1. Data Consistency: EU-ETS/UNFCCC Setting the scene - EU ETS Copenhagen – 9 February 2006 EU COM/EEA Workshop: Data Consistency National GHG Inventories & Reporting under the E U-ETS Jochen Harnisch, Ecofys J.Harnisch@ecofys.de

2. 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

3. 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

4. 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

5. 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

6. Quantitative: Continuous Emissions Monitoring Revised EU-MRG will contain an Annex on CEMS Can be used for CO 2 and non-CO 2 Not widely used for CO 2 and accompanied by calculation based on fuel use Candidates for 2008-2012: N 2 O from production of nitric acid and adipic acid Quantitative inconsistencies – but impact is likely to be limited

7. Conceptual: Transferred CO 2 ETS-Directive: Direct emissions from installations EU-MRG 2004 provide few constraints to deduction of CO 2 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 CO 2 Carbon Capture and Storage: Similar situation but potentially much larger volumes

8. 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

9. 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-CO 2 ghg abatement in opted-in sectors Main criterion today: Measure mirrored in national energy statistics

10. 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?

11. 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

12. Thank you for your attention! Contact: Jochen Harnisch Ecofys GmbH phone: +49 911 994358-12 e-mail: j.harnisch@ecofys.de