< Previous 3-58 Environmental Technical Manual should be able to provide procedural instructions on how flight service types (e.g., medical) are being attributed to specific flights. The verification body has to check whether these procedures and the corresponding understanding is in accordance with the requirements of Annex 16, Volume IV. In very rare cases there might be the need to define additional flight service types. Interviews in the control centre of the aeroplane operator might support to gain sufficient evidence that staff applies flight service types correctly. 3.3.5.4.2 Detailed assessment of Fuel Use Monitoring Methods (as described in Annex 16, Volume IV, Appendix 2) applied by the aeroplane operator Given the ability to choose from different Fuel Use Monitoring Methods as described in Annex 16, Volume IV, Appendix 2, the verification body should not only ensure the correct application of the method(s) but also verify that the chosen approach is appropriate in terms of data availability and robustness given the unique operating environment of the specific aeroplane operator. In this regard the verification body can, if deemed useful and if data is sufficiently available, use other Fuel Use Monitoring Methods as described in Annex 16, Volume IV, Appendix 2 to cross-check whether the reported emissions are reasonable. Some additional CORSIA and aviation specific details are given underneath. General a) The verification body has to evaluate whether the aeroplane operator applies the Fuel Use Monitoring Method(s) correctly throughout the entire fleet and different aeroplane types, as specified in the Emissions Monitoring Plan. This also includes whether ACARS triggers used for the CORSIA are identically set on different aeroplane types (if applicable and if not specified differently in the Emissions Monitoring Plan). This also has to be evaluated for leased aeroplanes (e.g. wet leasing, short-time arrangements); b) Annex 16, Volume IV, Appendix 2 does contain specific limitations on what can be defined as block-off and block-on values under the CORSIA. It is the responsibility of the verification body to assess whether the actual measurement points are within the applicable definitions; c) Different systems of the aeroplane operator might contain different values regarding the block-off and block-on fuel, fuel uplift, block hours, and density values for precisely the same flight. It is the responsibility of the verification body to determine the actual value which is closest to the true value; d) IT systems might include provisions for rounding when processing data into the next application (e.g. emissions module). It is the responsibility of the verification body to determine the impact of this rounding; e) The verification body should check whether the block hour calculation follows the definitions as outlined in Annex 16, Volume IV, Appendix 2, especially with regard to the definitions of block-off and block-on; and f) The verification body should make use of other potential data sources to cross-check the general plausibility of the total fuel consumption determined by the application of a Fuel Use Monitoring Method. This could include cross-checking the total fuel consumption as purchased from financial accounting systems versus total fuel consumption as recorded from flight operations systems. Volume IV. Procedures for demonstrating compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Chapter 3 3-59 Method A and Method B a) Due to the complexity of this Fuel Use Monitoring Method, the verification body should assess in detail whether the aeroplane operator has indeed applied the method correctly. This especially refers to Method A as the value ‘fuel in tanks once fuel uplift is completed’ is a rather unusual data point in aeroplane operations which should not be mistaken with the far more common block-off fuel. b) Due to the high number of data points per flight required to calculate the fuel consumption, these fuel monitoring methods are rather error prone. c) The verification body should evaluate whether the actual quality of data, data flows and processes of the aeroplane operator indeed allow for the application of this Fuel Use Monitoring Method. d) Potential results of the above assessment should be reflected in the risk analysis. Block-off / Block-on a) This Fuel Use Monitoring Method does include data points which are commonly used in aeroplane operations. Fuel Uplift a) The verification body should give special attention to the actual data source used to determine the fuel uplift. Different options (e.g., fuel slip vs. fuel uplift) may be available. b) The verification body should make use of accounting information. c) The verification body should evaluate if the distribution of fuel uplifts in case of flights without fuel uplift is applied in accordance with Annex 16, Volume IV, Appendix 2, 2.5. Fuel Allocation with Block Hour a) The average fuel burn ratio (AFBR) is critical for the determination of the total fuel consumption (small deviation has a large impact on the total emissions). Therefore, it is essential that the verification body thoroughly checks the correct determination of the AFBR. This includes the assessment whether the AFBRs have been indeed determined by using actual data from the current reporting year. b) The verification body might use the Fuel Uplift monitoring method to cross check calculation results as this fuel monitoring method is implicitly included in the fuel allocation with Block Hour method. 3.3.5.4.3 Detailed assessment of fuel monitoring methods applied by the aeroplane operator (ICAO CORSIA CERT) Annex 16, Volume IV, Appendices 2 and 3 provide Fuel Use Monitoring Methods and CO2 Estimation methods (implemented in the ICAO CORSIA CERT), respectively. Fuel Use Monitoring Methods as described in Annex 16, Volume IV, Appendix 2 must be used by aeroplane operators that have annual CO2 emissions equal to or greater than the specified threshold for the 2019-2020 period and for the 2021-2035 periods. Aeroplane operators whose annual CO2 emissions fall under this same threshold have the option of using the ICAO CORSIA CERT. Annex 16, Volume IV, Part II, Chapter 2, 2.2.1 also specifies the procedures that the aeroplane operator must follow when the threshold is crossed 3-60 Environmental Technical Manual in any one year. For this reason, a key verification activity involves confirming that the aeroplane operator continues to be eligible for the monitoring method it is using, as approved in its Emissions Monitoring Plan. If the aeroplane operator crosses the thresholds for eligible monitoring methods, the verification body must check that the aeroplane operator continues to be in compliance with the requirements related to changing monitoring methods, as specified in Annex 16, Volume IV, Part II, Chapter 2, 2.2.1. Additional guidance relating to the thresholds as specified in Annex 16, Volume IV, Part II, Chapter 2, 2.2.1 and its interpretation is provided in section 3.1. If the verification body finds that an aeroplane operator using the ICAO CORSIA CERT was not eligible to use the tool in accordance with Annex 16, Volume IV and the approved Emissions Monitoring Plan, it should immediately halt the verification and advise the aeroplane operator to contact the State for further guidance. The verification body should first check the aeroplane operator’s eligibility to use the ICAO CORSIA CERT i.e., for the 2019-2020 period, that its annual CO2 emissions from international flights, as defined in Annex 16, Volume IV, Part II, Chapter 1, 1.1.2 and Chapter 2, 2.1, are less than 500 000 tonnes; and for the 2021-2035 period, that its annual CO2 emissions from international flights subject to offsetting requirements, as defined in Annex 16, Volume IV, Part II, Chapter 1, 1.1.2, and Chapter 3, 3.1, are less than 50 000 tonnes. For aeroplane operators using the ICAO CORSIA CERT, the verification body should evaluate the correct application of the ICAO CORSIA CERT to estimate emissions (e.g. by carrying out interviews with responsible staff of the aeroplane operator). 3.3.5.4.4 Checking fuel density If the fuel in tanks and fuel uplift is measured in volumes, the aeroplane operator has to use a fuel density value (actual or standard) to convert these volumes to mass. Within the CORSIA, every measurement of fuel in tanks performed by the aeroplane operator to determine the mass of fuel does not need special attention by the verification body as it is assumed that such safety critical (maintenance) aspects have been sufficiently addressed by the responsible national aviation authority. Consequently, the verification body should focus its activities on verifying the CORSIA density requirements regarding fuel uplift, as described in Annex 16, Volume IV, Part II, Chapter 2, 2.2.3 and specified in the aeroplane operator’s Emissions Monitoring Plans, have been correctly applied according to the aeroplane operator’s standard operating fuel data management procedures regarding density. The verification body will check whether the same fuel density values used for actual aeroplane operations are being applied in determining fuel mass for reporting purposes under Annex 16, Volume IV. 3.3.5.4.5 Assessing handling of data gaps for aeroplane operator using Fuel Use Monitoring Methods as described in Annex 16, Volume IV, Appendix 2 If relevant data for the calculation of the aeroplane operator’s emissions for one or more flights are missing or unreasonable, the aeroplane operator must use secondary data as described in the approved Emissions Monitoring Plan (e.g. data from paper records instead of automatically transmitted ACARS data items) to close the data gaps. If this should not be possible, the aeroplane operator will estimate the emissions according to the approved ICAO CORSIA CERT as described in Annex 16, Volume IV, Appendix 3. The verification body has to check whether the procedures described in the Emissions Monitoring Plan are sufficiently established at the aeroplane operator to allow the use of secondary data, whether the ICAO CORSIA CERT has been applied correctly, and whether the total amount of estimated data gaps exceeds the applicable threshold of 5 per cent, as described in Annex 16, Volume IV, Part II, Chapter 2, 2.5. In such cases the verification body has to evaluate whether the given explanations of the aeroplane operator in the Emissions Report are detailed enough to allow an assessment by the State on whether the data gaps were inevitable from a technical or commercial point of view, and what activity may have been initiated to reduce the number of data gaps below 5 per cent in future Emissions Reports. The provided details should also serve as a basis for the State to assess whether the Emissions Monitoring Plan of the aeroplane operator will need to be updated. A specific data gap occurring several times over a longer period of time may also show that the control activities of the aeroplane operator are not functioning correctly. The verification body has to therefore assess the frequency of specific Volume IV. Procedures for demonstrating compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Chapter 3 3-61 data gaps and the effectiveness of control activities implemented to avoid these data gaps. The verification body needs to assess whether the control activities are effective (e.g., whether IT systems, automatically transferring data, are secure and functioning properly, or whether the aeroplane operator has built in manual controls to ensure that no data gaps occur). 3.3.5.5 Use of CORSIA eligible fuels In accordance with Annex 16, Volume IV, Part II, Chapter 3, 3.3, aeroplane operators may claim emissions reductions from the use of CORSIA eligible fuels that meet the CORSIA Sustainability Criteria as defined within the ICAO Document entitled “CORSIA Sustainability Criteria for CORSIA eligible Fuels” that is available on the ICAO CORSIA website. These CORSIA eligible fuels can be produced and uplifted anywhere in the world. However, to be eligible for recognition under the scheme, the total volume of CORSIA eligible fuel purchased must satisfy reporting requirements, in accordance with Annex 16, Volume IV, Part II, Chapter 2 and Annex 16, Volume IV, Appendix 5. In general, verification bodies are not expected to audit the CORSIA eligible fuel producers directly. Focus should be on confirming that the sustainability documentation provided by the fuel producers through the aeroplane operator is reliable and from CORSIA approved Sustainability Certification Schemes, and that the reported batch volumes/mass are reasonable and align with Certificates of Analysis and other supporting internal and external documentation (e.g., invoices, delivery documentation). A verification body should assess aeroplane operator controls ensuring that the fuel they are purchasing meets CORSIA sustainability criteria. Any concerns with the sustainability certification or amount of fuel purchased should be flagged to the aeroplane operator, whom should request the producer to allow access to additional records for the purpose of the verification (right to audit provision). In most cases this will only involve the exchange of additional information such as certification report or internal audit documents. An on-site visit by a verification body would only be expected in extremely rare cases where the CORSIA eligible fuel claim is large but the gathered evidence very limited. Although the aeroplane operator and verification body should have access rights to this information, auditing of fuel producers should only be conducted on an “as needed” basis and should not be considered a regular activity within the verification. The assessment of verification risk should focus primarily on the risk associated with any gaps between the underlying sustainability certification scope and the required scope to gather sufficient evidence for the accounting for an emissions reductions claim within the CORSIA. This includes: a) The assessment of potential risks due to the potentially limited certification scopes of CORSIA eligible fuels used, which result in procedures outside the responsibility of the aeroplane operator that are not subject to a third party oversight and analysis whether the aeroplane operator takes part in any other voluntary or mandatory scheme with the option to claim CORSIA eligible fuels. As with all other risk related evidence gathered, it is necessary to adjust the verification plan regarding data requirements (e.g., contact with CORSIA eligible fuel producer necessary or not). A verification body should take verification and certification statements from other accredited bodies into account. b) Based on the identified need for documentation as per (a) above, the verification body should assess whether the aeroplane operator has all required internal and external documentation associated with CORSIA eligible fuels claim available (documentation complete). c) Data analysis to confirm that all fuels documentation is correct for the full emissions reductions claim: 1) Confirm fuel type(s)/pathway(s) identified is eligible under the CORSIA; 3-62 Environmental Technical Manual 2) Confirm correct life cycle emissions value(s) identified and applied; 3) Review an aeroplane operator’s data flows, procedures, control activities (standalone for CORSIA eligible fuels or combined with other aviation fuels), access internal audit documentation where available; 4) Cross-check volumes and/or mass of CORSIA eligible fuels claimed with purchase agreements, invoices, delivery documentation, certificates of analysis, acknowledgements of receipts, etc.; 5) Identify whether the aeroplane operator has sold any batches of CORSIA eligible fuels and ensure that appropriate control activities are in place; 6) Confirm with sufficient evidence that the CORSIA eligible fuels satisfy the CORSIA Sustainability Criteria and is reliable for each CORSIA eligible fuels claim: i) Fuel producer satisfied the criteria at the time of batch production; ii) Certification was valid at the time of batch production; iii) Aeroplane operator controls to monitor status of certification are appropriate and sufficient; iv) Undertake mitigation measures according to the risk assessment in (a) above (e.g., contact with CORSIA eligible fuels producer, access to internal audit reports). d) Confirm that emission reductions calculation is correct and in accordance with Annex 16, Volume IV, Part II, Chapter 3, 3.3. e) Confirm that there are no indications that claimed batches have been claimed by the aeroplane operator under any other schemes it has participated in during the current compliance period, as well as the compliance period immediately preceding it: 1) Checking declarations by aeroplane operator on other schemes it participated in within the current, and previous compliance period (internal documentation, however also externally available information such as sustainability report); 2) Seeking additional paperwork/info from aeroplane operator related to claims made under these other programmes and cross checking with the claim; 3) If available, cross-checking the claim with relevant information from the other scheme about the claim made by the aeroplane operator (i.e., public info about the aeroplane operator’s claim, any associated fuel registry etc.); and 4) Following any additional guidance from the State on how to check this element within State. 3.3.6 Completing the verification In order to form a conclusion on whether in all material respects, the amount of emissions stated in the Emissions Report is fairly presented and quantified in accordance with Annex 16, Volume IV and the Emissions Monitoring Plan, the following must be considered: Volume IV. Procedures for demonstrating compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Chapter 3 3-63 a) The appropriateness and sufficiency of the evidence; b) The verification objectives, scope and criteria; c) The adherence of the aeroplane operator to the Emissions Monitoring Plan and requirements in Annex 16, Volume IV; and d) The materiality of any identified misstatements/discrepancies. 3.3.6.1 Misstatements and non-conformities In general, two types of issues might appear in the process of verification: misstatements and non-conformities. A misstatement is an error, omission or misrepresentation in the aeroplane operator's Emissions Report while a non-conformity signifies any act or omission of an act that is not in accordance with the requirements in the Emissions Monitoring Plan approved by the State. A non-conformity may cause a misstatement if this non-conformity leads to errors, omissions or misrepresentations in the reported data. Examples for misstatements within the CORSIA: a) Missing flights in the sequence of flights; b) Non addressed data gaps such as missing block-on fuel value or missing fuel uplift; and c) Implausible data such as fuel uplifts larger than tank capacity, higher block-on fuel than block-off fuel, noticeably higher or lower fuel burn per flight in comparison to an average fuel burn, distinct patterns of applying standard density or filling data gaps, wrong units, etc. Examples for non-conformities within CORSIA: a) Incorrect application of the Fuel Use Monitoring Method; b) Incorrect application of the ICAO CORSIA CERT to estimate CO2 emissions; c) Incorrect version of the Emissions Monitoring Plan used to draft Emissions Report; and d) Required quality procedures not respected. 3.3.6.2 Assessing materiality Similar to other GHG schemes, materiality refers in the CORSIA to the concept that individual misstatements and non-conformities, or the aggregation of them, could affect the correct amount of CO2 emissions stated in the Emissions Report. A specific piece of information is considered to be material if, by its inclusion or exclusion, it can influence the emissions calculation or actions or decisions taken based on it. In other words, materiality is linked to the quality of the Emissions Report and therefore its acceptance. The concept of materiality is included in all major GHG reporting methods and initiatives although some use slightly different terminology. 3-64 Environmental Technical Manual In order to reach an opinion on reported data or information, a verification body needs to form a view on the materiality of all identified misstatements and non-conformities. This is usually performed at the end of the whole verification process, and before drafting the verification statement. In the materiality assessment procedure all findings are evaluated and an analysis on any misstatements and non-conformities is conducted. Materiality threshold The materiality threshold in Annex 16, Volume IV establishes an acceptable percentage discrepancy between the declared amount of emissions in the Emissions Report and the verification body’s estimation of the total amount of emissions. It is the point at which a discrepancy becomes material and therefore can influence any actions or decision taken. Figure 3-9 illustrates the materiality threshold concept in this context. Figure 3-9. Illustration of the materiality threshold concept in the context of verification When preparing a verification, this threshold must be defined in advance and serves as an indicator to the verification body to decide upon the question of whether a definitive conclusion can be drawn in order to provide a verification statement. It is important to note that a materiality threshold is not a permissible quantity of emissions that a company can exclude from its inventory. In the context of the CORSIA, misstatements and non-conformities (including errors, omissions and misrepresentations) relate to all information that an aeroplane operator is required to submit in the Emissions Report. When misstatements in the data are present, additional information is required from the operator to resolve the issue. This information should be verifiable to confirm that any corrections made are valid. Otherwise, any misstatements and/or nonconformities must be evaluated as part of the materiality assessment to determine if, in aggregate, they exceed the defined materiality threshold. Non-conformities can have some overlap with misstatements irrespective of whether they have a material effect. A material non-conformity is not dependent on the materiality threshold, but more on whether it directly affects the calculation of emissions or whether it is a more technical non-compliance such as an incomplete procedure, missing signature etc. Volume IV. Procedures for demonstrating compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Chapter 3 3-65 Application of the materiality threshold in the CORSIA The following example shows how a verification body can calculate whether the materiality level has been exceeded. In this simplified example the Emissions Report contains only three flights. Table 3-11. Illustration of calculation of materiality levels Item Verification Reported value Verification body’s value Difference Material? Flight 1 Incorrect fuel uplift A B A-B = C C/Z % Flight 2 Correct F F F-F = 0 0 % Flight 3 Incorrect block-on fuel I J I-J=K K/Z% Total Z X Z-X=Y Y/Z % If the difference in value (error) between the aeroplane operator’s reported value and the verification body’s value is negative, then the original reported value was understated. If the difference value is positive, the original reported value was overstated. The total aggregated values of all differences (i.e. positive and negative values) is used by the verification body to assess whether the defined materiality threshold is exceeded or not. On another example that regards flight information, the verification body can recreate an internal version of the report provided by the company using external information (e.g. information based on traffic recorded by air navigation service providers and invoiced to airline). The discrepancies between the verification body’s report and the aeroplane operator’s report are then assessed. Limitations of the concept Professional judgment must be exercised when evaluating the significance of issues with regards to materiality. This requires the verification body to have relevant knowledge and experience. This is important especially as misstatements and non-conformities can have a qualitative nature which means that it very much depends on the specific circumstances and the professional judgment of a verification body whether a misstatement or a non-conformity has material effect. In specific situations the materiality threshold might not be exceeded, however, the issues still might influence the decision of the State whether the Emissions Report can be accepted or not. This might be the case if the aeroplane operator does not follow the procedures of the approved Emissions Monitoring Plan or the Annex 16, Volume IV, or if systematic underestimation of emissions below the materiality threshold have taken place for several Emissions Reports submissions. 3-66 Environmental Technical Manual 3.3.6.3 Completing the Verification Report and statement If the Emissions Report includes non-material misstatement and/or non-material non-conformities, the Emissions Report will be ‘verified as satisfactory with comments’, clearly specifying the misstatements and non-conformities and confirming that these are non-material. This can be done in a list including an indication whether the root cause for a misstatement or non-conformity had been existing in previous reporting years as well. If the Emissions Report contains material misstatements and/or material non-conformities or if the scope of the verification is too limited or the verification body is not able to obtain sufficient confidence in the data, the Emissions Report will be ‘verified as not satisfactory’. In such cases it is recommended that the verification body advises the aeroplane operator to immediately contact the State. Potential examples for situations where the scope of verification is too limited are listed below: a) Sufficient access to relevant information of the aeroplane operator is not granted or relevant information is not available; or b) There is no Emissions Monitoring Plan available, or the Emissions Monitoring Plan does not contain sufficiently precise information (e.g., on the data gathering processes such that it remains unclear on which processes data contained in the Emissions Report is based). 3.3.7 After the verification Facts discovered after the verification Issues may come to the attention of the verification body that render a previously issued verification statement invalid or inaccurate. Although verification bodies are not required to actively monitor the validity of their verification statements after they are issued, where such issues are brought to the attention of the verification body, it must implement procedures to respond in accordance with ISO 14064-3 and ISO 14065. The verification body should also notify the State of the issue. Records management If a State becomes aware that a previously issued verification statement is rendered invalid or inaccurate, then the State may request access to the internal verification documentation on a confidential basis. ______________________ 4-1 Chapter 4 GUIDELINES ON CALCULATION OF OFFSETTING REQUIREMENTS The information presented in this Chapter illustrates the calculations of CO2 offsetting requirements, rounded up to the nearest tonne, as described in Annex 16, Volume IV, Part II, Chapter 3: “CO2 offsetting requirements from international flights and emissions reductions from the use of CORSIA eligible fuels”. 4.1 CALCULATION OF OFFSETTING REQUIREMENTS DURING THE 2021-2029 COMPLIANCE PERIODS 4.1.1 Case of 2021-2023 period Figure 4-1 shows how a State would calculate an aeroplane operator’s annual offsetting requirements during the 2021-2023 period (i.e., in 2023 for the purpose of illustration) if it chooses to use the aeroplane operator’s CO2 emissions in a given year. 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