What is EU ETS?
The EU ETS involves the allocation and trading of greenhouse gas (GHG) emission allowances throughout the European Union with caps set by each member state. Allowances are then distributed to each installation covered by the scheme.
Introduced in 2013, EU ETS Phase 3 remains in effect until December 31, 2020 and includes harmonized allocation methodologies, additional GHG and emission sources. EU ETS Phase 3 relates to the Commission Regulation (EU) 601/2012 of June 21, 2012 on the Monitoring & Reporting of GHG emissions. EU ETS Phase 3 requires each eligible installation to produce an annual emissions report, which needs an independent verification report submitted to the relevant Regulator between February 28 and the end of March each year (deadline dependent on the Member State in which the installation operates). The report verifies emissions for the previous calendar year; with allowances equal to the verified emissions then surrendered.
EU ETS Phase 4 applies to 2021 to 2030 reporting years and relates to the Commission Implementing Regulation (EU) 2018/2066 of December 19, 2018 on the Monitoring & Reporting of GHG emissions. The principles of EU ETS Phase 3 remain the same for the fourth period.
EU ETS3 Annual Verification
Lloyd's Register’s (LR) independent EU ETS Annual Verification service establishes robust, reproducible mechanisms for quantifying, monitoring and reporting your annual GHG emissions.
LR supports all types of installation operators who need to meet the EU ETS Phase 3 regulation including those in the chemical, glass, metallurgy, paper and refinery industries; alongside those with fuel combustion of 20MW or greater.
Under EU ETS3, operators must submit an annual GHG emissions report, which an accredited body must verify by 31 March the following year. Once verified, operators surrender the equivalent number of allowances by 30 April of that year.
EU ETS3 Baseline Verification
LR’s EU ETS BDR Verification service helps organizations obtain free allocations of emission allowances and meet the European FAR regulation (Commission Delegated Regulation (EU) 2019/331 of December 19, 2018 on Free Allocation Rules) through robust, reproducible mechanisms that quantify, monitor and report activity data for each sub-installation.
Emission allowances for phase 4 were initially based upon baseline data (2014–2018) that required verification by an accredited verification body by May 2019. This data submission must be conducted every five years. Under this requirement, operators willing to obtain free allocations must have their free allocation of emission allowances verified by an accredited body at the same periodicity.
EU ETS New Entrant Report Verification
New entrants are operators who obtained a GHG permit for the first time. For those operators willing to claim for the free allocation of emission allowances, they can opt for a data submission related to the first full calendar year of operation. Operators who apply under this requirement must have their free allocation of emission allowances verified by an accredited body.
EU ETS Allocation Level Report Verification
LR’s EU ETS ALR Verification service helps incumbent organisations adjusting their free allocations of emission allowances where their activity levels of sub-installations change by + or – 15% compared to the baseline activity level. This ALR submission is to be done once a year, by 31/03 (or earlier depending on each Member State national legislation) and must be verified by an accredited Verification Body at the same periodicity. Usually, the EU ETS ALR verification is conducted together with the EU ETS Annual Emissions Report verification as both activities are annual obligations.
Benefits of EU ETS
Verification to EU ETS demonstrates that your organization meets GHG emissions targets.
You can benefit from selling any surplus credits your organization no longer needs.
By identifying deficiencies against EU ETS requirements with a phased verification, you can minimise the risk of non-compliance.
Need help with EU ETS?
Whether your organization is new to the EU ETS or has moved from Phase 3, LR’s independent third-party verification can help you meet your mandatory reporting requirements. LR provides annual verification, BDR verification, NER verification, ALR verification, as well as gap analysis.
We were one of the first verification bodies to gain accreditation for EU ETS, and our two-stage verification enables us to minimize your risk of non-compliance while reducing disruption to your operations.
Why work with us?
LR verifiers are management systems experts, qualified in all aspects of emissions verification guaranteeing a comprehensive audit of your operations.
We assess and verify high-profile clients across the waste management, utilities, metallurgy, oil & gas, nuclear and government sectors with our depth of knowledge being a direct benefit to your organization.
Your business helps LR to help others
The profits we generate fund the Lloyd’s Register Foundation, a charity which supports science and engineering-related research, education and public engagement around everything we do. All of this helps us stand by the purpose that drives us every single day: Working together for a safer world.
We maintain our impartiality by proactively managing conflicts of interest across all LR businesses including those which may exist between consultancy and third-party certification services. Click here to learn more.
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