The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021
Amends/Commences: New legislation
Comes into force: 22nd April 2021
The UK Emissions Trading Scheme (UK ETS) implements the principals of emissions trading by allocating and trading greenhouse gas (GHG) emissions allowances to participants of the scheme. These Regulations set out the legal framework to allow auctioning of emissions allowances.
One allowance equals one tonne of carbon dioxide (CO2) equivalent. At the end of each year, installations must have enough allowances to account for their GHG emissions. They have the flexibility to buy additional allowances on top of their allocation, or to sell surplus allowances generated from reducing their emissions below their allocation at auction. An allowance allows a participant to emit 1 tonne of CO2 equivalent.
The UK ETS was implemented in the UK by The Greenhouse Gas Emissions Trading Scheme Order 2020. It replaces the European Union Emissions Trading System (EU ETS) for UK participants, which also follows the principles of emissions trading.
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