It is to be underlined that under the EU ETS rules the subtraction of CO2 from installation’s emissions, which is associated with the transfer of CO2 out of the installation, is allowed only in exhaustively-listed three situations.
To close potential loopholes connected to the transfer of inherent or pure CO2, such transfers under the M&R Regulation are only allowed subject to very specific conditions.
Those conditions are that the transfer of inherent CO2 should only be to other EU ETS installations and the transfer of pure CO2 should only occur for the purposes of storage in a geological storage site pursuant to the Union’s greenhouse gas emission allowance trading scheme, which is at present the only form of permanent storage of CO2 accepted under the Union’s greenhouse gas emission trading scheme.
The M&R Regulation makes, the reservation that those conditions should not, nevertheless, exclude the possibility of future innovations.
The M&R Regulation allows the operator to subtract from the emissions of the installation any amount of CO2 originating from fossil carbon in activities covered by Annex I to Directive 2003/87/EC, which is not emitted from the installation, but transferred out of the installation to any of the following:
(a) a capture installation for the purpose of transport and long- term geological storage in a storage site permitted under Directive 2009/31/EC;
(b) a transport network with the purpose of long-term geological storage in a storage site permitted under Directive 2009/31/EC;
(c) a storage site permitted under Directive 2009/31/EC for the purpose of long-term geological storage.
It is to be underlined that under the EU ETS rules for any other transfer of CO2 out of the installation, no subtraction of CO2 from the installation’s emissions is allowed.
The operator of the installation out of which the CO 2 transferred must provide in its annual emission report the receiving installation’s installation identification code recognised in accordance with the Registry Regulation. This rule also applies to the receiving installation with respect to the transferring installation’s installation identification code.
For the determination of the quantity of CO2 transferred from one installation to another, the operator must apply a measurement-based methodology. The emission source must correspond to the measurement point and the emissions must be expressed as the quantity of CO2 transferred.
For determining the quantity of CO2 transferred from one installation to another, the operator must apply tier 4 as defined in section 1 of Annex VIII to the M&R Regulation.
However, the operator may apply the next lower tier provided that it establishes that applying tier 4 as defined in section 1 of Annex VIII is technically not feasible or incurs unreasonable costs.
The operators may determine quantities of CO2 transferred out of the installation both at the transferring and at the receiving installation. In that case the quantities of respectively transferred and received inherent CO 2 must be identical. Where the quantities of transferred and received inherent CO 2 are not identical, the arithmetic average of both measured values must be used in both the transferring and receiving installations’ emission reports, where the deviation between the values can be explained by the uncertainty of the measurement systems. In such case, the emission report must refer to the alignment of that value. Where the deviation between the values cannot be explained by the approved uncertainty range of the measurement systems, the operators of the transferring and receiving installations must align the values by applying conservative adjustments approved by the competent authority.