Reporting Regulation – Greenhouse Gas Reduction
(Cap and Trade) Act
Reporting Regulation | Reporting Operations | Verification | Questions & Answers | Regulatory Amendments | One-Window Reporting | Guidance | Amended Quantification Methods | Natural Gas Carbon Content for WCI.040 | 2010 Facility Emissions Reports
Verification
*Please note that the Ministry has now posted Guidance on Verification under the Reporting Regulation. The new Verification Guidance Document is intended to replace the previous Verification Manual. Please refer to the new document in place of the Verification Manual as it is much more comprehensive. Please note that the Ministry will not require verification bodies to submit a notice of verification services to the Ministry for 2010 calendar year emissions report verification.
Introduction
The Reporting Regulation under the Greenhouse Gas Reduction (Cap and Trade) Act sets out the requirements for B.C. facilities with greenhouse gas emissions to report these emissions to the British Columbia Ministry of Environment. See the links to associated Ministry of Environment websites for general information about the Reporting Regulation and information for reporting facilities.
Provisions for third party verification in the Reporting Regulation are intended to ensure that emissions data and reports are accurate, consistent and compatible – and in accordance with B.C. and international standards. Verification is in essence a detailed compliance assessment of the emissions report, with an approach and rigour similar to a financial audit.
Transparent and credible verification is an essential support to a cap and trade system, where emissions are linked to a monetary value. For a cap and trade system the actual quantity of emissions is important, not simply whether the emissions are below an authorized limit (as for traditional environmental reporting). Third party verification helps provide confidence in the accuracy and consistency of reported emissions data.
This section of the website describes the requirements set out in the Reporting Regulation for third party verification of emissions reports. The application of the requirements is outlined, key dates for 2010 and later years are provided, and key elements specific to verification under the Reporting Regulation, such as level of assurance and accreditation requirements, are highlighted. Verification Bodies and reporting operations with verification obligations should also refer to the Guidance on Verification under the Reporting Regulation, which supplements the verification requirements set out in the Reporting Regulation with additional detail.
The Ministry has released preliminary guidance to ensure the efficient verification of linear facilities operations under Linear Facilities Verification Considerations below.
Further information
If you have any questions regarding verification requirements in the Reporting Regulation please contact the Ministry of Environment at: dennis.paradine@gov.bc.ca
Links to External Resources
- The Western Climate Initiative (WCI) “Draft Essential Requirements for Mandatory Reporting” documents include additional information about the context for verification. These drafts are available through the Reporting Committee’s WCI Document Library
- The Climate Registry - While TCR’s verification and accreditation program is not identical to B.C.’s, their website provides useful information including “Tips for an Easier Verification". Also provided is a Guide to Understanding Factors that Affect Verification Costs. The cost of verification is difficult to estimate since it depends on facility-specific factors. TCR’s guide can be used by a facility to understand which factors may affect their costs for verification, and to identify means of mitigating these costs. However, facilities should remember that certain factors discussed in the guide are specific to TCR’s reporting program, such as “Number of Emission Years for Simultaneous Verification” and “Reporting Tiers”.
- Standards Council of Canada (SCC)’s GHG Accreditation Program
- American National Standards Institute (ANSI)’s Accreditation Program for Greenhouse Gas Validation/Verification Bodies
- ISO 14064-3 “Specification with guidance for the validation and verification of greenhouse gas assertions”
- ISO 14065 “Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition”
Applicability
Under the Reporting Regulation facilities emitting 25,000 tonnes or more of carbon dioxide equivalent (CO2e) per year (exclusive of CO2 from biomass listed in Schedule C) are subject to specific verification requirements.
Beginning with calendar year 2010 emissions, facilities with a verification obligation are required to include a verification statement prepared by an accredited third party verification body with their emissions report submitted to the ministry. For 2010 emissions, an emissions report is required by March 31, 2011 and a supplementary emissions report that includes a verification statement is required by September 1, 2011. The same requirements and timeframe will hold for reporting of 2011 emissions (report before March 31, 2012 and verification statement by September 1, 2012). For emissions in the calendar year 2012 and beyond, the verification statement must be included as part of the emissions report (by March 31 of the year following the emissions). See Section 20 of the regulation.
Operators or owners of facilities are required to submit verification statements to the ministry so long as emissions are 25,000 tonnes or greater per calendar year. If emissions (calculated in accordance with provisions in the Reporting Regulation) fall below 25,000 tonnes in a year, emissions reports must still be verified and a verification statement submitted to the ministry for at least the three subsequent years. If reported and verified emissions are below 25,000 tonnes CO2e/year for each of these years (i.e., three consecutive reporting periods) then a verification statement is no longer required (until such time as emissions again rise above the verification threshold). See Section 19 of the Reporting Regulation.
A verification statement is also required for a supplementary report (other than those submitted to meet the September 1, 2011 and 2012 deadlines) under certain circumstances. For specific requirements see Section 21 of the Reporting Regulation.
Key Verification Dates
| DATE |
Considerations Regarding Verification for Reporting Operations |
| 2010 |
| January 1 |
Estimate expected facility emissions for 2010 – if close to or above 25,000 tonnes CO2e anticipate verification needs:
- ensure appropriate monitoring, data collection and quantification methods are in place and understood;
- establish strong data and records management, enabling audit trails;
- begin to screen and engage an accredited verification body.
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2011
|
| January 1 |
Begin compiling 2010 emissions data and documentation for preparation of emissions report and review by verification body.
(2011 emissions: Continue data collection and records management) |
| January-February |
Engage verification body to verify 2010 emissions report, and to prepare verification statement.
Note: A verification body could be engaged during the fourth quarter of 2010 to complete certain tasks such as site visits before the end of 2010. |
| March 31 |
Submit first emissions report to Ministry of Environment by this date for 2010 emissions – a verification statement is not required at this time. |
| September 1 |
Submit supplementary emissions report that includes a verification statement for 2010 emissions to Ministry of Environment by this date. |
2012
|
| January 1 |
Begin compiling 2011 emissions data and documentation for preparation of emissions report and review by verification body.
(2012 emissions: Continue data collection and records management) |
| March 31 |
Submit 2011 emissions report to Ministry of Environment by this date – a verification statement is not required at this time. |
| September 1 |
Submit supplementary emissions report that includes a verification statement for 2011 emissions to Ministry of Environment by this date. |
2013
|
| January 1 |
Begin compiling 2012 emissions data and documentation for preparation of emissions report and review by verification body.
(2013 emissions: Continue data collection and records management) |
| March 31 |
Submit 2012 emissions report with verification statement to Ministry of Environment by this date. |
| 2014 and Beyond |
| March 31, 2014 and following years |
Emissions reports with verification statements for the previous year’s emissions will continue to be required before this date each year – unless annual emissions fall below 25,000 tonnes CO2e and remain below that level for at least three reporting periods, in which case a verification statement is no longer required, until emissions again exceed the verification threshold. |
Key Elements of Verification in B.C.
| Element |
Description or Definition |
| Verification statement |
A written declaration by a verification body that attests to the veracity of an operator’s emissions report and whether the emissions report conforms to the requirements of the Reporting Regulation. Any verification statement submitted to the ministry must be signed by the lead verifier responsible for the verification services and by an independent peer reviewer that was not involved in the verification services named in the verification statement [Sections 24 and 26]. |
| Reasonable level of assurance |
Verification procedures used in the verification process need to be applied in a manner that provides a “reasonable level of assurance” [Section 23(e)].
The verification body communicates through the verification statement that a reasonable level of assurance is being provided. |
| Materiality threshold of 5% |
The verification body must attest that the assertions in the emissions report (that is being verified) are “materially correct” and are a fair and accurate representation of the reporting operation’s GHG emissions for the reporting period, and that the report was prepared in accordance with the Reporting Regulation [Section 24].
“Materially correct” refers to the materiality threshold of 5%, and whether the individual or aggregate effects of an error would influence a person’s opinion of the reported emissions [Section 25]. |
| Verification process
|
Verification must be conducted in accordance with ISO 14064-3 (available for purchase via the Standards Council of Canada) [Section 23(1)].
Also, the verification process (or “verification”) must include a review of relevant records, a risk assessment, a verification plan (including a sampling plan), at least one site visit, an evaluation of the emissions quantification and report with the Reporting Regulation requirements and an assessment of the sources and magnitude of potential errors [Section 23(2)]. |
| Verification body and accreditation |
The regulation requires a verification body to be accredited by a member of the International Accreditation Forum (IAF) in accordance with ISO 14065 through a program developed under ISO 17011 (both standards available for purchase via the Standards Council of Canada) [Section 18].
The Standards Council of Canada (SCC) and the American National Standards Institute (ANSI) both run GHG accreditation programs. Verification bodies with obligations under the Reporting Regulation intending to provide verification services to reporting operations in B.C. should consider accreditation from the SCC – in terms of cost-effectiveness and body of experience.
For verifications that are completed prior to December 31, 2012, verification bodies may be accredited by the California Air Resources Board under specified regulations [Section 18].
Envisioning a team approach to GHG verification, the ISO 14065 standard is designed for the accreditation of firms or business entities that intend to act as verification bodies. The Reporting Regulation requires accreditation of verification bodies but does not require certification of individual verifiers employed by a verification body.
Reporting operations can find listings of accredited verification bodies (with contact details) through the following links:
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| Threat to independence or Conflict of Interest (COI) |
The verification body (including members of the verification team) must demonstrate that the potential for a threat to independence that could influence the objectivity of the verification is insignificant [Section 22]. To support this, a verification statement must include a conflict of interest report [Section 26].
One of the advantages of a third party providing verification is that they are independent of both the reporting operation and government. A third party can therefore conduct verification impartially. Experience from other programs shows that conflict of interest provisions are crucial to a successful verification program that meets the ISO 14064-3 principle of independence. |
| Verification outcome |
In general, a verification statement may be positive and unqualified, positive but qualified or adverse. A “positive” verification statement indicates that a verification body agrees with the emissions report while an “adverse” verification statement indicates that they do not.
The Reporting Regulation obliges reporting operations to monitor and quantify their emissions, maintain their records and prepare their emissions report such that a verification body can provide, with reasonable assurance, a positive and unqualified verification statement [Section 24].
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Considerations for verification of a linear facilities operation
With respect to linear facilities operations, the configuration and nature of emissions sources and data management may remove the need for a site visit to each individual emission source. For example, situations in which a site visit to emissions sources may not be required include:
- Where there is an un-manned site with telemetered data sent to another location; and the same person is responsible for all the data management and recording for the linear facilities operation.
- The site is in a remote or inaccessible location and there is high centralization of the data collated from the site at another location with good quality assurance.
- Meters or other equipment have already been inspected (by Reporting Operation personnel or a third party) on site and a signed document and/or photographic evidence from the operator demonstrates that no metering or operational changes have occurred at the installation for the reporting time period.
- The site is similar in design, operation and function to other sites that compose the linear facilities operation, and the site is managed by the same Reporting Operation personnel.
As part of verification at linear facilities operations, the verification body must at a minimum visit each individual facility where emissions exceed 25,000 tonnes CO2e. The verification body must visit an appropriate sample of individual facilities with emissions between 10,000 and 25,000 tonnes CO2e, and a second smaller sample of individual facilities with emissions less than 10,000 tonnes CO2e, according to the considerations noted above. In determining the number of sites to visit for a linear facilities operation, a verification body shall undertake a risk based assessment and consideration of whether any changes on site have occurred in the given reporting period. In every case, verifiers shall include an onsite visit of the head office, regional office or other location of central data management, if different from the facility.
The accreditation requirements for verification bodies appear to be different for the Emission Offsets Regulation and the Reporting Regulation. Is this the case, and if so, why?
The accreditation requirements for assurance providers under the Emission Offsets Regulation and the Reporting Regulation are not identical. A detailed explanation of the requirements and rationale is provided below: |
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Reporting Regulation under the Greenhouse Gas Reduction (Cap and Trade) Act
The Reporting Regulation continues to require a verification body to be accredited by a member of the International Accreditation Forum (IAF) in accordance with ISO 14065 through a program developed under ISO 17011. Standards Council of Canada (SCC) and the American National Standards Institute (ANSI) are members of the IAF and run such programs. For verifications that are completed prior to December 31, 2012, verification bodies may be accredited by the California Air Resources Board under specified California regulations.
The Reporting Regulation requires that verification bodies have their accreditation in place to provide services under the regulation. However, it does not stipulate that the accreditation is specific to the industry sectoral scope. Nevertheless, verification activities must be conducted in accordance with ISO 14064-3, which indicates that verifiers must demonstrate necessary relevant competence. The preference of the ministry is that accredited verification bodies providing verification services within sectoral scopes for which they have not yet received accreditation conduct verifications as part of a scope extension witness assessment.The Reporting Regulation continues to require a verification body to be accredited by a member of the International Accreditation Forum (IAF) in accordance with ISO 14065 through a program developed under ISO 17011. Standards Council of Canada (SCC) and the American National Standards Institute (ANSI) are members of the IAF and run such programs. For verifications that are completed prior to December 31, 2012, verification bodies may be accredited by the California Air Resources Board under specified California regulations.
The Reporting Regulation requires that verification bodies have their accreditation in place to provide services under the regulation. However, it does not stipulate that the accreditation is specific to the industry sectoral scope. Nevertheless, verification activities must be conducted in accordance with ISO 14064-3, which indicates that verifiers must demonstrate necessary relevant competence. The preference of the ministry is that accredited verification bodies providing verification services within sectoral scopes for which they have not yet received accreditation conduct verifications as part of a scope extension witness assessment
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Emission Offsets Regulation under the Greenhouse Gas Reduction Targets Act
The Emission Offsets Regulation amendment, which came into force on December 6, 2010, requires that the body be accredited (or enrolled in a program for accreditation) in the sectoral scope of the project by a member of the International Accreditation Forum (IAF) in accordance with ISO 14065 through a program developed under ISO 17011. An enrolled validation or verification body may conduct work for a maximum period of one year from the date of their earliest signed assurance statement in a given sectoral scope. Following this period the body will require full accreditation to conduct assurance work in that sectoral scope. The Director maintains an ability to make determinations regarding the qualifications and quality of work of an enrolled validation body or verification body.The Emission Offsets Regulation amendment, which came into force on December 6, 2010, requires that the body be accredited (or enrolled in a program for accreditation) in the sectoral scope of the project by a member of the International Accreditation Forum (IAF) in accordance with ISO 14065 through a program developed under ISO 17011. An enrolled validation or verification body may conduct work for a maximum period of one year from the date of their earliest signed assurance statement in a given sectoral scope. Following this period the body will require full accreditation to conduct assurance work in that sectoral scope. The Director maintains an ability to make determinations regarding the qualifications and quality of work of an enrolled validation body or verification body.
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Rationale
Providing assurance services for reported facility emissions is considered a separate activity from providing assurance services for an offsets project, and oversight of these activities falls under different provincial legislation. SCC and ANSI confer separate accreditations for verification of GHG inventories, verification of GHG projects, and validation of GHG projects.
The market for emissions report verification is sizable and known (BC has at least 75 single site and linear facilities operations requiring annual verification), while the demand for offset project validation and verification is not as well defined. Given that the Reporting Regulation allows verification bodies accredited by the California program and does not place limits on sectoral scope accreditation, the Ministry expects there to be a sufficient capacity of verification bodies to provide services under the Reporting Regulation
.Providing assurance services for reported facility emissions is considered a separate activity from providing assurance services for an offsets project, and oversight of these activities falls under different provincial legislation. SCC and ANSI confer separate accreditations for verification of GHG inventories, verification of GHG projects, and validation of GHG projects.
The market for emissions report verification is sizable and known (BC has at least 75 single site and linear facilities operations requiring annual verification), while the demand for offset project validation and verification is not as well defined. Given that the Reporting Regulation allows verification bodies accredited by the California program and does not place limits on sectoral scope accreditation, the Ministry expects there to be a sufficient capacity of verification bodies to provide services under the Reporting Regulation.
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