13th EU ETS Compliance Conference

The 13^th annual EU ETS Compliance Conference was organised as a hybrid event, attracting 260 registered participants. Participants from nearly all EU ETS implementing countries engaged in knowledge exchange and learning around the central theme From GHG ambition to realisation.

The conference started with a debriefing from COP27 that was concluded only the weekend before. The COP27 faced tough negotiations for keeping the 1.5-degree goal alive. An agreement was reached on establishing a Loss and damage Fund for vulnerable countries. The Fund has the potential to be developed in line with EU conditions such as being funded by developed and emerging countries. A transition committee will work on formulating recommendations on the funding arrangements. In the next years, discussion will continue on increased ambition.

The second presentation provided an overview on the design of and current discussions on the Carbon Border Adjustment Mechanism (CBAM). Discussions are in an advanced stage, with main remaining items to resolve such as the scope of included products, treatment of indirect emissions and the timing of the start of the CBAM. CBAM will further increase MRV requirements. During a transitional period, importers will use the customs declaration that will be due every quarter of a year. After the transitional phase (proposed until 2026), verified reports will be required. 

Further plenary presentations on Day 1 focused on ETS for buildings and road transport. DG CLIMA presented the proposed upstream system that regulates fuel supplier (not end consumers), also called ETS2. Plans are to start ETS2 in 2026, and monitoring and reporting of fuel quantities and related emissions in 2025. In the following presentations experts from three markets (California, Austria and Germany) explained design choices in their national markets, with a focus on MRV requirements in place. Main challenges include identifying the targeted entities and designing the MRV system. The experts recommended to keep the MRV system for new sectors (in an ETS2) as simple as possible and closely aligned with existing excise duty systems.

The keynote presentation on Day 2 addressed the revision of EU ETS with a focus on the outcome of the trilogue discussions held the day before. The discussions are making progress with the aim to reach political agreement before the end of 2022. While there are still significant discussions on the proposal for ETS2 and the related Social Climate Fund, the trilogue reached a provisional agreement on the inclusion of maritime emissions. The revision of implementing and delegated acts will most likely start in early 2023. Participants were requested to actively join in meetings of the Task Forces and the ad-hoc Technical Working Group on MRVA to support this process.

The following presentation addressed the ongoing Study on compliance and enforcement mechanisms (Art. 16 of the EU ETS Directive). Member States have specific procedures and systems in place, leading to significant differences in implementation of enforcement. However, also various commonalities have been identified in setting of penalties, in enforcement procedures, in preventive measures as well as in some types of infringements. The increased use of IT systems has positively influenced effectiveness of enforcement. The presentation continued with a selection of good practices and an overview of challenges identified. Needs for harmonisation and improvement were identified and some first recommendations shared. Member State experts will be invited to discuss specific recommendations to their national approach.

In a panel debate, the two representatives from a competent authority, one verifier and one representative from the European co-operation for Accreditation discussed the verifier capacity. Verification is key element of EU ETS compliance. Capacities are already challenged in some countries and sectors, yet new obligations under FAR and ALC regulation add complexity. With CBAM and ETS2 coming in place there will be a need for more verifiers. The panel discussed the various challenges such as the high risks for verifiers and the challenge to balance time needed for high quality verification and the costs.

As every year, the conference offered a prominent role to the Compliance Forum Task Forces. Three parallel sessions were held in the morning of Day 1 in which the Task Forces on Monitoring and Reporting, Accreditation and Verification, and on Aviation held a series of presentations on recent experiences in MRVA implementation, discussed lessons learned and identified ways forward and elements for further discussion. The Task Force on Carbon Captureand Storage was re-launched in the afternoon of Day 2. All four Task Forces summarised their achievements and presented their planned future activities on Day 2 of the conference.

A final set of plenary presentations informed participants on DG CLIMA’s MRVA support planned for 2023 and provided a demonstration of the ETS Reporting Tool. Participants were invited to join these activities in the coming years and submit their requests for development of the ETS Reporting Tool.

Proceedings

• Conference programme

Plenary presentations

• 1a COP27 outcome - DG CLIMA
• 1b CBAM
• 2a ETS2
• 2b Fuel Suppliers MRV
• 2c National ETS Austria
• 2d nEHS
• 3a ETS revision
• 3b Compliance
• 3c TF MR
• 3d TF AV
• 3e TF Aviation
• 3f TF CCS
• 3g Future support

Parallel session Track 1: Implementation of Monitoring and Reporting Regulation

• 1 GUTcert
• 2 ISCC
• 3 DEHSt

Parallel session Track 2: Implementation of Accreditation and Verification Regulation

• 1 IE Irelands experience ALC report assessment
• 2 DK ALC reporting experience
• 3 NO experiences from ALC reporting
• 4 RENAR experience on ALC

Parallel session Track 3: Aviation in the EU ETS

• 1 ICAO Assembly outcome
• 2 TAROG_WG
• 3 AESA_WG
• 4 Fir for 55 implementation issues

Day 2, afternoon: Re-start of the Task Force on Carbon Capture and Storage

• 1 Projects Netherlands