Stepping Up to a Reasonable Level of Assurance for GHG Verifications in Alberta

Angie - Test Knowles, | February-12-13
 
 

 

Stepping up to a Reasonable Level of Assurance - ECO Canada

 

Guest Post: by Vivianne Mansour, P.Eng., EP(GHG)

Senior Air Quality Engineer
RWDI AIR Inc.

 

In 2007, Alberta Environment and Sustainable Resource Development (AESRD) passed the Specified Gas Emitters Regulation (SGER) which regulates greenhouse gas (GHG) emissions from large facilities, such as coal-fired power plants, sour gas plants and oil sands facilities. This Regulation applies to all facilities in Alberta emitting over 100,000 tonnes of CO2e per year and requires them to reduce their annual emissions intensity (total annual emissions per unit of production) by 12% from their established 2003 to 2005 baseline emissions intensity. Facilities falling under the SGER must submit annual Compliance Reports to AESRD to demonstrate that they are following the Regulation.
 
In addition, all Compliance Reports must be verified by a third-party verifier to ensure accuracy and completeness of the submission as well as conformance to the SGER. The current year, 2013, marks the first year that AESRD requires Compliance Reports to be verified to a Reasonable level of assurance. This means that Compliance Reports documenting the 2012 operating year, submitted by March 31, 2013, must be reviewed by a third-party verifier to a higher level of assurance than in previous years which were verified to a Limited level of assurance. 
 
This transition to a Reasonable level of assurance is relevant to all Environmental Professionals working in the GHG reporting sector in Alberta, as more extensive verification procedures are now required during the quantification and verification of submissions sent to AESRD. 
This article reviews the differences between Reasonable and Limited level of assurance and provides guidance on stepping up to a Reasonable level of assurance. 
 
 

Limited vs. Reasonable Level of Assurance 

The two levels of assurance are defined as follows: 
 
Limited  Level  of  Assurance:  a  moderate  level  of  assurance,  stated  as  a  negative  
assurance, with the conclusion that nothing came to the attention of the Verifier that the GHG  
statement is not true and accurate.  
 
Reasonable Level of Assurance: a high level of assurance, stated as a positive assurance,  
in which the Verifier states that the submitted GHG statement, along with all supporting  
documents, is true and accurate.  
 
According to AESRD, Reasonable level of assurance requires that the verifier have a higher confidence in the greenhouse gas assertion than was needed under Limited level of assurance. This means that verifiers need to develop systematic and detailed procedures to identify areas of high risk within the verification and design an appropriate verification strategy, verification plan and sampling plan to address these risks. Table 1 identifies some of the main differences between Limited and Reasonable level of assurance. 
 
Table 1: Comparison between Reasonable and Limited Level of Assurance 
 
 
Reference: Australian Government, Department of Climate Change and Energy Efficiency, “National Greenhouse and Energy Reporting, Audit Determination Handbook” (August, 2010) 
 
 

Key Steps for Completing a Reasonable Level of Assurance Verification 

Alberta Environment and Sustainable Resource Development recently released the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (Draft, October 2012) which outlines minimum requirements for completing verifications at a Reasonable Level of Assurance. AESRD breaks the verification work into four main stages with sub-steps included: 
 
 
1. Verification Acceptance: 
  • Client evaluation
  • Verification evaluation
  • Independence evaluation
  • Team evaluation 
 
2. Planning: 
  • Gain an Understanding (data flow and controls, process flow diagram review) 
  • Risk assessment 
  • Planning and Contribution analytics
  • Materiality analysis 
  • Verification Strategy 
  • Verification Plan 
  • Sampling Plan 
 
3. Execution
 
 
4. Completion: 
  • Subsequent events check 
  • Issue Statement of Verification 
 
These detailed steps are new requirements provided by AESRD. The process of completing verification previously relied more on subjective interpretation. It is expected that the requirement to follow these specific steps will lead to more standardized and reliable verification reports. Some verifiers may find that they are already performing many of the required steps during their Limited level assurance verification work. AESRD has stated that many verifiers in Alberta have already been performing to a “Limited Level Assurance Plus” degree. This means that although not required, many verifiers have already been digging deeper into GHG statements in a structured and well-documented manner. 
 
Much of the difference between Limited and Reasonable level of assurance verification relates to the first stage, Verification Acceptance. Not all verifiers will have performed client, verification or team evaluations. In addition, a detailed risk analysis may not have been performed during Limited level of assurance verifications. 
 
 

Tips for Reasonable Level of Assurance Verification 

1. Read the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (Draft, October 2012) and think about how   you will implement each of the requirements;
 
2. Carefully document all procedures, evidence collected and analysis completed with respect to the verification work; 
 
3. Speak with colleagues or other professionals working in the British Columbia (BC) and Ontario (ON) market where Reasonable level of assurance verification has already been occurring. Read additional guidance documents provided by the BC and ON MOE;
 
4. Start the verification as early as possible to allow for enough time to handle any and all discrepancies found during the verification;
 
5. Complete an initial review of information from the facility prior to conducting the site visit; and, 
 
6. Create internal procedures that follow the suggested steps by AESRD and complete them in the order as described above. 
 
 

Conclusion 

Moving to a Reasonable level of assurance should not be a difficult task for facilities and verifiers in Alberta. Verifiers may find that they simply need to add a few more steps to their current verification process. Verifiers in Alberta have considerable resources to draw from as they begin conducting their verifications to a higher degree of assurance. This transition to Reasonable level of assurance for verifications in Alberta will result in higher level reviews conducted, more standardized verification procedures and more reliable and comprehensive reports. Alberta will now be reporting on the same assurance level as other jurisdictions such as British Columbia and Ontario, but with the advantage of five years’ experience working at the Limited level of assurance. 
 
 
References 
 
AESRD. Technical Guidance for Completing Specified Gas Compliance Reports. Version 5.1. January 2012. 
AESRD. Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance. Draft, October 2012