Carbon Emissions Compliance
In the EU ETS covered installations must verify their relevant emissions for the previous calendar year by 31st March the following year and they must submit enough allowances to their government run compliance account to cover their verified emissions by the 30th April. For example if an installation has verified emissions of 50,000 tonnes it must submit 50,000 EUAs (with each EUA covering 1 tonne of actual emissions) for compliance. A limited number of cheaper offset credits (after 31st March 2015 this is limited to CERs only) can also be used for compliance but must first be swapped into EUAs on a one-to-one basis. This is done in the EU registry accounts and the remaining number of offsets that can be used by each installation is recorded in the same account.
In order to submit allowances for carbon emissions compliance, an installation's verifier must first have registered their verified emissions in the EU Registry. An independent verification process of each installation's emissions must be carried out and the verified number must be approved by the verifier and the installation operator. Only verifiers that are accredited by the relevant national accreditation bodies can be used in order to maintain standards and uniformity across the whole European system. The verifier will check monitoring systems and processes to ensure they are working, accurate and fair. Failing to provide either a verified emissions figure and/or the necessary number of allowances for compliance can lead to heavy penalties for the installation in question, the fine level is currently set at €100 per tonne of emissions.
EU Registry accounts must be opened and Account Representatives and Additional Account Representatives approved in plenty of time ahead of the compliance deadline. Both processes can be lengthy, requiring criminal record checks and other documentation and are particularly difficult in some member states. The registry accounts are used to store, transfer and submit allowances for compliance by everyone involved in emissions trading. Therefore there are different types of account within the EU Registry system depending on the account holder's function within the EU ETS, for example, holding, trading and compliance accounts. Subject to member state approval, accounts can be opened by anyone, not just the installations covered under the EU ETS.
