The monitoring plan, setting out detailed, complete and transparent documentation concerning the methodology of a specific installation or aircraft operator is a core element of the monitoring system established by EU ETS rules.
According to the Report of 23 November 2017 from the Commission to the European Parliament and to the Council, Report on the functioning of the European carbon market (COM(2017) 693 final) failure to hold a duly approved monitoring plan was among the most common offences within the EU ETS scheme reported for 2016 (5 cases).
Regular updates of the plan are also required, both to respond to the verifier’s findings and on the basis of the operator’s or aircraft operator’s own initiative.
The main responsibility for the implementation of the monitoring methodology remains with the operator or the aircraft operator.
Each operator or aircraft operator must monitor greenhouse gas emissions taking into account the nature and functioning of the installation or aviation activity to which it applies.
The monitoring plan must describe the instructions to the operator or aircraft operator in a logical and simple manner, avoiding duplication of effort and taking into account the existing systems in place at the installation or used by the operator or aircraft operator.
An operator or an aircraft operator must submit a monitoring plan to the competent authority for approval.
For new entrants to the Emissions Trading Scheme, the monitoring plan must be approved before the start of operations. For the start of the third trading phase the transition from MRG 2007 to the application of the M&R Regulation requires that the monitoring plans of all installations be revised and adapted to the new requirements.
The monitoring plan must consist of a detailed, complete and transparent documentation of the monitoring methodology of a specific installation or aircraft operator and must contain at least the elements laid down in Annex I (see attachment).
Together with the monitoring plan, the operator or aircraft operator must submit all of the following supporting documents:
(a) evidence for each source stream and emission source demonstrating compliance with the uncertainty thresholds for activity data and calculation factors, where applicable, for the applied tiers;
(b) the results of a risk assessment providing evidence that the proposed control activities and procedures for control activities are commensurate with the inherent risks and control risks identified.
The monitoring plan must be supplemented by written procedures which the operator or aircraft operator establishes, documents, implements and maintains for activities under the monitoring plan, as appropriate.
Where the reference is made to a procedure, an operator or an aircraft operator must establish, document, implement and maintain such a procedure separately from the monitoring plan.
The operator or the aircraft operator must summarise the procedures in the monitoring plan providing the following information:
(a) the title of the procedure;
(b) a traceable and verifiable reference for identification of the procedure;
(c) identification of the post or department responsible for implementing the procedure and for the data generated from or managed by the procedure;
(d) a brief description of the procedure allowing the operator or aircraft operator, the competent authority and the verifier to understand the essential parameters and operations performed;
(e) the location of relevant records and information;
(f) the name of the computerised system used, where applicable;
(g) a list of EN standards or other standards applied, where relevant.
The operator or aircraft operator must make any written documentation of the procedures available to the competent authority upon request. They must also make them available for the purposes of verification.
Elements for discretion of Member States
In addition to the elements referred to above, Member States may require further elements to be included in the monitoring plan of installations to meet the requirements of Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council, including a summary of a procedure ensuring the following:
(a) the operator regularly checks if information regarding any planned or effective changes to the capacity, activity level and operation of an installation is relevant under that Decision;
(b) the information referred to in point (a) is submitted by the operator to the competent authority by 31 December of each year.
Standardised and simplified monitoring plans
Member States may allow operators and aircraft operators to use standardised or simplified monitoring plans.
For that purpose, Member States may publish templates for those monitoring plans, including the description of data flow and control procedures, based on the templates and guidelines published by the Commission.
Before the approval of any simplified monitoring plan, the competent authority must carry out a simplified risk assessment as to whether the proposed control activities and procedures for control activities are commensurate with the inherent risks and control risks identified, and justify the use of such a simplified monitoring plan.
Member States may require the operator or aircraft operator to carry out the risk assessment itself, where appropriate.
Report of 23 November 2017 from the Commission to the European Parliament and to the Council on the functioning of the European carbon market (COM(2017) 693 final, p. 8) mentions that according to submissions in 2017, seven countries (BE, DK, FR, HR, HU, LI, LT) have taken advantage of the provision offered by Article 13 of M&R Regulation to allow use of simplified monitoring plans in low risk cases for stationary installations.
Only Denmark has joined since 2015.
In the case of aircraft operators with low emissions, four countries have reported use of this provision (BE, FI, IS and PL), with Belgium joining since 2015.
Modifications of the monitoring plan
Each operator or aircraft operator must regularly check if the monitoring plan reflects the nature and functioning of the installation or aviation activity in accordance with Directive 2003/87/EC, and whether the monitoring methodology can be improved.
The operator or aircraft operator must modify the monitoring plan in any of the following situations:
(a) new emissions occur due to new activities carried out or due to the use of new fuels or materials not yet contained in the monitoring plan;
(b) the change of availability of data, due to the use of new measuring instrument types, sampling methods or analysis methods, or for other reasons, leads to higher accuracy in the determination of emissions;
(c) data resulting from the previously applied monitoring methodology has been found incorrect;
(d) changing the monitoring plan improves the accuracy of the reported data, unless this is technically not feasible or incurs unreasonable costs;
(e) the monitoring plan is not in conformity with the requirements of this Regulation and the competent authority requests the operator or aircraft operator to modify it;
(f) it is necessary to respond to the suggestions for improvement of the monitoring plan contained in a verification report.
Approval of modifications of the monitoring plan
Since the monitoring plan is to be approved by the competent authority, it goes without saying that also changes thereof are only allowed (with the reservations indicated below) with the consent of the competent authority.
The operator or aircraft operator must notify any proposals for modification of the monitoring plan to the competent authority without undue delay.
However, the competent authority may allow the operator or aircraft operator to notify, by 31 December of the same year, modifications of the monitoring plan that are not significant.
The subject to approval by the competent authority must be any modification of the monitoring plan which is considered "significant" in the meaning of the M&R Regulation.
Where the competent authority considers a modification not significant, it must inform the operator or aircraft operator thereof without undue delay.
Significant modifications to the monitoring plan of an installation cover the following items:
(a) changes of the category of the installation;
(b) changes regarding whether the installation is considered an installation with low emissions;
(c) changes to emission sources;
(d) a change from calculation-based to measurement-based methodologies, or vice versa, used to determine emissions;
(e) a change in the tier level applied;
(f) the introduction of new source streams;
(g) a change in the categorisation of source streams — between major, minor or de-minimis source streams;
(h) a change of the default value for a calculation factor, where the value is to be laid down in the monitoring plan;
(i) the introduction of new procedures related to sampling, analysis or calibration, where the changes of those procedures have a direct impact on the accuracy of emissions data;
(j) the implementation or adaption of a quantification methodology for emissions from leakage at storage sites.
Significant changes to the monitoring plans of an aircraft operator must include:
(a) with regard to the emission monitoring plan:
(i) a change of tiers related to fuel consumption;
(ii) a change of emission factor values laid down in the monitoring plan;
(iii) a change between calculation methods as laid down in Annex III;
(iv) the introduction of new source streams;
(v) a change in the categorisation of source streams where a minor source stream changes to a major source stream;
(vi) changes in the status of the aircraft operator as a small emitter;
(b) with regard to the tonne-kilometre data monitoring plan:
(i) a change between a non-commercial and commercial status of the air transport service provided;
(ii) a change in the object of the air-transport service, the object being passengers, freight or mail.
It is noteworthy, and is also underlined in the regulatory guidance documents, that the M&R Regulation reduces the administrative effort by allowing two approaches which should already be taken into account when drafting monitoring plans:
- Only changes which are “significant” need the approval by the competent authority;
- Monitoring activities which are not crucial in every detail, and which by their nature tend to be frequently amended as found necessary, may be put into the procedures, which the monitoring plan mentiones and briefly describes, but the details of which are not considered part of the approved monitoring plan.
Implementation and recordkeeping of modifications
Prior to receiving the approval or information, the operator or aircraft operator may carry out monitoring and reporting using the modified monitoring plan where they can reasonably assume that the proposed modifications are not significant, or where monitoring in accordance with the original monitoring plan would lead to incomplete emission data.
In case of doubt, the operator or aircraft operator must carry out all monitoring and reporting, and in the interim documentation, in parallel, using both the modified and the original monitoring plan.
Upon the receipt of the approval or information, the operator or aircraft operator must only use the data relating to the modified monitoring plan and carry out all monitoring and reporting using only the modified monitoring plan.
The operator or aircraft operator must keep records of all modifications of the monitoring plan. In each record, the following must be specified:
(a) transparent description of the modification;
(b) a justification for the modification;
(c) the date of notification of the modification to the competent authority;
(d) the date of acknowledgement, by the competent authority, of the receipt of the notification, where available, and the date of the approval or information;
(e) the starting date of implementation of the modified monitoring.
Monitoring plan for aircraft operators
Report of 23 November 2017 from the Commission to the European Parliament and to the Council on the functioning of the European carbon market (COM(2017) 693 final refers to the following facts regarding the coverage of monitoring plans with respect to the aircraft operators (p. 9):
- 503 aircraft operators in 2016 were reported to have a monitoring plan (compared to 524 reported for 2015, and 611 for 2014),
- nearly 60% (300) of the reported operators were commercial while the other 40% (203) were non-commercial,
- a total of 249 (nearly 50%) qualified as small emitters (compared to 274 (52%) in 2015 and 329 (54%) in 2014).
Biomass monitoring issues
It is noteworthy that “The Guidance document No. 3 - Biomass issues 17/10/2012” indicates practical consequences of the new M&R Regulation which must be taken into account when setting up the monitoring plan in relation to bioliquids and biofuels. The said document indicates that the simplest way forward would be to establish a written procedure which requires the operator to attribute each batch of biomass used in the installation to either a (sustainable) “biomass” source stream or to a “fossil” source stream, depending on whether a proof is available for meeting the sustainability criteria or not. For further details on the issue see Sustainability criteria under the M&R Regulation as regards solid and gaseous biomass other than biogas for transport purposes – the ambiguities resolved by the clear-cut Guidance Document No. 3.
Because of the importance of the monitoring plan, the European Commission is providing certain templates. Some Member States might have provided customized templates based on the Commission’s templates, other Member States use a dedicated (usually web-based) electronic reporting system (that must also meet at least stated Commission requirements). Before developing a monitoring plan, operators are therefore advised to check their competent authority’s website or make direct contact with the competent authority for finding out the concrete requirements for submitting a monitoring plan. National legislation may also state specific requirements.