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Robust, simplified, transparent, consistent and accurate monitoring and reporting of greenhouse gas emissions is essential for the effective operation of the Emissions Trading System, the EU's key tool for reducing greenhouse gas emissions cost-effectively. The European Commission helps industrial installations and aircraft operators monitor and report their emissions every year through the adoption of guidelines, which are legally binding.

Industrial installations and aircraft operators covered by the EU Emissions Trading System (EU ETS) are required to have an approved monitoring plan, according to which they monitor and report their emissions during the year. In the case of industrial installations, the monitoring plan forms part of the approved permit that is also required.
The data in the annual emissions report must be verified before 31 March each year by an accredited verifier. Once verified, operators must surrender the equivalent number of allowances by 30 April of the same year. Common rules for monitoring and reporting, as well as the accreditation of verifiers and the verification of annual emissions reports are important for ensuring the quality of the annually reported emissions and the credibility of the data.
This annual procedure of monitoring, reporting and verification (MRV), as well as all processes connected to these activities are known as the “compliance cycle” of the EU ETS.
In line with the EU ETS Directive, the Commission has adopted guidelines for the monitoring and reporting of greenhouse gas emissions, known as the "MRG". The original guidelines were adopted in 2004 for the first trading period (2005-2007) and last revised in 2007 for the second trading period (2008-2012). For the third trading period (2013-2021) and onwards, EU ETS MRV will be required to comply with two new Commission Regulations, one specific to monitoring and reporting and the other to verification and accreditation.
In order to promote administrative efficiency and a harmonised approach in the Member States, the Commission has also published electronic templates for monitoring plans and reports for tonne-kilometre data and annual emissions from aviation activities (in line with Annexes XIV and XV of the MRG).
The Commission is currently in the process of revising the existing guidelines in order to make them clearer, more transparent, as well as easier to be used and implemented. The monitoring and reporting procedures will consequently be harmonised in all the Member States, while the services provided by accredited verifiers will be more reliable and cost-effective.