PAVING THE ROAD FOR THE IMPLEMENTATION OF A NATIONAL GREENHOUSE REGISTRY IN ROMANIA

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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, RECCANCEE Side Event,
  SBSTA, June 7, 2003

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1. INTRODUCTION

• Project in the frame of RECs 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 Romanias 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 others 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

• ROMANIAS 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 EUs trading
  scheme by entering into agreements with EU
  Parties so as to mutually recognize each others
  allowances
• Romanias 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 Romanias 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 ROMANIA

• POLICY
• 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 NRs 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 MWEPs 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 (MWEPs 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 [phone]
• Email terra_at_fx.ro terramileniul_at_xnet.ro
• Http//terraIII.ngo.ro