The Aviation EU ETS Verification Process Presentation of VerifAvia - - PowerPoint PPT Presentation

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

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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
• Annex V

EU ETS Directive

• Annex I, Section 10.4
• Annex XIV, Section 9
• Annex XV, Section 8

Monitoring and Reporting Guidelines (MRG)

• EA-6/03

European Accreditation Forum

• ISO 14064
• ISO 14065
• IAF Mandatory Document for the Application of ISO 14065

ISO / IAF

• France
• UK
• Etc.

National legislation

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About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths

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What is Verification? The third pillar of the MRV process

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Monitoring Reporting Verification

Objective: Credibility, Reliability and Accuracy of the EU ETS

What is Verification? Checking the conformity of the procedures and the correctness of the data

The aim of verification is to reach a verification

• pinion with reasonable assurance that:

The existing procedures conform with the approved monitoring plans, the EU ETS regulation, and the national legislation of the administering Member State The data submitted in the annual emissions or tonne- kilometre reports are fairly stated, i.e. free from material misstatements

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What is Verification? A nine-step process Preparation:

Pre-contract Strategic & Risk analysis Verification plan

Execution:

Business process analysis Data analysis Reporting

Completion:

Technical review Final verification

• pinion

EU ETS registry

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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.

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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.

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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.

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What is Verification? Understand the data transformation process

• Process analysis

– Review of documents – Observation of processes / IT systems – Interviews – Corroboration of information

• Data analysis:

– Data testing – Data sampling – Audit trails

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Data transformation process Information Procedures People Software Hardware Data ORGANIZATIONAL CONTEXT ORGANIZATIONAL CONTEXT

What is Verification? Seven general principles

Completeness – All emissions included Consistency – Results comparable over time Transparency – Data and assumptions recorded Trueness / accuracy – Results reflect true data Cost effectiveness – Balance accuracy and costs Faithfulness – Results can be depended on Improvement of performance – Operators can improve performance

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About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths

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What is the timeline of Verification? Start verification as early as possible

• To avoid pressure by conducting all the

verification work at the last minute

• To allow time for corrective actions

Verification can start as early as possible in 2010:

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What is the timeline of Verification? A three-stage process

Pre-audit in Q3 of 2010

• Optional
• Compliance review
• ETS Management System Review
• Data analysis

Stage 1 in Q4

• f 2010
• Strategic and Risk analysis
• Verification plan
• Verification of processes
• Partial data verification

Stage 2 in Q1

• f 2011
• Full data verification
• Verification opinion
• Technical review
• Registry

Legal deadline: 31st of March of 2011 16

About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths

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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
• ther 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

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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

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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

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Who is VerifAvia? An EU ETS Assurance Management System that comprises standard procedures for each step

23 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

About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths

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Who is VerifAvia? A team of experienced aviation EU ETS auditors…

Julien Dufour, EU ETS Lead Auditor & Technical Reviewer (French, English, Spanish) Gary Cleven, EU ETS Lead Auditor & Technical Reviewer (English) Nicolas Duchêne, EU ETS Lead Auditor & Technical Reviewer (French, English) Stefan Trepke, EU ETS Lead Auditor & Technical Reviewer (German, English, Spanish)

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Who is VerifAvia? …with extensive aviation EU ETS experience throughout the world…

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Who is VerifAvia? …and extensive international aviation consulting and auditing experience.

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About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our Strengths

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IT systems capabilities & data analysis We have access to two EU ETS data analysis systems

SkyBreathe

• Developed by OpenAirlines
• Automatic generation of EU ETS reports
• Automatic identification of data gaps, data

mismatches, abnormal values

• To be used by the verification team for

airlines with a large number of flights

VEDAS (VerifAvia EU ETS Data Analysis System)

• Excel-based
• Developed by VerifAvia
• Automatic generation of EU ETS reports
• Automatic identification of data gaps, data

mismatches, abnormal values

• To be used by the verification team for a

low / medium number of flights

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IT systems capabilities & data analysis A range of options to check the quality of the data

Data gaps Data mismatch

• Schedule
• DCS
• Mass and balance
• Fuel invoices
• EUROCONTROL

Wrong values

• Pax data vs. aircraft

capacity

• Payload data vs.

MTOW or max payload

• Fuel in tanks, fuel

uplift and fuel consumption data

• vs. maximum tank

capacity

Abnormal values

• Industry statistics on fuel

consumption (EMEP / CORINAIR, Small Emitter Tool)

• Airline statistics on fuel

consumption (Two or three dimension regression analysis on fuel consumption according to airports pair, aircraft type, actual payload and / or aircraft registration markings)

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IT systems capabilities & data analysis Four main areas required by EU ETS data analysis systems

Monitoring plan:

• Tier 1 or Tier 2 for

weight of passengers

• ICAO

designator(s) Fleet characteristics:

• Aircraft

registration markings

• Type of aircraft
• Phase in / out
• Type of lease
• Number of seats
• Maximum

capacity of aircraft tanks

• Maximum

payload

• Fuel consumption

methodology EU ETS data:

• Flight information
• Type of flight
• Fuel (after uplift

& block on)

• Fuel uplift (in

volume and in mass)

• Density of fuel

uplift

• Passengers

(number and mass)

• Mass of freight

and mail Other data (optional):

• Schedule /

planning

• DCS
• Mass & balance
• EUROCONTROL
• Fuel invoices

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IT systems capabilities & data analysis Other data cross-checks

Flight data

• If ETS Support Facility available: use ETS Support Facility
• If ETS Support Facility not available: use EUROCONTROL invoices (paper or

electronic or CRCO*DATALINK)

Fuel data

• Cross-check with fuel invoices
• Aggregated fuel consumption vs. total fuel purchased

Data sampling

• Cross-check of EU ETS reported data with primary source of information
• Selection of flights representative of universe
• Risk-based approach
• Closely linked with data analysis

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About the EU ETS verification Legal basis Verification Timeline Accreditation About VerifAvia Overview Team IT capabilities Our strengths

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Our Strengths Flexibility, efficiency and cost-effectiveness

Approved as an aviation verifier in more than 20 European countries ISO14065:2007 accreditation by UKAS Dedicated to the aviation sector Aviation experts with strong experience in Aviation EU ETS Familiarity with

• perational IT

systems for airlines In-house EU ETS data analysis system used for verification EU ETS verification professionally trained auditors Presence in France, UK, Germany and North America Ability to work in English, French, German, Italian and Spanish

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Stefan Trepke

EU ETS Auditor VerifAvia

Office Germany

Phone: +49 178 837 8952 Mail: Stefan.Trepke@VerifAvia.com

www.VerifAvia.com Gary Cleven

EU ETS Auditor VerifAvia

Office North America

Phone: +1 604 733 0406 Mail: Gary.Cleven@VerifAvia.com

www.VerifAvia.com Julien Dufour

Chief Executive Officer EU ETS Auditor VerifAvia

Office France / UK

Phone: +33 665 697 489 Mail: Julien.Dufour@VerifAvia.com

www.VerifAvia.com

Thank You!