EuLA (2020) Position Paper on MRR

EuLA Position paper on updated rules on monitoring and reporting (2021-30) under the European Emission Trading System (EU ETS)

Introduction

EuLA welcomes the possibility to comment and voice its concerns regarding the opening of a public consultation of the second revision of the Monitoring and Reporting Regulation (MRR) as announced by the European Commission (EC) on 29th May.

Lime is a hard to abate sector, mainly due to the large amount of process CO2 and the intensity of its energy requirements. Considering that background the MRR revision represents an opportunity to:

  • Help to improve a wider availability of biomass in Europe.
  • Represent a significant trigger to avoid CO2 emission that can be captured in the making of new products where CO2 will be permanently embodied.
  • Provide clarity as per the compliance provisions of sustainability and GHG emissions savings criteria.

EuLA calls for:

1. Recognition of Carbon Capture and Utilisation (CCU) through mineral carbonation as a carbon removal technology.

By doing so, business will be incentivised to close the CO2 loop by optimising mineral carbonation and re-using CO2 in various applications. Mineral carbonation sequestrates CO2 in a permanent, stable form to make sustainable building materials (analogous to geological storage as the CO2 is not released again). It is essential that the role of CCU is correctly recognised, in such a way as to ensure that the integrity of the EU ETS and its fundamental concept of reducing cumulative CO2 by limiting availability of EUAs is maintained. CO2 from an ETS installation which is permanently stored through mineral carbonation shall be recognised as not having been emitted according to ETS and discounted from the installation’s allowance obligations. Thus, if CO2 from an ETS installation is ultimately not released in the atmosphere, that amount should be subtracted from the emissions of the originating ETS installation.

We encourage the EC to consider the proposed list of amendments (in annex) to strengthen the role of mineral carbonation under the MRR.

2. Clarification is required as per the application to industrial installations, other than those producing electricity, heating & cooling and transport, of the criteria provided by Article 29 (2) to (7) and (10) of Directive 2018/2001 associated with annex VI and the exemptions contained in art. 29 (1); including how the percentages set as default values for GHG emissions savings (annex VI of RED II) should be utilised for industrial sectors.

Considering that the criteria of compliance are designed to define requirements for sectors producing power, heating & cooling and the transport sectors; it is not clear if and how these criteria apply for ETS industrial installations. Given the lack of reference to art. 29 (1) of RED II in the MRR revision, it is not clear whether the exemption contained in that paragraph applies. The same goes for the criteria contained in art. 29 (10). Consequently, a robust cross check and guidance for ‘fit for purpose’ are required.

If these criteria were to apply to our sector, for the default values for industrial installations other than those producing power, heat, cooling and transport, should they refer to the “Heat” column of Annex VI RED II, by analogy?

What about industrial installations using solid biomass before 1st January 2021? What is the percentage of reference? If any, could these installations be considered as fulfilling the GHG savings criteria?

Could the commission confirm that for the purpose of applying the MRR, MS cannot establish additional sustainability criteria for biomass fuels?

Could the Commission specify if olive seeds, or olive pits are to be considered agricultural residues or residues from related industries and processing as this type of biomass is not directly generated by the “farmer” but by the installation processing the olive oil or the production of ethanol of grape seed oil?

3. Consistent application of the rules as per the sustainability and GHG emissions savings criteria during the entire phase IV.

EuLA is concerned about the discrepancy of rules applied between the emissions from solid biomass for setting the benchmark 2021-2025 (all type of biomass = zero) and the emissions reporting rules for the reporting period starting 2022 (in a very restrictive interpretation, see under heading 2) only sustainable and GHG savings solid biomass = zero). It seems logical that the criteria should apply in such a way that the biomass having determined the benchmark should keep the same status in the relevant reporting periods.

EC should consider the potential impact on the benchmark update of setting different conditions for biomass across sub-periods and establish harmonised, comprehensive, and unambiguous criteria. This will provide certainty and predictability to concerned sectors allowing them to better assess the potential consequences and anticipate accordingly.

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