The guidelines follow the publication of a framework for the trading scheme in August (ENDS Report 319, pp 16-20 ). Detailed rules will follow later this year before an auction of emission allowances to so-called direct participants (DPs) is held next January. It is to DPs that the guidelines apply.
The guidelines come together with three protocols for estimating carbon dioxide emissions from fuel combustion, and a further seven for CO2 emissions from industrial processes - cement, lime, soda ash, ammonia and metal production, incineration of municipal waste and sewage sludge, and limestone and dolomite use.
As announced in the framework document, it will be for industry to come forward with proposals for further protocols for process emissions of non-CO2 gases. These will need approval from DEFRA by the end of the year for the gases to be entered into the trading scheme.
The guidelines make it clear that businesses putting forward a proposed protocol will need to submit an estimate of the "inherent uncertainty" within it. The proposal will not be approved if DEFRA considers it likely to "compromise the environmental integrity" of the scheme. A less severe option will be to require reported emissions to be adjusted to take into account the protocol's inherent uncertainty.
The paper adds that DEFRA is commissioning a study of the uncertainty associated with the ten protocols it has itself devised. The conclusions will guide it in deciding on the level of uncertainty which will be acceptable in other protocols.
The guidelines set out five key principles which DPs will need to follow in measuring and reporting their baseline and annual emissions. They are "faithful representation", completeness, consistency, reliability and transparency. Verifiers will be expected to check whether DPs have observed these principles.
The guidelines suggest that DPs will find it easier to demonstrate adherence to the five principles if they have a recognised environmental management system, such as those involved in certification to the ISO14001 or EMAS standards. But in any event, effective data management systems will be essential.
The guidelines add a few details on establishing baseline emissions to those in the framework document. One important clarification is that the only aviation emissions which will qualify for the trading scheme are those from domestic flights. There is also additional advice on the treatment of heat or electricity exports from a site, how far aggregation of emissions can be carried out to constitute a "source", and on the scope for using only one or two years' emission data to form the baseline emissions for individual sources instead of the full three years.