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PAVING THE ROAD FOR THE IMPLEMENTATION OF A NATIONAL GREENHOUSE

REGISTRY IN ROMANIA

Mihaela DUPLEAC - TERRA Millennium III, ROMANIA

Development of Registries, REC&CANCEE Side Event, SBSTA, June 7, 2003

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1. INTRODUCTION

• Project in the frame of REC’s “Support for the Implementation of the Kyoto Protocol”

• October 2002 - March 2003

• TERRA Millennium III - apolitical, non-governmental and not for profit organization for environment protection; regional center of CAN CEE, legitimated by the UN to follow the UNFCCC negotiations

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Objectives:– overview of the intl. requirements (UNFCCC,

EU) for national registries (NR)– overview of the national circumstances that

support/hinder the implementation of a NR in Romania

– establishment of the specific needs related to the NR implementation

– establishment of a scheme for the NR under the most probable option for Romania’s participation in flexible mechanisms

– contribution to capacity building in Romania - recommendations on the next steps.

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Methods:• desk research

– international requirements

– trading schemes

– existing climate policy, legal framework, institutions, capacity, needs, financial support

– existing monitoring and registration systems

• interviews– specialists - env. & energy research, statistics, companies,

financing institutions; operators of existing registries

– decision makers (MWEP, MIR)

• brainstorming• comments on the draft paper.

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2. INTERNATIONAL REQUIREMENTS ON THE IMPLEMENTATION OF A

GHG REGISTRY

• UNFCCC Guidelines

• EU Proposed Scheme for GHG Emissions Allowance Trading

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UNFCCC Guidelines

• Kyoto Protocol: each Annex I Party shall establish and maintain a NR

• COP 7, Marrakesh Accords: decisions on NR, CDM registry and independent transaction log

• COP 8, New Delhi: technical standards for the structure and data formats of registry systems.

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EU Proposed Scheme for GHG Emissions Allowance Trading

• MS/authorities will grant GHG permits that set obligations to hold transferable allowances equal to the actual emissions

• Yearly, companies must submit for cancellation a number of allowances corresponding to their actual emissions

• Holding and tracking of allowances will be done through an electronic register

• Preliminary phase 2005-2007

• Second phase - five years periods, starting 2008

• Linked national registries - crucial component

• Synergies with existing legislation (IPPC Directive) - EPER

• Accession countries may link to the EU scheme by entering into agreements with EU Parties to mutually recognize each other’s allowances

• Proposal does not foresee inclusion of credits from JI and CDM.

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3. NATIONAL CIRCUMSTANCES FOR THE IMPLEMENTATION OF A GHG

REGISTRY IN ROMANIA

GENERAL

• Romania - Annex I country• Ratified the Kyoto Protocol in 2001• MoUs with: The Netherlands, Switzerland,

Austria, Norway, Denmark• AIJ already, JI under development; ET envisaged.

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INSTITUTIONAL FRAMEWORK

• MWEP; national climate change focal point

• Future National Environmental Agency

• Environment Protection Inspectorates

• National Commission on Climate Change

• Institutes of research (ICIM, INMH, ISPE, ICEMENERG)

• National Institute of Statistics

• NGO - TERRA Mileniul III.

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CLIMATE CHANGE STRATEGY AND ACTION PLAN

• No specific CC strategy• Guidelines for NAPCC initiated by REC Romania

(March 2003)• Strategies for the environment protection (1996; 2001-

2004)• National strategy for economic development of

Romania• National strategy for sustainable development• Sectoral strategies• NEAP (1995); new one scheduled for 2003.

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LEGISLATION

• Ratification of UNFCCC in 1994 (Law) Ratification of Kyoto Protocol in 2001 (Law)

• Law on environmental protection

• Law and ministerial orders on the protection of atmosphere

• Set of laws regarding the Environment Fund

• Law regarding integrated pollutants prevention and control (IPPC Directive)

• Ministerial order for the set up of the PER.

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NATIONAL COMMUNICATIONS AND INVENTORIES

• NC 1 (1995) - used CORINAIR• NC 2 (1998) - used the 1995 IPCC Guidelines,

includes Inventory for 1989-1991 and estimates for 1992-1994

• NC 3 (2003) - draft; revised UNFCCC Guidelines • Inventory for 1992-2000 and National Inventory

Report for 2000 were submitted in Dec. 2002, based on revised UNFCCC Guidelines and Common Reporting Format.

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Circumstances that SUPPORT the Implementation of a NR in Romania

• Political Commitment– First Annex I country that ratified the Kyoto Protocol

– commitment to participate in flexible mechanisms (ranked as the most interested AC)

– commitment to keep the pace with EU initiatives

• Legislation– primary legislation in place

– precedent created: setting up of the PER

– existing primary and secondary legislation on electronic commerce

• Experience with other registries– most existing registries in the country are operated by governmental institutions, under

specific regulation

– existing capacity for developing, operating and maintaining registries is satisfactory

– many Romanian companies dealing with software development and computerized services emerged on the internal and international market

– March 2003: National Guide of Pollutant Emissions issued; implementation of PER - public register to provide environmental information on industrial activities covered by IPPC Directive (including GHGs); useful for air emissions trading between facilities PER and NR efforts can be joint.

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Circumstances that HINDER the Implementation of a NR in Romania

• Strategy - no clear strategy on GHG mitigation

• Compliance with the UNFCCC reporting requirements - until present the country has not provided the GHG Inventories annually; only 3rd Inventory (for 1992-2000) complies with the requirements

• Institutional– reduced climate related capacity in the MWEP– National Commission on Climate Change met only once a year (1997-2002), no working

group, no activities between meetings; starting 2003, the frequency of the meetings has raised

• Monitoring systems for air quality– lack of funds very few stationary sources are equipped with continuous measurement

instruments to monitor air emissions– a reliable inventory can not be achieved at a regional/local level data uncertainties in

collecting emissions info from sources, low capacity on verification of data at the local inspectorates for environment protection

• Financing - financial assets at MWEP are unsatisfactory; new Environmental Protection Fund

• Status of international negotiations on registry systems - not finalized yet, ongoing discussions in the EU, Romania follows the discussions.

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National Registry Built in Romania or Acquired from Abroad?

1) ACHIEVEMENT OF THE REGISTRY IN ROMANIA– Romania has the background, necessary expertise and

means– less costly, while respecting international requirements– best adaptation to the local situation– built on existing databases in the country– implemented using existing infrastructure– limited external support: technical and financial

assistance (MoUs)– establishment of national framework of recording

relevant information, as a preliminary step to the NR, while intl. negotiations settle an agreed and detailed set of requirements for the NR

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2) ACQUIRING THE REGISTRY FROM ABROAD• readily made Registry, once such systems emerge internationally

• eliminate concerns regarding credibility and compatibility with other international registry systems

• low existing legislative, financial and even technical capacity in the country

• international negotiations have not been finalized yet stand-by approach

• international technical and financial assistance for the implementation (MoUs)

3) WHILE STANDARDS ARE STILL BEING NEGOTIATED INTERNATIONALLY, ROMANIA NEEDS TO START THE INSTITUTIONAL FRAMEWORK FOR THE REGISTRY

• designation of the NR Administrator (governmental/private body)

• selection and training of personnel

• definition of the NR requirements etc.

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4. DESIGN OF A NATIONAL GHG REGISTRY FOR ROMANIA

ROMANIA’S POLICY OPTION REGARDING PARTICIPATION IN FLEXIBLE MECHANISMS

• Romania is willing to participate in JI and ET (seller)

• currently it is envisaged that only the government will be entitled to trade; further on, probably legal entities will also be allowed to trade

• a domestic trading system is not likely to evolve at present in Romania.

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GENERAL REQUIREMENTS FOR THE DEVELOPMENT OF A NATIONAL REGISTRY

• NR to ensure accurate accounting of the issuance, holding, transfer, acquisition, cancellation and retirement of AAUs, ERUs, RMUs and the carry-over of the AAUs and ERUs

• concordance with technical standards (mandatory and indicative) - issuance and transactions occur in an accurate, transparent and efficient manner

• Romania will have to provide a description of its NR to the UNFCCC (Marrakesh Accords)

• NR will be reviewed at UNFCCC• Romania may link its NR to the EU’s trading scheme by entering into

agreements with EU Parties so as to mutually recognize each other’s allowances

• Romania’s NR will be integrated in the EU network of NR and linked to the Central Emissions Register.

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FUNCTIONS OF THE REGISTRY (1)

• Recording of units– holding account - containing initial AAUs & RMUs and

ERUs initiated in JI projects– cancellation account - corresponding to each commitment

period– retirement account - for each commitment period, to

demonstrate compliance– each legal entity authorized to trade will have at least one

holding account– available list of legal entities (to UNFCCC Secretariat and

public)– serial numbers - assigned to AAUs, RMUs, ERUs– account numbers - assigned to every account in the NR.

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FUNCTIONS OF THE REGISTRY (2)• Processing transactions

– issuance • no. of AAUs to be issued is equal to no. of tones of CO2e

corresponding to Romania’s assigned amount (92 % of emissions in 1989)

• issuance of RMUs, equivalent to net GHG removals • issuance of ERUs, as result of JI projects

– cancellation (AAUs, RMUs, ERUs), in case:• the LULUCF activities result in a net source of GHG

emissions;• of non-compliance;

– retirement - valid AAUs, ERUs and RMUs shall be retired for the commitment period, to be used for demonstrating compliance

– carry-over - neither retired nor cancelled AAUs can be carried over (if retirement account shows compliance).

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FUNCTIONS OF THE REGISTRY (3)

• Substantiation of compliance/ Reporting– Information from and about NR will be incorporated in the annual

Inventory reports and the National Communications

– The National Inventory Report shall contain information on any changes that have occurred in the NR, compared to last submission

• Access to information– NR records non-confidential information

– Publicly accessible user interface through the Internet

– Data transparency improved credibility regarding:• implementation of measures for compliance achievement

• reliable systemof GHG emissions monitoring, verifying, registration and reporting Romania would be a trustworthy counterpart for transactions (including JI projects).

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5. RECOMMENDATIONS FOR THE ESTABLISHMENT OF A NATIONAL

REGISTRY IN ROMANIAPOLICY• Urgent development of CC strategy, stating also the modalities Romania

will participate at flexible mechanisms• A more enhanced MWEP coordination of the CC related activities; strategy

before action plan

LEGISLATION• Creation of a specific legal framework to set up the registry (i.e. Ministerial

Order, as for PER)– definition of the NR’s functions;– data collection, validation and registration in the NR;– assigning an institution responsible with the NR.

• Emission trading needs to be regulated• Transposition of the Council Decision 93/389/EEC as amended by Decision

99/296/EC for a Monitoring Mechanism of Community GHG Emissions - inclusion in the MWEP’s Program of Priority Measures (2002-2004).

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COMPLIANCE WITH UNFCCC REPORTING REQUIREMENTS

• Prior to January 1, 2007, Romania will have to submit to the UNFCCC Secretariat the report on calculation of its assigned amount for the first commitment period, plus a complete inventory

• Romania will have to issue a quantity of AAUs equivalent to its assigned amount in its NR

• Romania will have to authorize:– legal entities to participate in projects;

– legal entities to make transactions.

• Immediate implementation of measures should commence, as the country lacks infrastructure and capacity.

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INSTITUTIONAL BUILDING• Assign of an institution as Central Administrator of the NR,

governmental (MWEP’s option)/ private body• Romania - separate registry, not a consolidated one• Later, brokerage companies will evolve.CAPACITY BUILDING• Development of a national institutional infrastructure: MWEP,

inspectorates for environment protection, Central Administrator, MIR (and agencies)

• Coordination between:– responsibles in the MWEP;– MWEP and other governmental institutions;

• targeted trainings addressed to personnel, including in inspectorates for environment protection; international assistance needed.

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MONITORING

• Monitoring systems needs a dramatic improvement:– increase of number of monitored sources and

– endowment with high quality monitoring equipment.

• Enforcement of the existing legislation in the environment protection

• Close follow-up of the fulfillment of the so-called ‘programs for compliance’ of facilities by inspectorates.

FINANCING

• MWEP does not dispose of sufficient financial assets

• New Environment Protection Fund, low resources

• Further need for international financing assistance (agreements under MoUs, GEF capacity building).

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Dr. Mihaela DUPLEAC

Executive Director

TERRA Mileniul III

1-3 Walter Maracineanu Sq., Room 171, sector 1, Bucharest, ROMANIA

Tel/fax: +4021- 312 68 70

Email: terra@fx.ro; terramileniul@xnet.ro

Http://terraIII.ngo.ro