Commission Implementing Regulation (EU) 2024/2493 of 23 September 2024 amending Implementing Regulation (EU) 2018/2066 as regards updating the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (1), and in particular Article 14(1) and Article 30f(5) thereof,

Whereas:

(1) Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union (EU ETS) was revised and amended by Directive (EU) 2023/959 of the European Parliament and of the Council (2) to align it with Regulation (EU) 2021/1119 of the European Parliament and of the Council (3) setting a target of at least 55 % net emission reductions by 2030 compared to 1990.

(2) Following the amendment of Directive 2003/87/EC by Directive (EU) 2023/958 of the European Parliament and of the Council (4) and Directive (EU) 2023/959, Commission Implementing Regulation (EU) 2018/2066 (5) should be amended accordingly to incorporate the necessary definitions and detailed arrangements for the monitoring and reporting of emissions from renewable fuels of non-biological origin and recycled carbon fuels and also to ensure proper alignment with sustainability and greenhouse gas savings criteria laid down in Directive (EU) 2018/2001 of the European Parliament and of the Council (6), for the monitoring and reporting of emissions from the transport of CO2 by other means than pipelines for geological storage, emissions from aviation including monitoring and reporting of non-CO2 aviation effects, emissions from the new emission trading system for buildings, road transport and non-ETS industry.

(3) Under the new emission trading system for buildings, road transport and additional sectors, it is necessary, for the definition of a ‘final consumer’ in Article 3(69) to provide for more specific reference to the definition of regulated entity in Article 3(ae) of Directive 2003/87/EC.

(4) Article 5 of Implementing Regulation (EU) 2018/2066 should be amended to reflect that the completeness of monitoring and reporting should cover all process and combustion emissions of the stationary installation, from all emission sources and source streams belonging to activities listed in Annex I to Directive 2003/87/EC and other directly associated activities in line with Article 3(e) of that Directive.

(5) To improve the quality of information on biomass, on renewable fuels of non-biological origin (RFNBOs), on recycled carbon fuels (RCFs), and on synthetic low-carbon fuels and to facilitate national reporting under Regulation (EU) 2018/1999 of the European Parliament and of the Council (7), operators should monitor and report emissions from the non-zero rated and zero-rated carbon fraction of these fuels as memo-items in the emission reports. For that purpose, parameters concerning non-zero-rated and zero-rated biomass, RFNBOs and RCFs, or synthetic low-carbon fuels should be determined and reported for each corresponding source stream under the standard calculation methodology pursuant to Article 24 of Implementing Regulation (EU) 2018/2066 and the mass balance system pursuant to Article 25 of that Regulation. Specific rules are necessary on the determination of composition-related calculation factors concerning non-zero-rated and zero-rated biomass, RFNBOs and RCFs, and synthetic low-carbon fuels, including the zero-rated and non-zero-rated carbon fraction.

(6) To avoid systematic underestimation of the total emissions in the mass balance system when zero-rated carbon is contained in the input and in the output streams, it is important for operators to determine the zero-rated carbon content of the output streams. Clear evidence is required to demonstrate that underestimation has been avoided and that the total mass of the zero-rated carbon fractions in the output materials is equivalent to the total mass of zero-rated carbon fractions contained in the input materials.

(7) Directive 2003/87/EC, as revised by Directive (EU) 2023/959, specifies that the emission factor of biomass is zero if the biomass complies with the sustainability and greenhouse gas emissions savings criteria for the use of biomass fuels established by Directive (EU) 2018/2001, taking into account any necessary adjustments for application under Directive 2003/87/EC, as set out in the implementing acts referred to in Article 14 of that Directive. In order to clarify the conditions under which biomass emissions can be zero-rated and to align with the revised Directive (EU) 2018/2001, Article 38(5) of Implementing Regulation (EU) 2018/2066 should be amended. Where the relevant sustainability and greenhouse gas emissions savings criteria do not apply to a specific type of biomass, that biomass can be zero-rated directly. However, in this case, operators should still demonstrate that the criteria are not applicable. Assessing the proof of applicability and proof of sustainability is an essential part of the verification where the verifier checks the correct application of the monitoring methodology, including the zero-rating of the biomass. Where sustainability and greenhouse gas emissions savings criteria laid down in Article 29(2) to (7) and (10) do apply, compliance with these criteria is required for zero-rating. Biomass that does not comply with the criteria in this case should be treated as a fossil fuel. Zero-rating of emissions under EU ETS is distinct from support schemes defined in Article 2, point (5) of Directive (EU) 2018/2001.

(8) Article 31a of the amended Directive (EU) 2018/2001 of the European Parliament and of the Council (8) sets up a Union database to enable the tracing of liquid and gaseous renewable fuels, recycled carbon fuels and synthetic low-carbon fuels (‘the Union Database’). By 21 November 2024, the Union Database should be fully operational. Where compliance is required with the sustainability and the greenhouse gas emissions saving criteria laid down in Article 29, paragraphs (2) to (7) and (10) of Directive (EU) 2018/2001, for biomass, and Article 29a of that Directive, for liquid and gaseous renewable fuels and RCFs, proof of sustainability should be provided in line with Article 30 and 31 of that Directive. To facilitate this process and to reduce the administrative burden, Member States should be able to rely on the evidence provided by EU ETS operators, aircraft operators and regulated entities from the Union Database on the transactions related to any amount of fuel that has been purchased and used during the reporting year and that has been connected to the cancellation of the respective quantity in the Union database. In the case of subsequent non-compliance regarding the proof of sustainability of the quantities cancelled in the databases, the competent authority shall correct the verified emissions accordingly.

(9) According to Article 33 of Implementing Regulation (EU) 2018/2066, sampling is to be representative for the specific batch and free of bias. Where continuous sampling of the flue gas stream is used, the analysis frequency should be aligned with this process and cover the whole reporting year without interruption.

(10) Directive (EU) 2023/959 has extended the scope of activities listed in Annex I to Directive 2003/87/EC for the refining of any oil, the production of any iron, the production of alumina, the production of hydrogen and the transport of CO2 through means other than pipelines. In order to ensure alignment with Annex I to Directive 2003/87/EC, the Annexes to Implementing Regulation (EU) 2018/2066 need to be updated.

(11) Directive 2003/87/EC recognises the potential role of RCFs and RFNBOs for reducing greenhouse gas emissions in sectors that are hard to decarbonise. To contribute to the decarbonisation, their greenhouse gas emissions savings need to meet the minimum greenhouse gas emissions savings laid out in Article 29a of Directive (EU) 2018/2001 and be calculated according to the methodology set out in the act adopted pursuant to that Article.

(12) RCFs or RFNBOs that contain carbon in their chemical composition, such as e-kerosene or e-methanol, require a carbon feedstock for their production. Until all stages of the life of a product, in which captured carbon is used, are subject to carbon pricing, in particular at the stage of waste incineration, reliance on accounting for emissions at the point of their release from products into the atmosphere would result in emissions being underestimated. Where RFNBOs or RCFs are produced from captured CO2 under an activity covered by Directive 2003/87/EC, the emissions should be accounted for under that activity. In order to avoid double counting and requiring a double payment for the same emissions, the CO2 emissions from RCFs and RFNBOs that comply with the criteria laid out in Directive (EU) 2018/2001 should have an emission factor of zero.

(13) Synthetic low-carbon fuels must comply with the greenhouse gas savings criteria laid down in Article 2 point 13 of Directive (EU) 2024/1788 on common rules for the internal markets in renewable gas and natural gas and in hydrogen. Synthetic low-carbon fuels require carbon feedstock for their production. Subject to review in respect of zero-rated carbon combusted in installations which are exempt from the EU ETS due their high use of biomass pursuant to point 1 of Annex I, to avoid double counting within the EU ETS in accordance with Article 5 of Commission Implementing Regulation (EU) 2018/2066, if the carbon content of the fuels stems from the EU ETS and it has therefore been accounted, including when its emissions factor is zero, the emissions from the synthetic low-carbon fuel should be zero-rated. The emissions resulting from synthetic low-carbon fuels with other carbon content should be treated as their fossil fuel equivalents. It is necessary to provide rules for the determination of the fraction of zero-rated synthetic low-carbon fuels.

(14) RCFs or RFNBOs that do not meet the greenhouse gas emissions savings laid out in Article 29a of Directive (EU) 2018/2001 are considered to lead to insufficient greenhouse gas emissions savings in comparison to fossil fuels. Therefore, the emissions resulting from the combustion of such RCFs or RFNBOs should be treated as their fossil fuel equivalents. As fossil fuels may be blended with RCFs or RFNBOs, it is necessary to provide rules for the determination of the fraction of zero-rated RCF or RFNBO.

(15) Implementing Regulation (EU) 2018/2066 should determine the monitoring methodology that should be applied to emissions from zero-rated RFNBOs, RCFs and synthetic low-carbon fuels. Provisions should be included for the deduction of total zero-rated RFNBO, RCF and synthetic low-carbon fuels emissions, in the case where the operator uses the measurement-based methodology for the determination of total CO2 emissions. When designing support schemes for renewable or low-carbon fuels, Member States retain the right to specify how to incentivise the different RFNBOs, RCFs or synthetic low carbon fuels.

(16) In addition, when applying the measurement-based methodology for biomass-containing fuels and materials, conditions should be added when the biomass fraction equals the zero-rated biomass fraction. Clarifications should also be provided when these conditions are not met and in such case the provisions deployed related to calculation-based approach should be followed by the operator.

(17) When the installation’s proposed methodology involves continuous sampling from the flue gas stream, and at the same time the stationary installation consumes natural gas from the grid, to avoid double counting, the CO2 stemming from biogas should be determined by laboratory analysis and this amount should be respectively deducted from the total zero-rated CO2 previously determined by calculation-based approach.

(18) Directive 2003/87/EC does not recognise negative greenhouse gas emissions. To avoid generating negative emissions, an operator should not subtract from its emissions any CO2 that originates from zero-rated fuels. In the case of the capture of emissions from a mix of zero and non-zero-rated sources, to ensure clarity and simplicity, the quantity of CO2 resulting from non-zero-rated sources that can be deducted from the operator’s emissions should be established based on the proportion of the zero-rated and non-zero-rated emissions.

(19) The activities ‘transport of greenhouse gases for geological storage’, and ‘geological storage of greenhouse gases’, in Annex I to Directive 2003/87/EC, cover all CO2 transported and stored in a storage site permitted under Directive 2009/31/EC, irrespective of the geographical and physical origin of the CO2. In order to avoid any gaps in the monitoring and reporting framework and to provide the incentives for operators of CO2 transport infrastructure or of CO2 storage sites to minimise leaks, it is necessary to clarify that these operators should monitor and report any emissions from all CO2 for geological storage in their custody, including if originating from activities outside of the scope of Directive 2003/87/EC.

(20) As CO2 for geological storage is expected to be transported by a variety of modes, Directive (EU) 2023/959 expanded the scope of the activity ‘transport of greenhouse gases for geological storage’ in Annex I to Directive 2003/87/EC to any transport mode. Therefore, it is necessary to revise the monitoring and reporting provisions related to the CO2 transport activity to ensure that they are applicable to a CO2 transport infrastructure based on any transport modes. Where a transport mode is also covered by another activity under Directive 2003/87/EC, to avoid the double counting of emissions, the emissions covered by the other activity under that Directive should be excluded from the boundaries of the CO2 transport activity.

(21) The transport of CO2 for geological storage may take place over long distances. Therefore, the CO2 may be in transit for lengthy periods. In such cases, it is appropriate to provide the operator of the CO2 transport infrastructure the flexibility to subtract from the emissions to be reported in a given year any amount of CO2 that is still in transit by 31 December of that year, provided that the CO2 shipment reaches its destination and is transferred out to a storage site or to another EU ETS installation no later than 31 January of the following year.

(22) The revised Directive 2003/87/EC amended the definition of emissions to also encompass greenhouse gases that are not directly released into the atmosphere. Therefore, these should also be considered emissions under the EU ETS, unless they are stored in a storage site in accordance with Directive 2009/31/EC or they are permanently chemically bound in a product so that they do not enter the atmosphere under normal use, and do not enter the atmosphere under any normal activity taking place after the end of the life of the product. In consequence, the Annexes to Implementing Regulation (EU) 2018/2066 need to be updated accordingly to account for greenhouse gases released in ways other than directly into the atmosphere, while avoiding the double counting of emissions where greenhouse gases not emitted directly into the atmosphere are re-used within the same installation or in another EU ETS installations. To avoid undue disruptions for installations affected by these changes, their application should be delayed until 1 January 2025 to allow sufficient time for the necessary adaptations.

(23) When determining the oxidation or conversion factor of a source stream, carbon monoxide (CO) emitted to the atmosphere should be considered as the molar equivalent amount of CO2. CO that is otherwise transferred in a product or as a feedstock is not considered as an emission under the scope of Directive 2003/87/EC.

(24) Article 12(3b) of Directive 2003/87/EC provides that allowances do not need to be surrendered for greenhouse gases which are considered to have been captured and utilised in such a way that they have become permanently chemically bound in a product so that they do not enter the atmosphere under normal use, including any normal activity taking place after the end of the life of the product. It is necessary to include a general provision for operators to determine and subtract from their emissions the amount of CO2 considered to be permanently chemically bound in a product listed in the delegated act adopted pursuant to Article 12(3b) of Directive 2003/87/EC, replacing the provision that allowed to subtract the CO2 considered chemically bound in precipitated calcium carbonate.

(25) Having regard to Article 14(5) of Directive 2003/87/EC, the monitoring, reporting and verification framework (MRV) of non-CO2 effects constitutes a stand-alone, distinct exercise from carbon pricing. EU research and innovation activities on the impact and technological solutions of non-CO2 aviation effects are ongoing since 1994 and should continue. Given the uncertainties surrounding the impacts of non-CO2 effects, it is key to start the MRV on non-CO2 effects with a view to ensuring scientific validation of the impacts.

(26) Aircraft operators should monitor the non-CO2 aviation effects occurring from 1 January 2025, from the activities performed by aeroplanes equipped with jet engines, enabling the calculation of a CO2 equivalent (CO2(e)) per flight. The aircraft operators should report those non-CO2 aviation effects once a year. However, to facilitate the start of the MRV for non-CO2 effects, in 2025 and 2026, while the reporting may cover all routes, such reporting shall only be required in respect of routes involving two aerodromes located in the European Economic Area (EEA), and routes from an aerodrome located in the EEA departing to Switzerland or to the United Kingdom. In respect of 2025 and 2026, the reporting of non-CO2 aviation effects taking place from other flights is possible.

(27) In order to minimise administrative burden, aircraft operators should provide a single monitoring plan for CO2 emissions and non-CO2 effects.

(28) The calculation of the CO2(e) per flight should be done using the Global Warming Potential (GWP) metric in three time horizons GWP20, GWP50 and GWP100, to better understand those impacts on climate, applying efficacy, as defined in Implementing Regulation (EU) 2018/2066, and the Commission’s non-CO2 aviation effects tracking system (NEATS), to refine the GWP metric.

(29) In order to calculate CO2(e) for non-CO2 effects, the aircraft operators should use a CO2(e) calculation approach. This approach includes modules for estimating fuel burn and different emissions (NOx, CO, HC), models calculating CO2(e) using the input data and default values as described in Annex IIIa and Annex IIIb to Implementing Regulation (EU) 2018/2066, where data gaps occur.