The Aviation EU ETS Verification Process Presentation of VerifAvia Julien Dufour, CEO, VerifAvia SARL & VerifAvia (UK) Ltd
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 2
What is the legal basis of Verification? A requirement of the EU ETS Directive Article 15 of EU ETS Directive: • – “ Member States shall ensure that the reports submitted by aircraft operators […] are verified” . – “ Member States shall ensure that an aircraft operator whose report has not been verified as satisfactory […] by 31 March each year for emissions during the preceding year cannot make further transfers of allowances until a report from that aircraft operator has been verified as satisfactory .” 3
What is the legal basis of Verification? A set of legal requirements • Article 15 EU ETS Directive • Annex V Monitoring and Reporting • Annex I, Section 10.4 • Annex XIV, Section 9 Guidelines (MRG) • Annex XV, Section 8 European Accreditation • EA-6/03 Forum • ISO 14064 ISO / IAF • ISO 14065 • IAF Mandatory Document for the Application of ISO 14065 • France National legislation • UK • Etc. 4
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 5
What is Verification? The third pillar of the MRV process Verification Monitoring Reporting Objective: Credibility, Reliability and Accuracy of the EU ETS 6
What is Verification? Checking the conformity of the procedures and the correctness of the data The aim of verification is to reach a verification opinion with reasonable assurance that: The existing procedures The data submitted in the conform with the approved annual emissions or tonne- monitoring plans, the EU kilometre reports are fairly ETS regulation, and the stated, i.e. free from national legislation of the material misstatements administering Member State 7
What is Verification? A nine-step process Strategic & Verification Preparation: Pre-contract Risk analysis plan Business Data Execution: process Reporting analysis analysis Final Technical EU ETS Completion: verification review registry opinion 8
What is Verification? A ten-step process: Preparation Step 1. Pre-contract Stage • Ensure that the scope and extent of verification activities and time quoted are sufficient to meet the requirements for «Reasonable Assurance». Step 2. Strategic & Risk Analysis • Understand the operator’s organisation and the design and implementation of its EU ETS management and control systems. Identify where there are risks of system failure/breakdown that might result in a material misstatement in the EU ETS data. Step 3. Verification Plan • Prepare a verification plan which includes a detailed verification programme, a data analysis plan and the details of a site visit, if required. 9
What is Verification? A ten-step process: Execution Step 4. Business Process Analysis • Implement the verification plan in order to assess whether the EU ETS management system conforms with the approved monitoring plans, the MRG and the national legislation of the administering Member State. Step 5. Data Analysis • Test data using an EU ETS data analysis system which automatically performs plausibility checks on the entire data set. Perform data sampling and other key cross-checks. Step 6. Reporting • Maintain and share with the operator an Issues Log that lists issues arising so that they can be closed out before completion of the audit. 10
What is Verification? A ten-step process: Completion Step 7. Technical Review • Review the verification pack and draft verification opinion by an independent technical reviewer who did not take part in the verification process itself. Step 8. Final Verification Report • Submit the final verification opinion to the operator who will forward it to the Competent Authority. Includes materiality analysis. Step 9. EU ETS registry • Approve the relevant entries into the EU ETS registry of the operator. 11
What is Verification? Understand the data transformation process ORGANIZATIONAL Process analysis • CONTEXT Review of documents – Observation of processes – / IT systems Interviews Procedures People – Corroboration of – information Data transformation Data Information Data analysis: • process Data testing – Data sampling – Audit trails – Software Hardware ORGANIZATIONAL CONTEXT 12
What is Verification? Seven general principles Completeness – All emissions included Improvement of performance – Consistency – Results Operators can comparable over time improve performance Transparency – Data Faithfulness – Results and assumptions can be depended on recorded Cost effectiveness – Trueness / accuracy – Balance accuracy and Results reflect true costs data 13
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 14
What is the timeline of Verification? Start verification as early as possible Verification can start • To avoid pressure by conducting all the as early as possible verification work at the last minute • To allow time for corrective actions in 2010: 15
What is the timeline of Verification? A three-stage process • Optional • Compliance review • ETS Management System Review Pre-audit in • Data analysis Q3 of 2010 • Strategic and Risk analysis • Verification plan • Verification of processes Stage 1 in Q4 • Partial data verification of 2010 • Full data verification • Verification opinion • Technical review Stage 2 in Q1 • Registry of 2011 Legal deadline: 31 st of March of 2011 16
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 17
Who are the verifiers? Must be accredited according to ISO 14065 Verification bodies of GHG emissions under the EU ETS • Directive: – Must be accredited according to ISO 14065 standard and European guidance EA-6/03 – Must develop and implement an EU ETS Assurance Management System About the accreditation: • – Granted by EU national accreditation bodies (e.g. UKAS, COFRAC) of the home country – Accreditation process includes witness verification audits – Accreditation is sector specific (non-aviation accredited verifiers must also be accredited for aviation) 18
Who are the verifiers? Must be approved by the Competent Authority The verification body must be approved by the Competent • Authority Most Competent Authorities will approve verifiers from • other EU countries provided that: – Accreditation body signed the EA multilateral agreement and use EA-6/03 – Must demonstrate knowledge of national legislation – In certain cases: witnessed audit required 19
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 20
Who is VerifAvia? A verification body of GHG emissions… A verification body of GHG emissions under the EU ETS Directive… • ISO 14065:2007 accreditation by the United Kingdom Accreditation Service (UKAS) to provide GHG verification for the aviation sector under the EU ETS • Can conduct EU ETS verification for airlines and business jet operators reporting to the following countries: Austria, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Spain, the United Kingdom and Wallonia (Belgium). • Operations office in Paris, registered address in London • Presence in Paris, London, Berlin and Vancouver • Ability to communicate in English, French, German, Italian & Spanish languages 21
Who is VerifAvia? …dedicated to the aviation sector … dedicated to the aviation sector: • EU ETS verification body dedicated to the aviation sector • A team of aviation experts with extensive EU ETS experience who have received professional verification training in the UK • Frequently invited to speak at conferences and to contribute to news articles about the aviation EU ETS • Use of an EU ETS data analysis system allowing a more accurate and precise verification process • A structure and a technical expertise that allow to conduct verification audits in the most flexible , efficient and cost-effective way 22
Who is VerifAvia? An EU ETS Assurance Management System that comprises standard procedures for each step VerifAvia ETS Assurance Management System - List of forms: • Client Application Form • Contract Review Form • Strategic Analysis and Risk Analysis Form • Verification Plan Form • Process Analysis Form • Data Analysis Form • Internal Verification Report Form • Verification Opinion Statement • Technical Review Form • Issues Log 23
About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths 24
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