12 big Moldovan companies will report greenhouse gas emissions

The European Emissions Trading System (EU ETS) will be partially transposed into Moldovan law, with the support of the EU and UNDP. In the first stage, monitoring, reporting and independent verification (MRV) of greenhouse gas emissions (GHG) obligations will be introduced for 12 companies with a total nominal installed generation capacity of almost 3.3 thousand MW. These include companies in the energy sector, such as Termoelectrica and CET-Nord, but also in the industrial sector, such as the confectionery manufacturer Bucuria SA, Suedzucker Moldova JSC, Lafarge Ciment Moldova JSC, the Macon brick factory, the Sigiliu Lux porcelain factory and Glass Container Company and Glass Container Prim glass factories.

The EU4Climate project, funded by the European Union and implemented by UNDP, has provided support to the Ministry of Environment to identify companies that will apply the new regulations, developed under the ETS Directive. The regulation on MRV of GHG emissions from stationary installations was also drafted, as well as amendments to the Law on Environmental Protection, which was supplemented with a chapter on climate change. The amendments will regulate the management of greenhouse gas emissions and the issuance of GHG emission certificates for economic operators. At the same time, the analysis of the regulatory impact on the introduction of the system for monitoring, reporting and verifying GHG emissions at stationary installations was performed.

The documents were presented on 16 December 2021 at a consultative workshop attended by public and private sector stakeholders.

ETS is the latest Directive in the “Climate Policy” chapter of the Republic of Moldova-European Union Association Agreement, to be transposed and approved at national level. To date, the Gasoline and Diesel Quality Directive, the Ozone-Depleting Substances Regulation and the Greenhouse Fluorinated Gas Regulation have been transposed.

With a total budget of 8.8 million euros, the EU4Climate project runs from 2019-2022 and has the following components: (i) updating the Nationally Determined Contributions to the Paris Agreement; (ii) developing low-emission national development strategies by 2050; (iii) introducing and strengthening the framework for monitoring, reporting and verifying greenhouse gas emissions; (iv) alignment with the acquis communautaire in the field of climate; (v) integrating the climate dimension into sectoral policy documents, raising awareness and developing sectoral guidelines for the implementation of the Paris Agreement; (vi) attracting investment in climate change; (vii) better climate change adaptation planning.

Background information:

The EU GHG Emissions Trading Scheme (EU ETS) is the EU’s main policy instrument on combating climate change, and is also the world’s largest system for capping and trading greenhouse gas emissions. For the total emissions generated by the high emission industrial sectors a limit, or ceiling, has been introduced, which is reduced in time. The ceiling restricts the emissions of more than 10,000 large energy-intensive installations across the EU (in the energy sector, manufacturing, and airlines), covering about half of the EU’s internal GHG emissions.

Thus, every installation that falls under the EU ETS Directive receives emission certificates, which is the right to emit one tone of carbon dioxide (CO₂) equivalent. If the installation emits more CO_2eq than the assigned certificates, it can buy emission certificates at auctions to cover the excess emissions. If the installation emits less CO_2eq than the one set out in the assigned certificates, it may sell the certificates. The auctioning of allowances takes place on the joint auction platform, the European Energy Exchange (EEX) in Leipzig. Each year, installations must return to the European Commission a number of certificates equal to the amount of emitted carbon dioxide equivalent (CO2_eq).

This innovative scheme, introduced in 2005, aims not only to reduce emissions under the limit, but also to set a carbon price and ensure a financial value for every tone of CO2_eq saved. This encourages installations to implement the most cost-effective measures to reduce emissions and stimulates investment in low-carbon technologies, especially if certificate prices are high. The price, set by the emissions certificate market, reached 85 Euro/tone of CO₂ at the auctions on 13 December this year.