The Climate Change Agreements (Administration) Regulations 2012

Made: 25th July 2012

Laid before the House of Commons: 30th July 2012

Coming into force: 1st October 2012

The Secretary of State makes the following Regulations in exercise of the powers conferred by paragraphs 52D to 52F and 146 of Schedule 6 to the Finance Act 2000[^f00001].

Citation and commencement

1

These Regulations may be cited as the Climate Change Agreements (Administration) Regulations 2012 and come into force on 1st October 2012.

Interpretation

2

In these Regulations—

• “account” means the account in the Register of a sector association or operator;

• “account holder” means a sector association or operator which holds an account;

• “the administrator” has the meaning given by Regulation 3;

• “agreement” means an umbrella agreement or an underlying agreement;

• ...

• ...

• “certification period” means a period specified in an agreement as a certification period for the facility to which the agreement applies;

• “emissions” means the total emissions in tCO₂ equivalent for a facility;

• “facility” means a facility to which an agreement applies;

• ...

• “operator” means a party to an underlying agreement other than the administrator;

• “personal information” means—the address of the registered office of the sector association or operator; andthe name, address, and email address of a person who can be contacted in respect of—the sector association or operator; andthe facility or, if more than one, each facility covered by the agreement;

• “publish” means to publish on any part of a website maintained by the administrator which is accessible to the public;

• “the Register” has the meaning given by regulation 4;

• “Schedule 6” means Schedule 6 to the Finance Act 2000[^f00002];

• “sector association” means a party to an umbrella agreement other than the administrator;

• “sector commitment” means a commitment notified to the administrator by the Secretary of State applicable to the facilities to which an umbrella agreement applies;

• “surplus” means the amount by which the emissions have fallen below the target for any target period as recorded on an account in respect of a facility;

• “target” means the target applicable to a facility set out in an underlying agreement;

• “target period” means any of the following periods—1st January 2013 to 31st December 2014;1st January 2015 to 31st December 2016;1st January 2017 to 31st December 2018; ...1st January 2019 to 31st December 2020; 1st January 2021 to 31st December 2022; 1st January 2024 to 31st December 2024; 1st January 2026 to 31st December 2026; 1st January 2027 to 31st December 2028;1st January 2029 to 31st December 2030;

• “target period 1” means the target period from 1st January 2013 to 31st December 2014;

• “target period 2” means the target period from 1st January 2015 to 31st December 2016;

• “target period 3” means the target period from 1st January 2017 to 31st December 2018;

• “target period 4” means the target period from 1st January 2019 to 31st December 2020.

• “target period 5” means the target period from 1st January 2021 to 31st December 2022;

• “target period 6” means the target period from 1st January 2024 to 31st December 2024;

• “target period 7” means the target period from 1st January 2026 to 31st December 2026;

• “target period 8” means the target period from 1st January 2027 to 31st December 2028;

• “target period 9” means the target period from 1st January 2029 to 31st December 2030;

• ...

• “tCO₂ equivalent” means tonnes of carbon dioxide or an amount of methane or nitrous oxide with an equivalent global-warming potential;

• “umbrella agreement” means an agreement that is an umbrella agreement for the purposes of paragraph 48 of Schedule 6;

• “underlying agreement” means an agreement that is an underlying agreement for the purposes of paragraph 48 of Schedule 6 or if there is no umbrella agreement, an agreement falling within paragraph 47 of Schedule 6;

• “working day” means any day other than—a Saturday, Sunday, Good Friday or Christmas Day; ora day which is a bank holiday under the Banking and Financial Dealings Act 1971[^f00003].

The administrator

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The Environment Agency (“the administrator”) is the body appointed as the administrator for the purposes of paragraph 52A(1) of Schedule 6.

The Register

4

• (1) The Secretary of State must operate an electronic system for the administration of agreements (“the Register”).

• (2) Subject to paragraph (3), the Secretary of State must take reasonable steps to ensure that the Register is accessible at all times to persons who are entitled to use it.

• (3) The Secretary of State may restrict access to the Register at such times as the Secretary of State considers reasonable to conduct planned downtime or maintenance (including updates and reconfigurations) on the Register.

• (4) The persons who are entitled to use the Register are the administrator, current and prospective account holders and any person appointed on behalf of an account holder to operate an account.

• (5) The administrator may establish administrative rules in relation to the operation of the Register.

Set up and operation of an account

5

• (1) The administrator must ensure that—

• (a) prospective sector associations are able to apply to enter into umbrella agreements using the Register; and

• (b) sector associations are able to apply on behalf of prospective operators for the prospective operators to enter into underlying agreements.

• (2) The administrator must, in relation to each agreement, set up an account for each sector association or operator as soon as reasonably practicable after the sector association or operator has entered into an agreement.

• (3) Subject to paragraph (5), the administrator must ensure that each account contains the agreement to which the account relates.

• (4) Subject to paragraph (5), the administrator must ensure that each account of an operator—

• (a) records sufficient information to demonstrate whether the target has been met; and

• (b) records any surplus.

• (5) The administrator is not under any obligation to ensure that an account records the information in paragraph (3) or (4) if the account holder fails to supply sufficient information to the administrator to enable the administrator to comply with its obligations under paragraph (3) or (4).

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) The administrator may record any information on the Register which it considers reasonable so to record.

Security of the Register

6

• (1) The Secretary of State must take reasonable steps to ensure that—

• (a) the Register is secure from misuse; and

• (b) the Register is only accessible to persons who are entitled to use it.

• (2) Subject to paragraph (3), the Secretary of State must ensure that information which relates to an account holder is not accessible by another account holder.

• (3) The Secretary of State must ensure that information that relates to an operator is accessible by the sector association in respect of the umbrella agreement to which the underlying agreement of the operator relates.

Suspension or restriction of use of the Register

7

• (1) The administrator may suspend or restrict the use of the Register by an account holder or a person (“appointed person”) appointed on behalf of an account holder to operate the account if—

• (a) the account holder or appointed person is in breach of any administrative rules concerning the operation of the Register; or

• (b) the administrator believes that the account holder or appointed person has been, is using or intends to use the Register for or in connection with a criminal offence.

• (2) The administrator may suspend the operation of the Register or any account where it believes that the security of the Register may be at risk.

Closure of an account

8

As soon as reasonably practicable after an agreement has been terminated, the administrator must—

• (a) close the account of the account holder for that agreement;

• (b) give notice in writing of the closure of the account to the account holder; and

• (c) cancel any surplus recorded in the account of the account holder for that agreement.

Publication

9

• (1) Subject to paragraph (4), as soon as reasonably practicable after the first day of a certification period, the administrator must publish a list containing the name and address of each facility which is to be taken as being covered by an agreement and the period for which the facility is taken to be so covered as mentioned in paragraph 44 of Schedule 6.

• (2) Subject to paragraph (4), the administrator must publish a revised list containing the details in paragraph (1) on the last working day of each month if, since the last publication of the list—

• (a) a certificate has been given by the administrator to the Commissioners in accordance with paragraph 44 of Schedule 6; or

• (b) a variation certificate has been given by the administrator to the Commissioners in accordance with paragraph 45 of Schedule 6.

• (3) Subject to paragraph (5), as soon as reasonably practicable after the end of each target period, the administrator must publish a report setting out energy efficiency improvements and emission reductions achieved under agreements for the target period, including—

• (a) for each sector association, details of whether the sector commitment has been met; and

• (b) for each facility, details of the emissions recorded in the Register and details of whether the target has been met.

• (4) The administrator is under no obligation to publish information under paragraphs (1) or (2) if paragraphs (6) and (8) apply.

• (5) The administrator is under no obligation to publish information under paragraph (3) if paragraphs (7) and (8) apply.

• (6) This paragraph applies if—

• (a) before 1st October 2012, an operator made a request to the Secretary of State that information relating to a facility is not published on the grounds that publishing the information would adversely affect the security of a facility and the Secretary of State decided not to publish the information;

• (b) an operator has made a request to the administrator that information relating to a facility is not published on the grounds that publishing the information would adversely affect the security of the facility and the administrator has decided that publishing the information would have such an effect; or

• (c) the Secretary of State has directed the administrator that publishing such information would adversely affect national security.

• (7) This paragraph applies if—

• (a) a sector association or an operator has made a request to the administrator that the information is not published on the grounds that publication would adversely affect the confidentiality of commercial or industrial information; and

• (b) the administrator has decided that it is necessary, in order to protect a legitimate economic interest, to withhold publication of the information;

to the extent that the information is not information on emissions into the environment.

• (8) This paragraph applies if the Secretary of State or the administrator (as the case may be) has—

• (a) prior to making any decision or direction, applied a presumption in favour of publishing the information; and

• (b) determined that, in all the circumstances of the case, the public interest in not publishing the information outweighs the public interest in publishing the information.

Requirements for administrator to be satisfied before entering into an agreement

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• (1) The administrator may only enter into an umbrella agreement after it has taken reasonable steps to satisfy itself that the facilities are facilities within the meaning of paragraph 50 of Schedule 6.

• (2) The administrator may only enter into an underlying agreement after it has taken reasonable steps to satisfy itself—

• (a) of the identity of the operator;

• (b) that the facility to which the agreement applies is a facility within the meaning of paragraph 50 of Schedule 6; and

• (c) that the activities undertaken by the facility fall within the umbrella agreement, if any.

• (3) The administrator may only enter into an underlying agreement which covers a facility to which a previous underlying agreement applied if it has taken reasonable steps to satisfy itself that—

• (a) progress made in the immediately preceding certification period towards meeting targets under the previous underlying agreement is, or is likely to be, satisfactory; and

• (b) there are no outstanding penalties or charges in respect of the previous underlying agreement.

Requirements of an agreement

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• (1) An agreement must be in a form approved by the Secretary of State.

• (2) An umbrella agreement must contain a sector commitment.

Terms to be included in an underlying agreement relating to the buy-out fee

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• (1) An underlying agreement must contain the terms set out in paragraph (2).

• (2) The terms referred to in paragraph (1) are—

• (a) if the administrator finds that a facility has failed to meet its target —

• (i) at any time in the period beginning with 1st May in the year following the end of a target period and ending immediately before the first day of the next certification period; or

• (ii) at any other time,

the obligation to make progress towards meeting the target may instead be satisfied by the payment to the administrator of a fee in accordance with sub-paragraph (b);

• (b) if sub-paragraph (a) applies, the administrator must serve a notice on the operator containing the following information—

• (i) that the facility has failed to meet its target;

• (ii) the fee to be paid, calculated in accordance with sub-paragraph (c) or (d);

• (iii) the date by which the fee must be paid, determined in accordance with sub-paragraph (e) or (f);

• (iv) to whom the fee must be paid;

• (v) how the fee is to be paid; and

• (vi) that failure to pay the fee in accordance with the notice will result in the issue of a variation certificate in accordance with paragraph 45 of Schedule 6;

• (c) if sub-paragraph (a)(i) applies, the amount of the fee is—

$$A×(W−S)$where—A is £12 where the finding is of a failure to meet a target for target period 1 or target period 2, £14 where the finding is of a failure to meet a target for target period 3 or target period 4 , £18 where the finding is of a failure to meet a target for target period 5 , or £25 where the finding is of a failure to meet a target for target period 6;where the finding is of a failure to meet a target for target period 7, 8 or 9, A is the number of pounds sterling which is equal to the result of the application of the formula in paragraph (3) in respect of that target period, rounded up or down to the nearest pound;W in units of tCO₂ equivalent represents the amount by which the emissions for the target period exceed the target; ... S, for target periods 1 to 4, in units of tCO₂ equivalent represents any surplus; ... S, for target periods 5, 6 and 7, is zero;S, for target period 8, in units of tCO₂ equivalent represents any surplus in respect of target period 7; andS, for target period 9, in units of tCO₂ equivalent represents any surplus in respect of target period 7 or 8;$

• (d) if sub-paragraph (a)(ii) applies, the amount of the fee is—

$$A×W$where—A is £12 where the finding is of a failure to meet a target for target period 1 or target period 2, £14 where the finding is of a failure to meet a target for target period 3 or target period 4 , £18 where the finding is of a failure to meet a target for target period 5 , or £25 where the finding is of a failure to meet a target for target period 6; ...where the finding is of a failure to meet a target for target period 7, 8 or 9, A is the number of pounds sterling which is equal to the result of the application of the formula in paragraph (3) in respect of that target period, rounded up or down to the nearest pound; andW in units of tCO₂ equivalent represents the amount by which the emissions for the target period exceed the target;$

• (e) if sub-paragraph (a)(i) applies, the fee must be paid on or before 1st July in the year in which the facility is found to have failed to meet its target;

• (f) if sub-paragraph (a)(ii) applies, the fee must be paid within 30 working days beginning with the date of the notice; and

• (g) payment of the fee is deemed to have been made when the person to whom the fee must be paid as specified in the notice receives full cleared funds.

• (3) The formula in this paragraph is—