1. European Commission: Environment Directorate General Slide: 1 Registry systems for the EU emissions trading scheme SBSTA pre-sessionals Bonn, Germany, 2 June 2003 Olivia Hartridge DG Environment, European Commission

2. European Commission: Environment Directorate General Slide: 2 Common Position: scope and timing l European Parliament 1 st reading: 10 October 2002 l Common Position between EP and Council reached: 18 March 2003 l European Parliament 2 nd reading: 30 June-4 July 2003 l If no 2nd reading agreement between EP and Council: conciliation is initiated l EU ETS to commence in 2005 in up to 28 countries … l … so implementation has begun in earnest

3. European Commission: Environment Directorate General Slide: 3 Registries for the EU scheme l Regulation to be adopted laying down minimum requirements for Member States’ registries l Draft regulation by September 2003 l Therefore, work in progress to develop functional and technical specifications for Community registry and European Transaction Log … l … and minimum requirements for Member States’ national registries

4. European Commission: Environment Directorate General Slide: 4 Some basic considerations ●Registries are NOT trading platforms, and so transfers are entirely distinct from trades and price information ●Registries may be maintained in a consolidated system ●Any person may hold allowances

5. European Commission: Environment Directorate General Slide: 5 Registries for the EU scheme (i)Trades within a single Member State give rise to adjustment between the operators involved in that Member State only (ii) Trades between entities in different Member States give rise to: a) adjustment of allowance holdings between operators involved b) adjustment of assigned amount units between Member States involved (from 2008)

6. European Commission: Environment Directorate General Slide: 6 Registries for the EU scheme Monitoring Mechanism Proposal: Article 6 “The Community and its Member States shall establish and maintain registries in order to ensure the accurate accounting of the issue, holding, transfer, cancellation and retirement of assigned amount units, removal units, emission reduction units and certified emission reductions. These registries shall incorporate registries established pursuant to Article 19 of Directive xx/xxxx/EC …”

7. European Commission: Environment Directorate General Slide: 7 Creation of allowances 2

8. European Commission: Environment Directorate General Slide: 8 Relationship between ETL and ITL REGISTRY A REGISTRY B ETL X 7 ITL REGISTRY A REGISTRY B ETL X 7 2005-2008After 2008

9. European Commission: Environment Directorate General Slide: 9 Macro processes ● The following macro processes have been defined for the functional specifications: rThe management of registry accounts rThe issuance, allocation, cancellation, retirement and eventual banking of allowances rThe transfer of allowances domestically/internationally rThe assessment of compliance - reconciliation between holdings of allowances and verified emissions rThe production of reports

10. European Commission: Environment Directorate General Slide: 10 Key issues l Maintaining compatibility with UNFCCC data exchange standards l Ensuring access to information delivers transparency but does not impact on market l CPR the responsibility of individual Parties, not entities l Minimising administrative costs: m Linking entities’ account numbers to Member State permit numbering systems? m Providing verifiers’ access to input entities’ annual emissions data?