CIF - MRVA — Ensuring Compliance

Tomasz Karpiński - Energy Community Secretariat MRVA –Ensuring Compliance

UNITING

EUROPE'S ENERGY,

TODAY July 2025MRVA in the European Union: Uniting Europe's Energy, Today 1 • Monitoring, Reporting, Verification and Accreditation of Verifiers is a mandatory Greenhouse gases reporting system on the company level. • Backbone of the emissions trading mechanism (EU ETS). Key tool for reducing greenhouse gas emissions in a cost-effectively manner. • The main objective is to ensure that the data obtained from the system is robust and accurate. • Launched in 2005, but undergone many revisions. • Implementation of polluter pays principle.

EU ETS Directive: • Crucial definitions • Scope and activity thresholds • Permit concept

• Competent Authority • Compliance Cycle timeframes • Fines • MRVA principles Accreditation and

Verification Regulation (AVR): • Requirements for verifiers • Detailed description of verification processes • Requirements for National Accreditation Bodies • Rules for accreditation processes. Monitoring and Reporting Regulation (MRR): • Detailed definitions • Monitoring plan concept • General monitoring methodology requirements • Specific requirements for each activity • Calculation rules • Content of monitoring plan • Rules and timeframes for reporting • Content of annual emission reportMRVA in the Energy Community: Uniting Europe's Energy, Today 2

Transposition deadline: 31 December 2023December 2022, Energy Community Ministerial Council adopted decision No. 2022/05.MC-Enc, which requires the transposition of the following EU legislation: EU ETS Directive (MRVA elements, scope of activities, list of GHGs), MRR Regulation, AVR Regulation Tentative period to fully implement, but not later then on 1 January 2026.

Competent Authority Installations National Accreditation BodyVerifiers Permit + Monitoring Plan Annual Emission Reports Accreditation Emissions DataTimelines alligned with:

Tentative period to fully implement, but not later then on 1 January 2026. Competent Authority Installations National Accreditation BodyVerifiers Permit + Monitoring Plan Annual Emission Reports Accreditation Emissions DataTimelines alligned with: • Reform Agendas for WB6Status of Transposition and Implemantation: Uniting Europe's Energy, Today 3 EnC Contracting Party

EU ETS

Directive Scope (Annex I) MRR AVR Competent Authority Identification of operators Permitting National Accreditation Body Albania         Bosnia and Herzegovina         Kosovo         Montenegro         North Macedonia         Serbia          not drafted  in drafting  parts adopted  adopted in past but needs alignment  adoptedInstallation boundaries: • All combustion units (boilers, burners, turbines, furnaces, flares, office building heating, emergency power generators etc) • regular operation • abnormal events (start-ups, shut-downs, emergency situations) • flue gas scrubbing (Desulphurisation, De-NOx) - Excluding fuels used for transportation purposes • Activity related process emissions: • decomposition of carbonates • non-carbonate carbon in raw materials • other chemical processes Total rated thermal input exceeding 20 MW, or specific production treshold.

• Excluding fuels used for transportation purposes • Activity related process emissions: • decomposition of carbonates • non-carbonate carbon in raw materials • other chemical processes Total rated thermal input exceeding 20 MW, or specific production treshold.

GHG: CO2, PFC, N2O

Who and What?: List of activities (28): • Combustion of fuels • Production of iron or steel • Production of primary and secondary aluminium • Production of cement clinker • Production of hydrogen • Chemical plants (nitric acid, ammonia, urea, fertilizers)Calculation Methodology Measurement – Based Methodology (CEMS) 𝐶𝑜𝑚𝑏𝑢𝑠𝑡𝑖𝑜𝑛𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = 𝐹𝑢𝑒𝑙 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦𝑥𝑁𝑒𝑡𝐶𝑎𝑙𝑜𝑟𝑖𝑐 𝑉𝑎𝑙𝑢𝑒𝑥𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝐹𝑎𝑐𝑡𝑜𝑟𝑥𝑂𝑥𝑖𝑑𝑎𝑡𝑖𝑜𝑛𝐹𝑎𝑐𝑡𝑜𝑟

𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = 𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦𝑥 𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝐹𝑎𝑐𝑡𝑜𝑟𝑥 𝐶𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛𝐹𝑎𝑐𝑡𝑜𝑟 𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = (𝐼𝑛𝑝𝑢𝑡𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠 −𝑂𝑢𝑡𝑝𝑢𝑡𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠)𝑥𝐶𝑎𝑟𝑏𝑜𝑛𝐶𝑜𝑛𝑡𝑒𝑛𝑡 Standard Mass Balance Activity Data Calculation

Factors Monitoring approaches: MRVA & CBAM: • Monitoring of direct emission (combustion + process) • Monitoring of heat flows: - inside installation -> Assignment of heat consumption to the relevant CBAM product - import of heat -> The producer is likely to be covered by MRVA obligations • Monitoring of emissions from energy production and consumption: - inside installation -> Assignment of energy consumption to the relevant CBAM product - from the grid -> The producer is likely to be covered by MRVA obligations • Monitoring of precursors (experience will be helpful) Introduction of ETS MRVA will speed up CBAM verification processes and will lower verification costs.

• inside installation -> Assignment of energy consumption to the relevant CBAM product - from the grid -> The producer is likely to be covered by MRVA obligations • Monitoring of precursors (experience will be helpful) Introduction of ETS MRVA will speed up CBAM verification processes and will lower verification costs.

Introduction of national carbon pricing mechanism will lead to lower CBAM certificate costs.8Uniting Europe's Energy, Today

THANK YOU!

Energy Community Secretariat Am Hof 4, Level 5, 1010 Vienna, Austria energy -community.org Tomasz Karpinski European Green Deal Expert on GHG Inventories and MRV tomasz.karpinski@energy-community.org