This new Regulation is the instrument which provides the legal basis to implement revised domestic commitments set out in the 2009 climate and energy package, as well as to ensure timely and accurate monitoring of the progress in implementation of these commitments.
The opportunity has also been taken to propose improvements in the legislation in the light of experience gained in implementing the Monitoring Mechanism Decision including its implementing provisions (Decision 2005/166) as well as in response to the international negotiations and various United Nations Framework Convention on Climate Change (UNFCCC) requirements.
In general, the EU's current and future mitigation actions will be facilitated through the enhanced monitoring and reporting system being put in place.
The overall objectives of the new Regulation are:
This Regulation covers reporting from the EU and its Member States required under the UNFCCC and the Kyoto Protocol.
It covers emissions of six greenhouse gases from all sectors (energy, industrial processes, land use, land use change and forestry (LULUCF), waste, agriculture, etc). It is based on methodologies established under the Intergovernmental Panel on Climate Change (IPCC) and existing aggregated statistical data at the national level.
The reporting under the new Regulation differs from reporting under the EU Emissions Trading System (EU ETS) Directive which covers reporting from companies to Member State authorities and is based on data collected by industry.
Enhanced reporting is essential for the recognition of the Union’s and the Member States' efforts in fulfilling their commitments on the provision of financial, technological and capacity-building support to developing country Parties as agreed at the 2009 and 2010 UNFCCC conferences. In this context the particularity of the EU reporting system must also be taken into consideration which necessitates ensuring quality reporting at both the EU and the Member State level, and consistency of reporting between the EU and the Member States.
The new Regulation:
The new regulation provides the basis for the reporting of auctioning revenues from the EU ETS in line with the provisions of the climate and energy package. It ensures transparency and monitors the fulfilment of the commitment to use at least half of the annual auctioning revenues - amounting to at least €11 billion - for measures to fight climate change in the EU and third countries. This reporting does not impose additional obligations or costs on companies, as it is directed to treasuries/finance ministries.
At the 2009 UNFCCC Conference in Copenhagen, the Union and the Member States committed to providing significant fast-start and long-term climate financing and technological support to developing countries. At the 2010 Conference in Cancun, parties agreed (paragraph 40 of Decision 1/CP.16) that each developed country shall enhance reporting on the provision of financial, technological and capacity-building support to developing country Parties.
The new Regulation secures the transparency and comprehensiveness of reporting on the type and amount of financial and technology support provided to developing countries at both the EU and Member State level as per the commitment made under the UNFCCC. The new Regulation sets out necessary requirements to increase to the extent possible the comparability and consistency of reporting in these areas through the establishment of common rules, methods and formats. This enables the clear identification of gaps and subsequent improvements. On the basis of this systematic, common approach to reporting on support, the EU will be able to demonstrate unequivocal compliance with its obligations under the UNFCCC.
The climate and energy package called for"faster, efficient, transparent and cost-effective monitoring, reporting and verification of greenhouse gas emissions". It also identified areas where action at the EU level would be necessary but where there is currently inadequate or insufficiently accurate data collected at EU and Member State level.
This new Regulation contributes to the 20% emission reduction objective by making the annual review process of reported information faster and more efficient, and by enabling the annual determination of compliance by the Member States with their targets.
The new Regulation also requires specific reporting on policies and measures implemented by the Member States in the non-ETS sectors thereby promoting wider mitigation action at the national level which should help Member States attain their individual targets, and the EU as a whole its 20% commitment.
The Europe 2020 strategy, the new integrated economic policy strategy for growth and jobs, includes the European and national emissions limitation targets as headline targets. The new Regulation allows for the monitoring of progress towards these targets.
Finally, the new Regulation sets the basis for reporting emissions from maritime transport and the non-CO2 impacts from aviation hence paving the way for the implementation of effective measures in these sectors.
As the reporting requirements of the new Regulation are set at the national level based on IPCC methodologies and existing statistical data, the main impacts will be on the national public authorities which are responsible for gathering and analyzing the relevant data and producing the reports required.
The revision will not necessitate additional data collection from SMEs or industry, as there are no direct or indirect reporting requirements imposed on SMEs or industry, and the proposed changes will not have any impact on the administrative burden of ETS installation operators or any other industrial players. The reporting requirements as regards financial and technology support and adaptation apply to national authority level reporting, and do not impose any obligations on companies.
The new Regulation will ensure the availability of better and more comprehensive information on climate change-related issues, facilitate the public's access to available information, and generally promote the long-term goal of raising awareness on climate change issues.
The proposal for a Regulation will be submitted to the European Parliament and to the Council for adoption under the ordinary legislative procedure. Upon its adoption by the Parliament and the Council, the Regulation will be published in the Official Journal of the European Union and 20 days later it will enter into force. The Regulation will fully substitute the current Monitoring Mechanism Decision, will be binding and will be directly applicable in all Member States.