S.I. No. 437/2004 - European Communities (Greenhouse Gas Emissions Trading) Regulations 2004

1. Emissions from each activity listed in Schedule 1 shall be subject to verification.

2. The verification process shall include consideration of the report submitted pursuant to article 14(2) and of monitoring during the preceding year. It shall address the reliability, credibility and accuracy of monitoring systems and the reported data and information relating to emissions, in particular

(

a

) the reported activity data and related measurements and calculations;

(

b

) the choice and the employment of emission factors;

(

c

) the calculations leading to the determination of the overall emissions; and

(

d

) if measurement is used, the appropriateness of the choice and the employment of measuring methods.

3. Reported emissions may only be validated if reliable and credible data and information allow the emissions to be determined with a high degree of certainty. A high degree of certainty requires the operator to show that

(

a

) the reported data is free of inconsistencies;

(

b

) the collection of the data has been carried out in accordance with the applicable scientific standards; and

(

c

) the relevant records of the installation are complete and consistent.

4. The verifier shall be given access to all sites and information in relation to the subject of the verification.

5. The verifier shall take into account whether the installation is registered under the Community eco-management and audit scheme provided for in Regulation (EC) No. 761/2001 of the European Parliament and of the Council of 19th March 2001 allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS)

6

.

Methodology

Strategic analysis

6. The verification shall be based on a strategic analysis of all the activities carried out in the installation. This requires the verifier to have an overview of all the activities and their significance for emissions.

Process analysis

7. The verification of the information submitted shall, where appropriate, be carried out on the site of the installation. The verifier shall use spotchecks to determine the reliability of the reported data and information.

Risk analysis

8. The verifier shall submit all the sources of emissions in the installation to an evaluation with regard to the reliability of the data of each source contributing to the overall emissions of the installation.

9. On the basis of this analysis the verifier shall explicitly identify those sources with a high risk of error and other aspects of the monitoring and reporting procedure which are likely to contribute to errors in the determination of the overall emissions. This especially involves the choice of the emission factors and the calculations necessary to determine the level of the emissions from individual sources. Particular attention shall be given to those sources with a high risk of error and the above mentioned aspects of the monitoring procedure.

10. The verifier shall take into consideration any effective risk control methods applied by the operator with a view to minimising the degree of uncertainty.

Report

11. The verifier shall prepare a report on the validation process stating whether the report pursuant to article 14(2) is satisfactory. This report shall specify all issues relevant to the work carried out. A statement that the report pursuant to article 14(2) is satisfactory may be made if, in the opinion of the verifier, the total emissions are not materially misstated.

Minimum competency requirements for the verifier

12. The verifier shall be independent of the operator, carry out his activities in a sound and objective professional manner, and understand

(

a

) the provisions of this Directive, as well as relevant standards and guidance in the Commission's Monitoring and Reporting Guidelines;

(

b

) the legislative, regulatory, and administrative requirements relevant to the activities being verified; and

(

c

) the generation of all information related to each source of emissions in the installation, in particular, relating to the collection, measurement, calculation and reporting of data.

GIVEN under the Official Seal of the Minister for the Environment, Heritage and Local Government, this 14th day of July 2004.

MARTIN CULLEN,

Minister for the Environment,

Heritage and Local Government.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

These Regulations establish the procedures in Ireland for participation by specified installations in the European Community greenhouse gas emissions trading scheme, in accordance with the provisions of Directive 2003/87/EC of the European Parliament and of the Council of 13th October 2003, establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC concerning integrated pollution prevention and control. The procedures include

• designation of the EPA as the national competent authority;

• application for and issue of greenhouse gas emissions permits to operators of installations, the appropriate conditions to attach thereto, and circumstances for their amendment;

• a requirement for operators of installations to be in possession of a greenhouse gas emissions permit;

• a requirement for operators to surrender allowances, each equivalent to 1 tonne of CO

2

, within 4 months of each calendar year, equal to the verified quantity of emissions during that year, and their cancellation;

• the development of national allocation plans, in accordance with specified criteria, detailing the amount of allowances to issue to participating installations in each emissions trading period, the issue of these annually, and the amounts that are to be made available free of charge in the initial trading period and the 1st 5 year period thereafter;

• specified reporting, monitoring and verification obligations, to be complied with within 3 months of the end of each calendar year.

The Regulations provide for a bar on the transfer of allowances by installations that do not comply with the reporting and verification requirements, and the payment of penalties by operators who fail to surrender for cancellation allowances equal to emissions during the preceding year. The penalty payment is set at €40 per tonne of CO

2

during the initial trading period, rising to €100 for each period thereafter, with a continuing requirement to surrender allowances in the succeeding calendar year in respect of emissions for which penalty payments have been made.

The recognition of allowances issued by competent authorities in other Member States, for the transfer of allowances between persons within the European Community and for these to be held by any person is provided for. The accounting for the issue, holding, transfer and cancellation of allowances is to be through the establishment by the Agency of a registry for the purpose.

The Regulations specify that the initial national allocation plan shall be for 3 years from 1st January 2005, and thereafter for each 5-year period commencing on 1st January 2008.

Provision is made for public consultation during the preparation and finalisation of the national allocation plan, and for public access to the annual reports by operators on emissions. The public are also specified in the Regulations as having right of access to the information held in the registry.

The Regulations allow for the inclusion of additional activities and gases in the greenhouse gas emissions trading scheme from no earlier than 2008 and specify that this may only be done with the approval of the Minister and the European Commission. The Regulations amend the provisions in the

Environmental Protection Agency Act 1992

(as amended) for integrated pollution prevention and control licensing, and for obligatory and optional provisions for the Agency to coordinate that code with the procedures for emissions trading.

The Regulations provide that unused allowances are to be cancelled within four months of the end of each trading period, that no allowances are to be issued by the Agency in respect of unused allowances issued in respect of the 1st three-year trading period during the next period, and that the Agency must issue replacement allowances after the end of each succeeding trading period to operators in respect of unused allowances during the 2nd and subsequent trading period.

Provision is made for the issue of additional and non-transferable allowances in the event of

force majeure

, with the approval of the European Commission.

The Agency is required by the Regulations to make annual reports to the European Commission on the operation of the greenhouse gas emissions trading.

1

OJ L 275/32 of 25.10.2003.

2

OJ L 257/26 of 10.10.1996.

3

OJ L 59/1 of 26.2.2004.

4

OJ L 130/1 of 15.5.2002.

5

OJ L 167/31 of 9.7.1993, as amended by Decision 1999/296/EC (O) L 117/35 of 5.5.1999.

6

OJ L 114/1 of 24.4.2001.

13. (1) Allowances shall only be valid for emissions during the periods referred to in Article 9(2) for which they are issued.

(2) (

a

) Four months after the end of the pilot period, allowances which are no longer valid and have not been surrendered and cancelled in accordance with articles 12(3) and 12(4), or cancelled in accordance with article 12(5), shall be cancelled or be caused to be cancelled by the Agency; and

(

b

) the Agency shall not issue allowances to persons for the current period to replace any allowances held by them which are cancelled or caused to be cancelled in accordance with the preceding paragraph of this sub-article.

(3) (

a

) Four months after the beginning of each five year period subsequent to the Kyoto period, allowances which are no longer valid and have not been surrendered and cancelled in accordance with articles 12(3) and 12(4), or cancelled in accordance with article 12(5), shall be cancelled or be caused to be cancelled by the Agency; and

(

b

) the Agency shall as soon as practicable issue allowances to persons for the current period to replace any allowances held by them which are cancelled or caused to be cancelled in accordance with the preceding paragraph of this sub-article.

Monitoring, Reporting and Verification of Emissions

14. (1) The operator of an installation shall monitor emissions from that installation in accordance with the principles set out at Schedule 4 and the requirements of the Commission's Monitoring and Reporting Guidelines.

(2) The operator shall report the emissions as specified in the greenhouse gas emissions permit from each installation during each calendar year commencing on 1st January 2005, to the Agency, not later than 31st March of the following year in accordance with

(

a

) the conditions specified in the greenhouse gas emissions permit;

(

b

) the principles set out in Schedule 4; and

(

c

) the detailed requirements of the Commission's Monitoring and Reporting Guidelines.

(3) The operator shall ensure that the report referred to in sub-article 2 is verified in accordance with the criteria set out in Schedule 5, to the satisfaction of the Agency, and shall provide a copy of the said verification report to the Agency when submitting the report specified in sub-article 2.

Reports of Emissions that have not been Verified

15. An operator whose report has not been verified or has not submitted a verification report to the satisfaction of the Agency by 31st March each year, for emissions during the proceeding year, cannot make further transfers of allowances until a report from that operator has been verified as satisfactory.

Penalties

16. (1) An operator who fails to comply with his obligations under these Regulations shall be guilty of an offence within the meaning of section 8 of the 1992 Act and shall be liable to the penalties laid down in section 9 of the said Act.

(2) The Agency shall publish the names of operators who are in breach of the requirements to surrender allowances as required by article 12(3), and the details of such breach.

(3) An operator who fails to surrender allowances as required by article 12(3) by 30th April of each year to cover its emissions during the preceding year shall be liable for payment to the Agency of an excess emissions penalty in the amount of

(

a

) €40 for each tonne of carbon dioxide equivalent emitted by that installation during the pilot period for which the operator has not surrendered allowances; and

(

b

) €100 for each tonne of carbon dioxide equivalent emitted by that installation during the Kyoto period and each subsequent five year period for which the operator has not surrendered allowances.

(4) Payment of the excess emissions penalty specified in this article shall not release the operator from the obligation to surrender an amount of allowances equal to those excess emissions in the following calendar year.

(5) This article shall in all respects be enforced in accordance with the provisions of the 1992 Act.

Access to information

17. The Agency shall make available to the public decisions on the allocation of allowances and the reports of emissions submitted to it by operators in accordance with the provisions of the

European Communities Act 1972

(Access to Information on the Environment) Regulations 1998 (

S.I. No. 125 of 1998

).

Competent Authority

18. The Environmental Protection Agency is the designated competent authority for the purposes of the Directive.

Registry

19. (1) The Agency shall establish and maintain, or cause to be established and maintained, a registry in order to ensure the accurate accounting of the issue, holding, transfer and cancellation of allowances, and may do so in a consolidated manner with the registry of one or more Member States of the European Communities.

(2) Any person may hold allowances.

(3) The Registry shall be accessible to the public and shall contain separate accounts to record the allowances held by each person to whom and from whom allowances are issued or transferred.

Irregularities

20. Where irregularities are identified by or to the Agency, it shall not register, or allow to be registered as appropriate, the transactions in question or any further transactions relating to the allowances concerned until the irregularities have been resolved.

Reporting to the Commission

21. (1) The Agency shall submit to the Commission an annual report on the application of these Regulations, providing information on the allocation of allowances, the operation of the registry, the application of the Commission's Monitoring and Reporting Guidelines, the verification of reports on emissions, compliance with these Regulations, and the fiscal treatment of allowances, if any.

(2) The first report shall be sent to the Commission by 30th June 2005, and shall be drawn up on the basis of a questionnaire or outline drafted by the Commission.

Procedures for inclusion of additional activities and gases

22. (1) From 2008, the Agency may, with the approval of the Minister, apply emissions allowance trading in accordance with these Regulations to activities, installations and greenhouse gases which are not listed in Schedule 1, provided that inclusion of such activities, installations and greenhouse gases is approved by the Commission.

(2) Allocations to installations carrying out activities referred to in sub-article 1 shall be specified in national allocation plans referred to in article 9.

Amendment of Procedures for Integrated Pollution Prevention and Control Licensing

23. The 1992 Act shall apply to installations under these Regulations with the following modifications and with any other necessary modifications to that Act arising from the implementation of these Regulations, and references in that Act or to the provisions of that Act shall, unless the context otherwise requires, be construed as including references to these Regulations or the provisioins of these Regulations

(1) the Agency in issuing a licence pursuant to Part IV of the 1992 Act

(

a

) shall not have regard to Sections 83(4)(

a

), 83(5)(

a

)(vi), 86(1)(

a

)(i), 86(1)(

b

))(i) and 90(4)(

a

)(i) in respect of greenhouse gas emissions, unless it is necessary to ensure that no significant local pollution is caused; and

(

b

) may choose not to impose the requirements of Sections 83(5)(

a

)(viii), 86(1)(

b

)(vii) and 86(1)(

b

)(ix) in respect of greenhouse gas emissions;

and shall amend any licence issued as appropriate.

Force Majeure

24. The Agency may, following consultation with the Minister, apply to the Commission for certain installations to be issued with additional allowances in respect of the pilot period in cases of

force majeure

, and where approved by the Commission, shall issue additional and non-transferable allowances to the operators of those installations.

SCHEDULE 1

CATEGORIES OF ACTIVITIES REFERRED TO IN ARTICLES 2(1), 3, 4 AND 14(1)

The threshold values given in this Schedule generally refer to production capacities or outputs. Where one operator carries out several activities falling under the same subheading in the same installation or on the same site, the capacities of such activities are added together.

Activities

Greenhouse gases

Energy activities

E1.1

Combustion installations with a rated thermal input exceeding 20 MW (except hazardous or municipal waste installations)

Carbon dioxide

E1.2

Mineral oil refineries

Carbon dioxide

E1.3

Coke ovens

Carbon dioxide

Production and processing of ferrous metals

E2.1

Metal ore (including sulphide ore) roasting or sintering installations

Carbon dioxide

E2.2

Installations for the production of pig iron or steel (primary or secondary fusion) including continuous casting, with a capacity exceeding 2.5 tonnes per hour

Carbon dioxide

Mineral industry

E3.1

Installations for the production of cement clinker in rotary kilns with a production capacity exceeding 500 tonnes per day or lime in rotary kilns with a production capacity exceeding 50 tonnes per day or in other furnaces with a production capacity exceeding 50 tonnes per day

Carbon dioxide

E3.2

Installations for the manufacture of glass including glass fibre with a melting capacity exceeding 20 tonnes per day

Carbon dioxide

E3.3

Installations for the manufacture of ceramic products by firing, in particular roofing tiles, bricks, refractory bricks, tiles, stoneware or porcelain, with a production capacity exceeding 75 tonnes per day, and/or with a kiln capacity exceeding 4 m

3

and with a setting density per kiln exceeding 300 kg/m

3

Carbon dioxide

Other activities

E4.1

Industrial plants for the production of

(

a

) pulp from timber or other fibrous materials

Carbon dioxide

(

b

) paper and board with a production capacity exceeding 20 tonnes per day

Carbon dioxide

SCHEDULE 2

GREENHOUSE GASES REFERRED TO IN ARTICLE 3

Carbon dioxide (CO

2

)

Methane (CH

4

)

Nitrous Oxide (N

2

O)

Hydrofluorocarbons (HFC

s

)

Perfluorocarbons (PFC

s

)

Sulphur Hexafluoride (SF

6

)

SCHEDULE 3

CRITERIA FOR NATIONAL ALLOCATION PLANS REFERRED TO IN ARTICLES 9 AND 22

The Minister for the Environment, Heritage and Local Government, in exercise of the powers conferred on him by

section 3

of the

European Communities Act 1972

(No. 27 of 1972) and for the purpose of giving effect to Directive 2003/87/EC

1

, of the European Parliament and of the Council of 13th October 2003, establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC

2

, hereby makes the following Regulations:—

Citation