TÜV Rheinland - E3
TÜV Rheinland - E3

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Auditing Services for Sales of Kyoto Units

  • In 2011, 2012 and 2013, two Hungarian non-profit application handling agencies required auditing services followed by an annual audit report regarding the “green” sub-programs created for Green Investment Scheme (GIS) utilization. As a validation agency accredited by the United Nations, TÜV Rheinland appeared as a reliable partner for these auditing projects.

    Basic facts

    Client
    • Energy Efficiency, Environmental and Energy Information Agency Non-Profit Llc. in 2011 and 2012
    • Non-Profit Llc. for Quality Control and Innovation in Building in 2013
    Timeframe2011, 2012 and 2013
    Project locationHungary
    Main services
    • Development of audit methodology
    • Legal and financial compliance audits
    • Carbon-dioxide reudction audit
    • Audit of application handling operations
    • Audit of monitoring system
    • Preparation of audit report
    Involved regulations/standards
    • Hungarian legislation regarding the UN Framework Convention on Climate Change
    • Hungarian ministerial ordinances
    • Kyoto Protocol implementation framework
    • Green Investment Scheme (GIS) framework

    Initial situation and requirements

    Apart from assigning every country an allowed initial amount of carbon emissions, the Kyoto Protocol, developed under the United Nations Framework Convention on Climate Change (UNFCCC), additionally created “Kyoto units”, also called carbon credits. The Kyoto units are tradable amounts of greenhouse gases issued up to the level of the initial amount assigned to a country.
    In Hungary, the Minister of National Development acts on behalf of the Hungarian State in the selling and buying of Kyoto units on the basis of international emissions trading. Based on local legislation regarding the UNFCCC, revenues resulting from Kyoto units trading are utilized as a part of the Green Investment Scheme (GIS) framework through diverse “green” sub-programs aimed at further reducing greenhouse gas emissions.

    To justify the proper utilization of the GIS, an annual report is prepared and presented in accordance with the relevant international quota treaties as well as Hungarian ministerial ordinances. These auditing services must be provided by an internationally recognized audit firm. As a United Nations (UN) accredited validation agency, known as a Designated Operational Entity (DOE), TÜV Rheinland was contacted by two hungarian non-profit “green”  application handling agencies to provide required auditing services: Energy Centre Non-Profit Plc. in 2011 and 2012, and ÉMI Non-Profit Plc. in 2013.

    This auditing project was to be conducted in three phases. First, 7 TÜV Rheinland InterCert Kft. experts were required to prepare a general auditing methodology. Then, upon completion of the audit according to the defined methodology, we were to provide audit reports for the years 2011, 2012 and 2013 regarding the appropriate utilization of revenues generated by sales of Kyoto units.

    Solutions, results

    For the Hungarian Ministry for National Development, project objectives involved examining the compliance of application and funding decision-making processes and auditing the various non-profit green sub-programs involved in carbon dioxide emissions reduction calculations. The aim was also to create a reliable methodology for the annual operational audits of every single GIS sub-program.

  • The complete project illustrated a proper understanding of the legal environment as well as document inspection. For the development of the audit methodology, our experts further prepared uniform, standardized audit criteria for the individual audit of each sub-program. Once the methodology was created and rendered generally applicable to every green sub-program, we examined the compliance of application and funding decision-making processes, conducted precise audits of the finances and accounting for the quota revenue utilization, carbon dioxide emissions reduction calculations and annual operations of each individual green program.

    Upon completion of a comprehensive list of auditing services, TÜV Rheinland InterCert Kft. prepared reports in both the Hungarian and English languages, provided suggestions for the monitoring system to be used by organizations involved and further developed and improved the initial auditing system. All provided reports were accepted by the Ministry for National Development to be handed over to greenhouse gases quota buyers.

    About TÜV Rheinland

    Founded more than 140 years ago, TÜV Rheinland is a global leader in independent inspection services, ensuring quality and safety for people, the environment, and technology in nearly all aspects of life.

    We inspect technical equipment, products and services, oversee projects and help to shape processes for companies around the world. Since 2006, we have been a member of the United Nations Global Compact to promote sustainability and combat corruption.

    TÜV Rheinland is accredited by the United Nations as a validation agency, also known as Designated Operational Entity (DOE). Our experts can carry out the obligatory validation of all your energy efficiency projects within the scope of all sectors, from energy generation and distribution, to chemical, construction or transportation. Once validated, your project can then be submitted to the United Nations Framework Convention on Climate Change (UNFCCC).

    Benefits for the Client

      TÜV Rheinland provided the Hungarian Ministry for National Development as well as both non-profit agencies with:

          • A tailored, reliable and generally applicable audit methodology for individual sub-programs.
          • Comprehensive auditing services to verify and confirm the appropriate utilization of the sales of Kyoto units.
          • Reliable audit results and reports provided by a neutral, UN-accredited validation company.

            Did you know

            The Kyoto Protocol to the UNFCCC sets binding obligations on industrialized countries to reduce greenhouse gases emissions. The first commitment period applied to emissions between 2008 and 2012 and the second applies to emissions between 2013 and 2020.

            Need more information? Do not hesitate to contact us!

            TÜV Rheinland Cert GmbH
            Am Grauen Stein
            51105 Köln

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            Web: www.tuv.com