The Greenhouse Gas Emissions Trading Scheme Regulations 2019

Amends: The Greenhouse Gas Emissions Trading Scheme Regulations 2012
Comes into force: 21st November 2019
Jurisdiction: UK

Please note: These Regulations and any amendments that are made will be revoked on exit day, as the amendments they make to European Union Emissions Trading Scheme (EU ETS) will no longer be relevant to the UK.

These Regulations make the changes required to fully implement these changes to the EU ETS scheme in the UK.

Phase IV
Changes relating to Phase IV (2021-2030) include the following:

• Introducing a distinction between trading periods and allocation periods;
• Eliminates the requirements for regulators to review Greenhouse Gas permits every 5 years; and
• Introduces the obligation to report on the level of compensation offered to certain sectors for the indirect costs of the EU ETS.

Opt-out scheme
A new opt-out scheme is introduced for ultra-small emitters that emit less than 2,500 tonnes of carbon dioxide per year. This opt out implements Article 27a of the EU ETS Directive and reduces the regulatory burden on small emitters.

Penalties
Clarification is given to the mandatory penalty which applies where an operator has not surrendered sufficient allowances by the relevant deadline. This is calculated by reference to the emissions in the years which breaches have occurred.

If the maximum amount of emissions for an ultra-small installation is exceeded, the operator is liable to a penalty.

If a regulated activity is carried out without the necessary permit, and the operator of an Article 27a installation has exceeded the maximum amount in any scheme year and has failed to notify the regulator by 31st March in the following years scheme, then a penalty may be imposed.

Transitional provisions
A permit granted under the 2005 Regulations which came into force before 1st January 2021 will continue to have effect until it is revoked or surrendered under these 2019 Regulations.

An excluded installation permit that is in force before 1st January 2021 continues to have effect until it is revoked, surrendered or varied under these 2019 Regulations.

Any operator who provided services to a hospital before 2021 and stops services during 2020, must give notice to the regulator no later than 31st March 2021.

An operator may apply for an increase in the emissions targets for the installation for following years, provided an increase in the capacity of an excluded installation has occurred after 30th June 2019.

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