German greenhouse gas emission inventories vs. EU emissions trading system in Germany Michael Strogies Dr. Volker Kathöfer German Environmental Agency.

German greenhouse gas emission inventories

vs.

EU emissions trading system in Germany

Michael StrogiesDr. Volker Kathöfer

German Environmental Agency (UBA, Berlin, Dessau)

Copenhagen, 09. February, 2006

State of the art

450

550

650

750

850

950

1050

1150

1250

1990 1995 2000 2005 2010 2015 2020

Mio. t

14000

14500

15000

15500

16000

16500

17000

17500

18000

TJ

-15,0 %CO2-Inventory(2004 prelim)

-21%GHG-Burden Sharing (2008-2012)

CO2 Inventory

GHG Inventory

-18,3 %GHG-Inventory (2004 prelim)

Primary Energy Consumption

OUTLINE

— Brief description of the National Authority (NaKo),

— Brief description on the Emission Trading Agency (DEHSt)

— tasks and functions and timing

NaKo

Single National Entity Federal Environmental Agency (I 4.6)focal point and national coordinationdraft reports

Implementation / update of „Zentralised System on Emission“ ZSEconsistent data management for all existing obligations

Implementation of a „Quality System Emissioninventories“ QSEQA/QS – system

Responsibilities / cooperation regulation on climate statistics (KlimaStatG - in preparation)

NaKo

Quality System Emissions inclusion of whole process determination of methods, data gathering, data processing and estimation,reporting

Should be followed by all participants of the national system agency “in house standard”

(internal regulation)others regulated by “KlimaStatG”

NaKo

Content and parts of QSE (11/2005 and KlimaStatG):

single national entity responsibilities for specific source and sink categoriestime schedule for all steps of data flowminimum requirements for data (documentation, QA/QC)cooperation for review proceduresspecific tasks treatment of confidentiality

GERMAN EMISSIONS TRADING AUTHORITY: TARGETS

Ambition is to set up Emission Trading as environmentally and economically effective as possible ... that requires ...

— to ensure the ecological integrity of the instrument

— to avoid market distortions

— to minimize transaction costs

— to facilitate the trading by an efficient interaction

between traders, trading platforms and registries

Total Staff: 75

Department E 1 Industry Sector Allocations, Customer Service

and Legal matters

Department E 2 Energy Sector Allocations, Reserve

Management, and Registry

JI/CDM (optional) Emissions TradingLegal Office

Process Control,Quality Control

Customer Service, Communications

Industry Installations IIIndustry Installations I Energy Installations I

IT, Quality Control

Central Registry

Energy Installations II

Reserve Management, Reports, National Allocation plans

Division E German Emissions Trading Authority (DEHSt)

GERMAN EMISSIONS TRADING AUTHORITY: ORGANISATION

GERMAN EMISSIONS TRADING AUTHORITY: TASKS

— to allocate and issue allowances

— to control operator‘s Monitoring Reports

— to operate the ETS Registry (Account management); + Kyoto

— to draft national and international Reports

— to co-operate with the EU and the UNFCCC

— to contribute and to develop future National Allocation Plans

(NAP)

— to support the integration of the Kyoto-Mechanisms (CDM/JI)

LEGAL FRAMEWORK (GERMANY)

— Greenhouse gas emission allowance trading law (TEHG), 15th July, 2004 (legal und institutional basis for ETS)

— Allocation law 2007 (ZuG 2007), 31th August, 2004(ET-Budget and allocation rules for 2005-2007)

— additional ordinances• Allocation Ordinance• Cost Ordinance, 01st Sept., 2004 • Registry Ordinance

GERMAN NAP

— Total amount of allowances to be allocated: 495 million t CO2

annually +3 million tons CO2 national reserve

— Allocation method for existing installations: Grandfathering, based on emissions in 2000-2002

— Allocation method for new entrants: Benchmarking, based on BVT-Benchmarks

— Special rules for early action, process emissions, CHP

TIMETABLE FOR ALLOCATION / ISSUANCE

On the basis of the provisions of the EC Directive and German national legislation (TEHG, ZuG)

(Electronic) Application Procedure

1. January 2005 Start of the first commitment period

Early March, 2005 Issuance of allowances (1st trench)

31. August 2004 – 20. September 2004

21. September 2004 – December 2004

2,300 Applications under examination – allocation of allowances free of charge for the first commitment period 2005

FIRST RESULTS OF ALLOCATION

— 1,849 allocation notices

— total of allowances for 1,485 million tons CO2 for

commitment period2005-2007 (495 million tons per year)

— proposed amount exceeds defined maximal budget by 42 million tons (14 million tons per year, 2.8 %) -> proportionate adjustments for certain installations

— reason: surprisingly high rate of companies applying based on

the allocation rule for „new entrants“ (~ 77 million tons CO2

per year)

CO2

N2O

HFC

SF6

PFC

CH4

Stationary Combustion

Emission Trading Scheme

GHG and ETS

National Energy Balance

National Inventory Report

ET Monitoring (each installation)

NIR, ET, EB

Energy Sector Consumption

1.007.950 1.592.641 431.867 2.024.508 50%

1.258.449 1.461.718 82.395 1.544.113 81%

187.392 391.089 4.147.264 4.538.353 4%

416.020 472.303 2.333.192 2.805.495 15%

274.955 200.511 475.466 50%236.113

hard coal

Lignite

Mineral oil

Natural gas

Other fuels

ET Allocation Energy Balance

Comparison total consumption (TJ, 2000)

hard coal 1.007.950 1.592.641 63%

Lignite 1.258.449 1.461.718 86%

Mineral oil 187.392 391.089 48%

Natural gas 416.020 472.303 88%

Other gases 81.596 274.955 86%

Other fuels 154.516

AR, Energy Sector (TJ, 2000)

ET AllocationEnergy Balance

National Energy Balance

National Inventory Report

ET Allocation

AR – hard coal, energy sector (2000)

64.630 TJ

61.000 TJ

64.630 TJ

Emission Value (ET Allocation)

hard coal lignite oil gas0

50

100

150

200

other

t CO2/TJ

Result

We assume some new time series that are yet not estimated, due to detailed information by certain installations

We assume new mapping of fuel types and installations

We do not assume changes in total, pending from monitoring

We are not amused reporting many changes in time series in the next Inventory base year problematic

emission factor set for CO2

comparability issue,

analysis for solid fuels implementation of annual different EF

for brown and hard coal

basic set of EF, taking into account the region and specific fuel

characteristics

annually mixed EF is used in the inventories (basis import statistic)

slightly modifications behind the dot

Interaction between ETS and Inventory (I)

“new” sources

completeness issue,

analysis of information provided by operators for NAP 1

(implemented in the inventories 2006)

limestone and dolomite use: (+ appr. 6 Mio t CO2 1990)

iron and steel

large combustion plants

others (e.g. ceramic industrie)

detailed refinery process: (+ appr. 4 Mio.t CO2 1990)

H2 generation

use of catalysts

reallocation between energy and process related emissions)

Interaction between ETS and Inventory (II)

First: I had a dream…

take validated plant specific information, where available, run statistic

estimates for the remaining sources

but….

No clear information what share of a specific source category is

covered by ETS

future dealing:

use ETS data only for verification and methodological questions

clear need: improved characterization of ETS facilities on detailed level

according to detailed IPCC systematic (checked by the authority)

Methodological: top down vs. bottom up

big issue

treatment on level of operator and authority

For regulation update it would be very helpful to have a EU-given

obligation to use information provided by ETS for the purpose of

improving the emission inventories.

Need: dealing the confidentiality

— harmonized monitoring and reporting on emissions trading in Germany

needs to be established (implementation of EU Monitoring Guidelines,

coordination with international reports on climate protection - national)

— harmonizing Emission and Activity Data of greenhouse gases , CAFE

and ET (EU and national)

— harmonization between ET Monitoring and Energy Balances (national)

FUTURE WORK 2006 – 2007

Thank you very much for your attention!

…