Timely and accurate data on greenhouse gas (GHG) emissions is vital for knowing whether the EU and its Member States are on track to meet their emission targets and for developing robust new policies to address the climate challenge. The European Commission today proposed legislation to significantly enhance the monitoring and reporting of GHG emissions, in particular to meet new requirements arising from the package of EU climate and energy laws for the period 2013-2020.
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1. Why is the Monitoring Mechanism Decision (Decision 280/2004/EC) being revised?
This new Regulation is the instrument which provides the legal basis to implement revised domestic commitments set out in the 2009 climate and energy package, as well as to ensure timely and accurate monitoring of the progress in implementation of these commitments.
The opportunity has also been taken to propose improvements in the legislation in the light of experience gained in implementing the Monitoring Mechanism Decision including its implementing provisions (Decision 2005/166) as well as in response to the international negotiations and various United Nations Framework Convention on Climate Change (UNFCCC) requirements.
In general, the EU’s current and future mitigation actions will be facilitated through the enhanced monitoring and reporting system being put in place.
2. What are the main objectives of the new Regulation?
The overall objectives of the new Regulation are:
to assist the Union and its Member States to meet their mitigation commitments and to implement the climate and energy package;
to improve the timeliness, transparency, accuracy, completeness, comparability and comprehensiveness of the data reported by the Union and its Member States;
to ensure that the Union and its Member States comply with international monitoring and reporting obligations and commitments, including the reporting on financial and technical support provided to developing countries;
to facilitate the development of new Union climate change mitigation and adaptation instruments;
to provide a legal basis for the implementation of future reporting requirements and guidelines pursuant to Union legislation or international agreements and decisions.
3. Who and what does this new Regulation concern?
This Regulation covers reporting from the EU and its Member States required under the UNFCCC and the Kyoto Protocol.
It covers emissions of six greenhouse gases from all sectors (energy, industrial processes, land use, land use change and forestry (LULUCF), waste, agriculture, etc). It is based on methodologies established under the Intergovernmental Panel on Climate Change (IPCC) and existing aggregated statistical data at the national level.
The reporting under the new Regulation differs from reporting under the EU Emissions Trading System (EU ETS) Directive which covers reporting from companies to Member State authorities and is based on data collected by industry.
4. How does the Monitoring Mechanism Regulation relate to the ongoing international negotiations under the UNFCCC?
Enhanced reporting is essential for the recognition of the Union’s and the Member States’ efforts in fulfilling their commitments on the provision of financial, technological and capacity-building support to developing country Parties as agreed at the 2009 and 2010 UNFCCC conferences. In this context the particularity of the EU reporting system must also be taken into consideration which necessitates ensuring quality reporting at both the EU and the Member State level, and consistency of reporting between the EU and the Member States.
5. What are the new reporting requirements contained in the Monitoring Mechanism Regulation?
The new Regulation:
implements the monitoring and reporting requirements of the Effort Sharing Decision and the revised EU ETS Directive through:
establishing a review and compliance cycle under the Effort Sharing Decision;
incorporating the reporting requirements for the use of revenues from auctioning carbon allowances, as stipulated in the revised ETS Directive;
enhances the current monitoring and reporting framework so as to meet the needs of future EU and international legislation through establishing a basis for monitoring and reporting emissions from maritime transport, non-CO2 climate impacts from aviation, LULUCF, and adaptation;
enhances EU and Member State reporting on financial and technology support provided to developing countries, thereby ensuring adherence to international commitments under the UNFCCC;
enhances consistency of reporting under this Decision with reporting under other EU legal instruments that address air pollutants;
enhances reporting of actual emissions, projections, policies and measures taking into account lessons learned from past implementation.
6. How does the new Regulation deal with the auctioning revenues generated from the Emission Trading System?
The new regulation provides the basis for the reporting of auctioning revenues from the EU ETS in line with the provisions of the climate and energy package. It ensures transparency and monitors the fulfilment of the commitment to use at least half of the annual auctioning revenues – amounting to at least 11 billion – for measures to fight climate change in the EU and third countries. This reporting does not impose additional obligations or costs on companies, as it is directed to treasuries/finance ministries.
7. How does the new Regulation deal with reporting on financial and technical support provided to developing countries?
At the 2009 UNFCCC Conference in Copenhagen, the Union and the Member States committed to providing significant fast-start and long-term climate financing and technological support to developing countries. At the 2010 Conference in Cancun, parties agreed (paragraph 40 of Decision 1/CP.16) that each developed country shall enhance reporting on the provision of financial, technological and capacity-building support to developing country Parties.
The new Regulation secures the transparency and comprehensiveness of reporting on the type and amount of financial and technology support provided to developing countries at both the EU and Member State level as per the commitment made under the UNFCCC. The new Regulation sets out necessary requirements to increase to the extent possible the comparability and consistency of reporting in these areas through the establishment of common rules, methods and formats. This enables the clear identification of gaps and subsequent improvements. On the basis of this systematic, common approach to reporting on support, the EU will be able to demonstrate unequivocal compliance with its obligations under the UNFCCC.
8. How does this Regulation contribute to the 20% European emission reduction objective by 2020?
The climate and energy package called for “faster, efficient, transparent and cost-effective monitoring, reporting and verification of greenhouse gas emissions”. It also identified areas where action at the EU level would be necessary but where there is currently inadequate or insufficiently accurate data collected at EU and Member State level.
This new Regulation contributes to the 20% emission reduction objective by making the annual review process of reported information faster and more efficient, and by enabling the annual determination of compliance by the Member States with their targets.
The new Regulation also requires specific reporting on policies and measures implemented by the Member States in the non-ETS sectors thereby promoting wider mitigation action at the national level which should help Member States attain their individual targets, and the EU as a whole its 20% commitment.
The Europe 2020 strategy, the new integrated economic policy strategy for growth and jobs, includes the European and national emissions limitation targets as headline targets. The new Regulation allows for the monitoring of progress towards these targets.
Finally, the new Regulation sets the basis for reporting emissions from maritime transport and the non-CO2 impacts from aviation hence paving the way for the implementation of effective measures in these sectors.
9. What are the impacts related to the implementation of this new Regulation?
As the reporting requirements of the new Regulation are set at the national level based on IPCC methodologies and existing statistical data, the main impacts will be on the national public authorities which are responsible for gathering and analyzing the relevant data and producing the reports required.
The revision will not necessitate additional data collection from SMEs or industry, as there are no direct or indirect reporting requirements imposed on SMEs or industry, and the proposed changes will not have any impact on the administrative burden of ETS installation operators or any other industrial players. The reporting requirements as regards financial and technology support and adaptation apply to national authority level reporting, and do not impose any obligations on companies.
The new Regulation will ensure the availability of better and more comprehensive information on climate change-related issues, facilitate the public’s access to available information, and generally promote the long-term goal of raising awareness on climate change issues.
10. What are the next steps?
The proposal for a Regulation will be submitted to the European Parliament and to the Council for adoption under the ordinary legislative procedure. Upon its adoption by the Parliament and the Council, the Regulation will be published in the Official Journal of the European Union and 20 days later it will enter into force. The Regulation will fully substitute the current Monitoring Mechanism Decision, will be binding and will be directly applicable in all Member States.
EU ETS: Commission proposes two draft regulations on monitoring, reporting and verification
Source: European Commission
