As allowances are traded on the open market it is important that they can be trusted by investors to be real and not just hot air. Verification provides investors confidence in the scheme and the accuracy of the reported figures, which gives the allowances real value. Without this, the free allowances Operators receive are valueless.


Verification involves looking at the monitoring and control processes that the Operator has in place, ensuring that they match the approved monitoring plan and that they are fit-for-purpose, and suitable to meet the required levels of accuracy. Data is also sampled and subject to detailed testing to ensure that there are no gaps and that it is correct. This reassures the Operator that their monitoring processes are correct and gives the Competent Authorities and the open market confidence that the data provided is accurate and meets legal requirements.


Once the detailed verification is completed, the verifier comes to a conclusion which is presented in the form of a formal Verification Opinion Statement. This is submitted alongside the emissions report to the Competent Authority.

How to survive the Audit

Verification can be a slow and labourous process, however if you approach it in the right way, it can become much quicker and easier. I worked as a verifier in the first two years of the scheme, and in my experience, what is more important than the number of errors in the data, or even the amount of effort they put into preparing the report, is the approach the operator takes to the verification. The audits which tend to go smoother are the ones where the operators has aimed to comply with the rules, rather than try to pass the audit with minimal effort.


Here are a few tips to getting through the audit with your hair intact:


Verifiers are not consultants. Not only do they serve a very different role within the scheme, they are specifically not allowed to offer a service which could be considered consultancy. You shouldn’t just throw a lot of raw data at them and expect them to prepare the report for you. The verifier is not able to fix the problems they identify so if you take ownership of your report from the start, you will be more familiar with the data when it comes to correcting any errors.


Provide supporting evidence for everything. Verifiers are making a legal statement about the accuracy of your data which others will rely upon. In order to do this, they must be able to see how the information passes through your systems, from the raw primary data through to the report. Don’t dispose of any information unless you are sure you don’t need it, and make sure you have tight controls over anything you do need to keep. You are required to retain all primary records for 10 years from the point at which you submit it.


One stupid question in every hundred gets an intelligent answer. Auditors are not in a position to make any assumptions about any inconsistencies in the data. This means that they often have to ask questions that appear obvious. Don’t think it is a sign that the auditor doesn’t know what they are talking about or they are being overly pedantic.


We have never had to do that before/this is how we have always done it. The ETS creates a new set of requirements that are a legally enforceable as something issued by the CAA or HMRC. You are also required for knowing what your requirements are under the scheme, so claiming nobody told you is not an excuse (and why this site exists!).

The verifier cannot change the legislation. There are many aspects of the scheme which are not as practical as they could be, and there are many that seem overly burdensome. However the verifier does not have the freedom to accept things that breach the rules no matter how impractical the rules are.


The processes are just as important as the data. There are strict rules about how the data is collected, so don’t think of compliance with the ETS being purely about the data, half, if not more, of the verification effort is spend on understanding how the data flows through your systems.


It is not a problem to have findings. Some operators get a little offended if an issue is raised - don’t worry! In the two years as an auditor I only issued one opinion which did not have any findings – and even that was after I found issues which were resolved before the end of the verification. The point of an audit is to spot the things you have missed, even the very small things, and if an auditor is seen to miss the small things by their accreditation body, it raises questions about the big things.