level of competence required…..”. Such a
regulation was covered by an impact assessment too[3].
Subsidiarity principle
Union action, as set in the two proposed
Regulations, is justified and necessary in respect of the subsidiarity
principle for the following reasons:
The transnational nature of climate change
and the need to create a robust, comparable and coherent system of monitoring,
reporting and verifying of emissions within the Union is an important element
in determining the need for a Union action. National actions alone would not
ensure effective compliance with the requested commitments and would also not
suffice for the fulfilment of the objectives referred to in Directive
2003/87/EC and the achievement of the targets set in that Directive. Therefore
it has been necessary to create the enabling framework at Union level. The two
proposed implementing regulations are necessary to establish harmonised
reporting methodologies, to the extent possible, concentrating on the most
cost-effective requirements while creating the appropriate conditions for
mutual recognition. Improvements to the reporting efficiency are a key element
for achieving the GHG emissions reductions targets. The reduction of GHG
emissions requires coordination across a full range of instruments, the
definition of common criteria and common timeliness of reporting to allow the
fair consolidation of Member States data at Union level. The coordination of
twenty seven different systems would entail more costs than the creation of a single
harmonised system. 
As the overarching commitments are made at
the Union level, it is also more effective to develop the required reporting
instruments as well as the conditions for verification and for the
accreditation of verifiers. Action at Union level would produce clear benefits
compared with action at the level of Member States notably by reducing the
risks of gaps, loopholes, leakage or double counting. Furthermore, action at
the Union level is the best way to ensure a level playing field, thus allowing
verifiers to provide high quality service across the whole of the Union
Proportionality principle
The proposal complies with the
proportionality principle for the following reasons:
The two proposed Regulations do not go
beyond what is necessary in order to achieve the objectives of improving
climate change data quality and ensuring independent and impartial verification
by accredited and competent verifiers in line with the requirements set out in
Articles 14 and 15 of Directive 2003/87/EC.
Furthermore, the proposals contribute to
the Union's overall objective of reaching the Union's Kyoto greenhouse gas
emission reduction targets, the Union targets enshrined in the Climate change
and Energy package, the Copenhagen Accord and Decision 1/CP.16 ("Cancun
Agreements").
The proposals foresee a set of rules for
the implementation of monitoring and reporting on ETS GHG emissions as well as
for a verification and accreditation system for verifiers that is fully in
line, as regards practices and procedures, with the needs and capacities of the
installations, operators and aircraft operators, including a consistent set of
provisions in favor of smaller installations.
The present Impact Assessment has been
revised in accordance with the Opinion of the Impact Assessment Board, and the
recommendations therein. The Opinion was delivered following a written
procedure on 22 July 2011 subsequent to DG Climate Action's written reply to
the initial Impact Assessment Quality Checklist (IAQC) issued by the Impact
Assessment Board on 19 July 2011. Proper responses have been given to the
issues raised by the IAQC especially with respect to: using illustrative
examples to the problem definitions; defining examples of "SMART"
objectives; better defining the policy options; trying to assess the cost and
benefits of proposed changes; better compare options with overview tables;
having a separate section on subsidiarity and proportionality. The revised IA
will be published in accordance with Regulation (EC) No 1049/2001 of the
European Parliament and of the Council. No part of the Impact Assessment is
subject to confidentiality.
2.         MONITORING AND REPORTING
REGULATION
2.1.      General policy objectives 
The main objectives were identified already
in the impact assessment accompanying the proposal for Directive 2009/29/EC.
These are: 
·                        
Ensuring a common approach with respect to
monitoring and reporting in order to guarantee environmental effectiveness and
integrity of the system and improving cost-effectiveness; 
·                        
Seeking higher consistency and transparency,
which, in the long-run, can lead to savings for all stakeholders involved; 
·                        
Improving cost effectiveness of monitoring and
reporting standards, since they are assumed to enhance the trust in the reports
to the market and would thereby positively albeit indirectly affect the
efficiency of the market.
2.2.      Policy options
2.2.1.   Uncertainty Assessments
There is no common understanding among
Competent Authorities, operators and verifiers of how to assess the uncertainty
related to the measurement of existing equipment or analyses. 
Option 1: Maintain the existing requirements of the MRG with respect to
"Uncertainty Assessment". ("No policy change")
Option 2:
Make current approaches considerably more pragmatic and comparable. The result
will be to put more focus on other quality criteria, such as: correct
installation of equipment, maintenance and calibration of instruments.
("Comprehensive policy change")
The M&R Regulation clarifies to what
extent proof of uncertainty assessment should be submitted in the Monitoring Plan,
how it should be assessed by the Competent Authority and what needs to be
reported in the Annual Emission Report. Scope for more straightforward
approaches is accommodated for smaller emitters and simple installations,
building on the basis already formulated in the MRG. Option 2 is retained.
2.2.2.   Harmonised
interpretation of unreasonable costs 
The definition in section 2 MRG on unreasonable
cost, is interpreted differently by MS. 
Option 1:
Maintain the requirements of the old definition of the MRG. ("No policy
change")
Option 2:
Clarify how to calculate and compare cost and benefit of a monitoring
methodology. Costs have to include economic depreciation period. Benefit must
be calculated as improvement factor multiplied by reference price. In order to demonstrate how reasonable or unreasonable the costs of
implementing a measure(s) to meet the highest tiers[4]
would be, an Operator should evaluate the costs of implementing measures to
improve metering, sampling and/or analytical accuracy against the benefits
obtained. ("Limited policy change"). Option
2 is retained.
2.2.3.   Transfer
of CO2
The current provisions in the MRG can lead
to leakage of CO2 from the system and to inconsistencies with
national inventories, as many activities cannot be mirrored there. A common
understanding of the implementation of the provisions on transferred CO2
does not exist. 
Option 1:
Maintain the requirements of Section 5.7 of the MRG. ("No policy
change")
Option 2: Provision
to subtract transferred CO2 from reported emissions will only be allowed in the
case of transfers to carbon capture and storage activities (where longer term
retention is assured and remains controlled within EU ETS). Option 2 is
retained.
2.2.4.   Treatment
of solid and liquid biomass, including sustainability criteria
The EU-ETS Directive already establishes
that 'biomass' has an emission factor of zero; therefore, to result in zero reportable
CO2 emissions. Biomass for the EU ETS purposes is currently only
defined in the MRG. This definition needs to be updated to be better aligned
with a more common European definition of biomass and with renewable energy
policy. In particular to prevent continued use of certain biofuels and
bioliquids which are now considered unsustainable. The renewable energy
directive 2009/28/EC (RED) established sustainability criteria for biofuels and
bioliquids, where renewable energy through biomass use is economically
supported. Three options have been considered. 
Option 1: Retain the MRG definition. ("No policy change") There
will be no consistency with the RED. This option will continue to favour a
limited approach to biomass and jeopardise the integrity of EU ETS.
Option 2: Change
to a RED compatible definition but without commitment to sustainability
criteria. This approach will retain the 0 rating for biomass but it will not
open up to the sustainability criteria. ("RED definition only") This
option will answer only partially the consistency issue with the RED and
continue to jeopardise the integrity of EU ETS.
Option 3: Change to a RED compatible definition and requirement for biofuels
and bioliquids to meet RED sustainability criteria in order to qualify for zero
rating. This option will satisfy the RED and address sustainability criteria
for biofuels and bioliquids, for which EU criteria have been developed.
Economic incentives supporting the sustainability criteria will have a positive
effect lowering the economic and administrative impact ("RED definition
plus sustainability criteria for biofuels, bioliquids").
Any other additional option that could be
developed will anticipate possible future policy changes that will go far
beyond the scope of the present implementing measure. In particular introducing
in the EU ETS the use of sustainability criteria for solid biomass is not a
viable option at this stage due to the fact that are no mandatory European wide
sustainability criteria and most supply is on a small and highly dispersed
scale. Option 3 is retained as the basis to organise Monitoring and
Reporting.
2.2.5.   Sampling
Approach and Frequency
The MRG contains pragmatic indications for requirements
on sampling and how to set the sampling frequency where the characteristics of
materials are to be determined by analysis (e.g. the carbon content). However,
in practice there is no common understanding among different MS on how to
implement the sampling requirements.
Option 1: Confirm
the pragmatic approach of the MRG. ("No policy change").
Option 2: Clarify
the sampling requirements and assess applicability of standards. Specifically,
the operator shall submit a sampling plan to the Competent Authority for
approval for each fuel or material. This approach will be preferable in the
medium-long term but unfortunately, at the moment, it is not possible develop
it in the framework of the preparation of the present M&R Regulation. This
is due to lack of knowledge and time constraints. Further work in this sense
could be carried out within the forthcoming guidance material accompanying the
implementation of the M&R Regulation. Option 1 is retained.
2.2.6.   Reporting
of Production Related Data
According to
Article 14(2) of the ETD: “The regulation […] may also specify requirements
for operators to report on emissions associated with the production of goods produced
by energy intensive industries which may be subject to international
competition. That regulation may also specify requirements for this information
to be verified independently. Those requirements may include reporting
on levels of emissions from electricity generation covered by the Community
scheme associated with the production of such goods.” 
Option 1: Do not specify the monitoring requirements in the M&R
Regulation. ("No policy change"). Option 1 will maintain the focus of
the regulation on GHG emissions confirming the environmental integrity and
effectiveness of the system. 
Option 2:
Implement the production related data monitoring requirements. Develop
respective reporting requirements for production data and power consumption.
Develop respective definitions. ("Comprehensive change") The M&R
Regulation is looking at GHG annual emissions. Monitoring and reporting of
production related data will be better placed in the context of the so called
"benchmarking" Decision[5]. Option 1 is retained.
2.2.7.   Simplified
Procedures and Requirements
Option 1: Maintain
current simplified requirements of the MRG. ("No policy change") This
option will not be sufficient in ensuring cost effectiveness for small emitters
especially for its unequal implementation at the level of the Member States.
Option 2: Further
simplified procedures and requirements will be
developed. The main one is that the operator may submit
a simplified monitoring plan to the Competent Authority. There will be an exemption concerning the improvement report for low
emitting installations (less than 25,000 tonnes CO2 per year
excluding biomass and before any subtraction of transferred CO2).
The regulation will also make provision to allow simplified monitoring
methodology for simple installations. This will determine lower costs for small
emitters. Option 2 is fully in line with the original requirements set-up by
the IA of Directive 2009/29. Option 2 is retained.
2.2.8.   Application
of the Improvement Principle
Option 1: Maintain the MRG current requirements on the application of the
Improvement Principle. ("No policy change") This option results in
uneven implementation of the improvement principle. In this way dynamic and
qualitative development of the EU ETS monitoring and reporting will not be
ensured. 
Option 2:
Enhance the application of the improvement principle introducing, as part of
the verification process, clear proposals to account for recommendations for
improvement of the monitoring methodology and outstanding non-conformities and
misstatements. ("Limited change") Option 2 is fully in line with the
original requirements set-up by the IA of Directive 2009/29. Option 2 is retained.
2.2.9.   Information
Technology
The legal basis for the use of IT / data
exchange for MRV is the following text from the revised EU ETS Directive 2009/29/EC
Article 14(4): “The Regulation referred to in paragraph 1 may include
requirements on the use of automated systems and data exchange formats to
harmonise communication on the monitoring plan, the annual emission report and
the verification activities between the operator, the verifier and competent
authorities.”
Option 1: No
action is taken and the situation remains as it is in the MRG where an
electronic protocol on the reporting of emissions has not been published. ("No
policy change") This option will continue to promote an unequal approach
to the use of IT in the framework of ETS MRV and it will hamper the process of
comparability and exchange of best practices among operators.
Option 2: The Commission publishes standardised electronic templates or file
format specifications for the purpose of submitting monitoring plans, annual
emission reports and tonne-kilometre data report. The Commission activates appropriate
quality control and procedures for the maintenance of the electronic
templates and file format specifications it publishes. ("Limited
policy change")
Best practices of IT systems and advanced
templates with built-in, automated controls have the potential to substantially
strengthen and improve the EU ETS compliance structure and practice. 
Option 2 is fully in line with the original
requirements set-up by the IA of Directive 2009/29. Option 2 is retained.
2.3.      Assessment
of cumulative impacts of preferred options
Ensuring a common approach in order to guarantee environmental effectiveness and integrity of
the system and improving cost-effectiveness. Meeting this objective will lead
to higher distributional equity among installations across the EU. The selected
policy options should all contribute to less discretion for Competent
Authorities in considering monitoring and reporting plans and therefore greater
equity in the way operators are treated and requirements are imposed upon them.
Seeking higher consistency and
transparency, which, in the long-run, can lead to savings for all the
stakeholders involved. Under the status quo option for monitoring, inconsistent
approaches developed under the MRG will continue to advantage installations in
some Member States over similar installations in other Member States,
potentially affecting their competitiveness. The broad range of approaches to
permitting and compliance within different Member States has the potential to
cause competitiveness concerns and a corresponding loss of confidence in the EU
ETS. The favoured options should all provide greater certainty of requirements,
leaving Member States, operators and verifiers less leeway for variations. 
The simplification of the existing
provisions will further enhance the transparency of the system.
Improving cost effectiveness of
monitoring and reporting standards, since they are
assumed to enhance the trust in the reports to the market and would thereby
positively albeit indirectly affect the efficiency of the market. The selected
policy options will deliver greater cost effectiveness and trust in the system
by clarifying requirements associated with currently known areas of ambiguity
and by confirming, where reasonable, allowed simplifications.
Finally we have to state that costs have
been considered in isolation. Accumulated cost consideration would not be
scientifically sound and would not particularly add value as we are looking to
justify selection of a particular option within standalone operational
objectives.
With respect to the 9 M&R topics below
5 categories have been developed in relation to perceived effects on necessary
man-power and financial cost resources. The categories were validated through
selected interviews with representatives from Competent Authorities, Verifiers
and ETS Compliance Forum Secretariat.
I.       Significant reduction in costs and
necessary resources.
II.      Some reduction in costs and necessary
resources
III.     No expected change in costs and necessary
resources
IV.    Some increase in costs and necessary
resources
V.      Significant increase in costs and
necessary resources
Overview table
 Policy options || No Policy Change || Change || Costs/savings 
 Uncertainty Assessments || Maintain MRG || Pragmatic change * || Category I 
 Unreasonable costs || Maintain MRG || Clarify how to calculate * || Category II 
 Transfer of CO2 || Maintain MRG || Regulate transfer * || Category III 
 Solid and liquid biomass || Maintain MRG || Update biomass definition including sustainability criteria* || Category IV 
 Sampling Approach and Frequency || Maintain MRG* || Clarify the sampling requirements || Category III - Category IV 
 Reporting production related data || Maintain MRG * || Add production data requirements || Category III 
 Simplified Procedures and Requirements || Maintain MRG || Further simplification* || Categories II and I 
 Application of the Improvement Principle || Maintain MRG || Enhance improvement principle * || Category II 
 Information Technology || No action taken || IT/data exchange for ETS MRV * || Categories II and I 
* Preferred
options
3.         ACCREDITATION AND
VERIFICATION REGULATION
3.1.      General policy objectives
The specific objectives for verification
and accreditation were as well previously identified in the impact assessment
accompanying the proposal for Directive 2009/29/EC. These are: establishing a
consistent and comparable level of verification and accreditation; harmonising
internal market for verification and accreditation services; improving
cost-effectiveness.
The MRG lays down the basic approach for
verification activities in line with the criteria for verification defined in
Annex V of the EU ETS Directive. Based on the steps outlined in Annex V,
combined with relevant auditing experience in other domains, especially in
financial auditing, the European cooperation for Accreditation (EA) has
developed detailed guidance on the assessment and accreditation of verifiers
and verification bodies for EU ETS (EA document EA 6/03). In 2007 this guidance
was formally recognised in the new MRG and now forms the basis for EU ETS
verification and accreditation in most MS. 
3.2.      Policy options
3.2.1.   Accreditation and
certification of Verifiers
Article 15 of Directive 2009/29/EC gives a
clear indication with respect to accreditation of verifiers "the
Commission shall adopt a regulation for […] the accreditation and supervision
of verifiers."
Option 1:         Confirmation of verifiers is limited solely to Accreditation Bodies.
Option 1 is the option explicitly mentioned in Article 15 of Directive
2009/29/EC. Option 1 is fully in line with the original requirements set-up by
the IA of Directive 2009/29. 
Option 2:         Confirmation
of verifiers is extended also to national certification bodies to accommodate
the historic arrangements affecting a small number of Member States. This
option complies fully with Article 15 of Directive 2009/29/EC and with Article
5.2 of Council Regulation 765/2008/EC, the framework legislation related to
accreditation. This will improve the system opening up to certification of
verifiers, as natural persons, a parallel and equivalent approach to
accreditation.  Option 2 is
retained.
3.2.2.   Mutual
Recognition of Verifiers
Option 1:         Mutual
recognition of verifiers is not linked to accreditation. This option is not
taking into account the requirements set-up by the Directive 2009/29/EC:
"The Commission […] shall specify conditions […] for mutual recognition
Option 2:         Mutual
recognition of verifiers is taking place if they are accredited by
Accreditation Bodies or certified by national authorities who have been subject
to successful peer evaluation. According to the Council
Regulation, 2008/765/EC verifiers who have been accredited by a successfully
peer reviewed Accreditation Body must be mutually accepted across all Member
States. The Accreditation Bodies develops feedback loops on performance of
verifiers. This option will facilitate free movement of verifiers of comparable
level of quality. In contrast to Option 1, this option will promote overall
harmonisation with respect to the quality of verifiers and the verifications
carried out. 
Option 2 is fully in line with the original
requirements set-up by the IA of Directive 2009/29. Option 2 is retained.
3.2.3.   Peer Evaluation of
Accreditation Bodies
The Council
Regulation 2008/765 (AR) requires all national Accreditation Bodies to subject
themselves to peer evaluation as organised by the body recognized under Article
14 of the Regulation. The body which is currently recognised is the EA.[6]

Option 1: The Peer Evaluation exercise of Accreditation Bodies is an
exclusive matter of the EA. The EA is by default running peer evaluation
exercises among its members on a regular basis. Leaving it to its routine
exercise could risk not taking into account relevant input from Competent
Authorities on specific requirements related to the EU ETS. 
Option 2: Specific requirements under the EU ETS should be developed within
the Peer Evaluation exercise of Accreditation Bodies. This option will allow the EA to implement more appropriate peer evaluation criteria in accordance
with EU ETS requirements Option 2 is fully in line with
the original requirements set-up by the IA of Directive 2009/29. Option 2 is
retained.
3.2.4.   On-going Supervision of
Verifiers and Corrective Measures
Option 1: Competent
Authorities should be entitled to evaluate the quality of audits and to make
further investigation if underperforming verifiers are detected. This option
could result in overlapping responsibilities between the different institutions
involved. This will affect the overall efficiency of the system.
Option 2:
Supervision of verifiers is limited to Accreditation Bodies. The standard ISO 17011, which requires Accreditation Bodies to carry out
surveillance, leaves room for interpretation on the frequency of surveillance
and how surveillance is carried out. The lack of input from CAs could result in
failure to secure useful additional insight from them and insufficient quality
of verification. This option will not address
sufficiently the effectiveness of the M&R Regulation due to the fact that
Accreditation Bodies are not completely aware about the EU ETS.
Option 3:
With respect to supervision of verifiers, an effective system for exchange of
views between the Accreditation Bodies and the Competent Authorities should be
established. Therefore, the A&V Regulation will set requirements for
information exchange between CAs and Accreditation Bodies. This option will improve
communication on transparency and status of accreditation of verifiers, setting
clear requirements for all Member States. It will also maximise useful exchange
of information between Accreditation Bodies and CAs in a cost efficient manner
and without duplication of roles. Option 3 is fully in line with the original
requirements set-up by the IA of Directive 2009/29. Option 3 is retained.
3.2.5.   Risk Analysis
Option 1:         Maintain
the generic requirements stated in the MRG Section 10.4.2 (b). ("No policy
change") An effective risk analysis exercise is important for the overall
planning of the verification exercise. A risk analysis process that does not
properly take into account strategic analysis and the risk assessment of the
operator could result in either a flawed verification opinion or an incomplete
verification exercise requiring need to repeat part of the process and
additional costs for the operator.
Option 2:         Develop
more specific requirements related to the strategic analysis, and to the risk
assessment of the operator including recommendations for improvement. This
option will set clarified requirements for both the verifier's Strategic Analysis
and Risk Analysis in line with EA 6/03. It will describe and how the Strategic Analysis
and Risk Analysis relate and feed into the subsequently required verification
activities (controls and data testing). This option is already used by a
majority of Member States with an acceptable level of impact. Option 2 is fully
in line with the original requirements set-up by the IA of Directive 2009/29. Option
2 is retained.
3.2.6.   Simplified Procedures and
Requirements
Option 1:
Member States may allow verifiers to use simplified verification plans and
procedures for operators and aircraft operators if certain conditions to be confirmed
(by the Commission) are met. This option will offer considerable scope for reduction
of verification costs. It provides possibility for allowing greater waive of
site visits under certain conditions for small and simple installations (still based
on risk analysis). Option 1 is fully in line with the original requirements
set-up by the IA of Directive 2009/29. 
Option 2:
Simplified verification is not allowed. This option will continue to impose
significant and disproportionate costs on small emitters, resulting in a
considerable low efficiency of the system and no real added-value. Option 1
is retained.
3.2.7.   Single
Verifier Issue and Independent Technical Review
Option 1: Single
verifiers (as physical person) are allowed to perform verification and no
Independent Technical Review is required. This option will result in lowering
considerably the effectiveness of the verification exercise.
Option 2: Single
verifiers (as legal person or natural person) are allowed to perform
verification and an Independent Technical Review is required. Regulation 765/2008 covers the accreditation of conformity assessment
bodies. Conformity assessment body means a body that performs conformity
assessment activities including calibration, testing, certification and
inspection.[7] This seems to imply that persons performing conformity assessment
activities are not allowed under the new accreditation framework. However, if
single verifier were to organize themselves as a body by becoming a legal
entity, common understanding could lead to the interpretation that a conformity
assessment body under the accreditation regulation may also be an individual.
Section 3.3.3 of ISO 14065 even explicitly mentions that a verification body can
be a person. 
Option 2 is fully in line with the original
requirements set-up by the IA of Directive 2009/29. Option 2 is retained.
3.2.8.   Content of the Verification
Report
Option 1:         Maintain
the generic requirements stated in the MRG Section 10.4.2 (e). ("No policy
change"). This option results in lack of consistencies and non
transparencies with respect to the verification exercise. This will have an
impact on the effectiveness and efficiency of the system as well as on the
mutual recognition of accredited verifiers
Option 2:         Develop
a more detailed list of requirements related to the content of the Verification
Report. A set of common requirements is developed in the A&V Regulation. 
The main elements and additional
information will be related to site visits, verification team, technical
reviewer, confirmation of principles, list of fuels and recommendations for
improvement. The impact will be a consistent content of report. In the
beginning, it is likely to result in a slight increase in verification costs,
but these will be balanced by greater transparency of the verification
exercise. There will also allow more insight at CA level on verification
quality.
Option 2 is fully in line with the original
requirements set-up by the IA of Directive 2009/29. Option 2 is retained.
3.3.      Assessment of cumulative
impacts of preferred options
Consistent and comparable level of
verification and accreditation: The A&V Regulation
will provide a much higher level of certainty regarding the uniformity of
implementation at Member State level. A common approach to verification will
enhance transparency, clarify requirements and should improve the consistency
with which verification is performed across the EU. This in turn will improve
the environmental integrity of the System and trust in the verification process
itself. 
Harmonised internal market for
verification and accreditation services: The
A&V Regulation will impose direct requirements on relevant individuals (verifiers,
verification bodies, Accreditation Bodies, Competent Authorities, etc) without
being interpreted at least 27 times and applied differently in at least 27
national legislations. 
More consistent accreditation will reduce Member
States concerns that verifiers in some Member States do not meet the same
standards as those accredited by their own accreditation body. This will in
turn free up the market and allow for verifiers to operator throughout the EU
(subject to language requirements). 
Improving cost-effectiveness: The development of one set of EU wide rules on verification and
accreditation will have significant cost savings for Member States after an
initial period of adjustment. Cost savings for Competent Authorities may come
from the regulation applying directly to the verifier and other parties named.
There would be no need to amend national legislation if the regulation is
amended since it applies directly. There would also be no delays in achieving
improved harmonisation of requirements since they would apply immediately.
With respect to the 8 A&V topics below
5 categories have been developed in relation to perceived effects on necessary
man-power and financial cost resources. The categories were validated through
selected interviews with representatives from Competent Authorities, Verifiers
and ETS Compliance Forum Secretariat.
I.       Significant reduction in costs and
necessary resources.
II.      Some reduction in costs and necessary
resources
III.     No expected change in costs and
necessary resources
IV.    Some increase in costs and necessary
resources
V.      Significant increase in costs and
necessary resources
Due to the new approach related to
accreditation and verification a “real baseline” cannot be mentioned in most of
the options of the following table.
Overview table
 Policy options || Option 1 || Option 2 || Costs/savings 
 Accreditation and certification of verifiers || Confirmation limited to Accreditation Bodies || Extended also to national certification bodies* || Category IV 
 Mutual recognition of verifiers || Mutual recognition not linked to accreditation || Mutual recognition linked to accreditation * || Category II 
 Peer evaluation of AB || Peer evaluation only by EA || Specific criteria for ETS * || Category III 
 Supervision of verifiers || CAs only responsible || Effective exchange of information * || Category II – Category I 
 Risk analysis || Maintain MRG || Develop specific requirements * || Category I 
 Simplified Procedures and Requirements || Simplified verification is allowed * || Simplified verification is not allowed || Categories II and I 
 Single verifier and independent review || Single verifiers (as physical person) no review || Single verifiers (as legal person ) and review * || Category II and I 
 Content verification report || Maintain MRG || More specific requirements * || Categories III and II 
* Preferred
options
4.         CONCLUSION 
1.                      
All the proposed measures are in line with the
requirements set out in the Directive 2009/29 and foreseen in its Impact
Assessment, as well as in the Council Regulation 2008/765 on accreditation and
related Impact Assessment. Those pieces of legislation predefine the objectives
to be met in the proposed two regulations under scrutiny.
2.                      
All the retained options, strictly linked to the
M&R and A&V elements of the EU ETS, are tailored to the capacity of the
installations concerned including specific provisions for small emitters, in
order to maintain a proper cost-efficiency.
3.                      
The need to enhance transparency, comparability,
coherence and continuity, deriving from requirements as set at international
level, as well as to introducing an element of simplification and greater
user-friendliness of the legal texts has strongly guided the choice of options.
4.                      
As such costs are very difficult to identify
separately from the completion of the activity itself. Moreover frequency,
which is a variable allowing flexibility, is itself predetermined by the
calendar of reporting under the EU ETS. It is mostly to be underlined that the
present regulations aim at improving the system without unduly extending the
obligations for reporting, keeping them, thus, within a pre-established
acceptable framework.
[1]               COM/2008/16 of 23.01.2008 , Commission Staff Working
Document accompanying document to the proposal for a Directive of the European
Parliament and of the Council amending Directive 2003/87/EC so as to improve
and extend the EU greenhouse gas emission allowance trading system, pp. 62-3,
leading to Directive 2009/29/EC.
[2]               COM/2008/16 of 23.01.2008 , p. 71
[3]               SEC(2007) 174
[4]               The
tier system provides a set of building blocks to determine the appropriate
monitoring methodology for each installation. The tier system defines a
hierarchy of different ambition levels for activity data, emission factors and
oxidation or conversion factors. These levels are the so-called “tiers”. The
higher the number of the tier chosen, the higher the level of accuracy / the
more site-specific the monitoring system becomes.
[5]               2011/278/EU: Commission Decision
of 27 April 2011 determining transitional Union-wide rules for harmonised
free allocation of emission allowances pursuant to Article 10a of Directive
2003/87/EC of the European Parliament and of the Council
[6]               Article 10
(1) Proposed accreditation regulation.
[7]               Article 2 (16) AR