Climate Change Programme

Climate Change Programme

As part of the European Union’s response to the climate change issue, thousands of installations across the EU states will need to have their greenhouse gas (GHG) emissions verified from 2005 onwards. The EU Emission Trading Scheme will be mandatory and will initially cover CO₂ only, but in 2008 it will be extended to all six “Kyoto GHGs[1]”. In the meantime, SGS has been developing its emission verification services in the UK Emission Trading Scheme, which can be viewed as a trial run for the larger EU programme.

The CCP provides two core services:

1. Validation of Project Design specifically aimed at project-based activities such as those developed under the Clean Development Mechanism of the Kyoto Protocol.
2. Verification of Emission and Emission Reductions: applicable to projects, facilities, legal entities, and multi-national corporations to facilitate reporting of information into all forms of GHG emission registries. Several active registries are already in existence, and many more are being planned.

SGS’s services include both detailed individual verification engagements for large or “complex” facilities, and specially-designed “Group Verification” engagements for groups of small or “simple” facilities.

Under the individual approach, teams of experts visit the site and implement a two stage process:

1. Strategic Review and Risk Assessment to understand the activities on sites, sources of GHGs, their relative magnitude, and the means of collecting and handling the data used to calculate or measure the emissions. With this data, the team defines a risk-based verification protocol describing what needs to be verified and how it will be verified.
2. Verification Assessment, whereby the team actually implements the verification protocol and formulates a conclusion regarding the total number of GHG emissions.

In the Group verification engagement, the two-stage process is modified to encompass the collection and screening of data from a large number of participants. Data from each site is carefully checked but only a limited number of sites are visited. This results in significant cost savings, although Group participants forego the benefits of an individual assessment (detailed review of measurement and monitoring procedures, identification of opportunities to improve accuracy and reporting procedures, control of the flow of work etc.).

The outcome of a successful engagement is an Unqualified Verification Opinion, which states the number of emissions from a defined scope of activities during a defined period, with reference to defined measurement and reporting protocols. The opinion is an affirmative and unequivocal statement confirming that the emissions are considered to be free of material error or omission. An Unqualified Opinion is designed for submission to a voluntary or mandatory registry and for use by Government Regulators, the Chief Financial Officer, Financial Accountants and stakeholders.

In view of the value at stake for most companies, it is essential that the Verification Opinion be given with a high level of assurance and be backed up by objective evidence, professional judgment and independent technical review.

[1] CO₂, CH₄, N₂O, SF₆, HFCs and PFCs