Legalize / United Kingdom / Statutory-Instrument

The Greenhouse Gas Emissions Trading Scheme Order 2020

Type Statutory-Instrument

Publication 2020-11-11

Last updated 2026-03-11

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

PDF Download

articles 86

Reform history JSON API

CHAPTER 1 — Opening accounts

Central accounts

9

(1) The UK ETS authority may open accounts in the name of the UK ETS authority for the purposes of the UK ETS, in particular—

(a) a total quantity account (for the creation of allowances under article 18);

(b) an allocation account (to hold allowances to be allocated under Part 4A);

(d) an auction account (to hold allowances to be auctioned under the Auctioning Regulations);

(e) a market stability mechanism account (to hold excess allowances unsold at auctions under the Auctioning Regulations);

(f) a deletion account (to hold allowances deleted under paragraph 23);

(g) a surrender account (to hold allowances surrendered under paragraph 24);

(h) one or more general holding accounts (to hold allowances transferred from accounts before closure under paragraph 30);

(i) a flexible reserve account (to keep track of the flexible reserve referred to in article 23A).

(2) An account held by the UK ETS authority is a “central account”.

Auction delivery account

10

(1) Where a recognised auction platform is appointed to auction allowances under the Auctioning Regulations, the UK ETS authority must, as soon as reasonably practicable, instruct the registry administrator to open an auction delivery account in the name of the recognised auction platform.

(2) The recognised auction platform must as soon as reasonably practicable after appointment under the Auctioning Regulations submit to the registry administrator—

(a) the charge for opening the account set out in the charging scheme published under article 36A;

(b) applications under paragraph 16 to appoint at least 2 individuals as operational authorised representatives for the account with account permissions such that they are together able to propose and approve all types of action in relation to the account.

(3) The registry administrator may, by notice to the UK ETS authority or the recognised auction platform, require the UK ETS authority or the recognised auction platform to provide, in the form specified in the notice, such information as the registry administrator considers necessary to open the account.

(4) As soon as reasonably practicable after receiving the charge required under sub-paragraph (2)(a) and any information required under sub-paragraph (3) and at least 2 operational authorised representatives with the account permissions referred to in sub-paragraph (2)(b) have been appointed for the account, the registry administrator must open the account.

(5) In this paragraph, “recognised auction platform” means a recognised investment exchange in relation to which a recognition order under the Recognised Auction Platform Regulations 2011 is in force.

(6) In sub-paragraph (5), “recognised investment exchange” means an investment exchange in relation to which a recognition order under section 290 of the Financial Services and Markets Act 2000 is in force.

Operator holding accounts

11

(1) This paragraph applies where the regulator—

(a) issues a greenhouse gas emissions permit for an installation under paragraph 3 of Schedule 6;

(b) grants an application for the partial transfer of a greenhouse gas emissions permit under paragraph 9 of Schedule 6;

(c) converts an installation's hospital or small emitter permit into a greenhouse gas emissions permit under paragraph 24(2) or 26(3) of Schedule 7; or

(d) converts an installation's permit (within the meaning of GGETSR 2012) into a greenhouse gas emissions permit under paragraph 1(4)(a) of Schedule 11.

(2) The regulator must, as soon as reasonably practicable—

(a) instruct the registry administrator to open an operator holding account for the installation in the name of the operator of the installation or, where sub-paragraph (1)(b) applies, for the installation consisting of the transferred units (as defined in paragraph 8(1) of Schedule 6) in the name of the new operator (as defined in paragraph 7(1) of that Schedule); or

(b) inform the registry administrator that a new operator holding account is not required.

(3) Where sub-paragraph (2)(a) applies, the registry administrator may, by notice to the operator or the regulator, require the operator or the regulator to provide, in the form specified in the notice, such information as the registry administrator considers necessary to—

(a) open the account; and

(b) assess whether the operator is a fit and proper person to hold an operator holding account.

(4) As soon as reasonably practicable after receiving an instruction under sub-paragraph (2)(a) and any information required under sub-paragraph (3), the registry administrator must assess whether the operator is a fit and proper person to hold an operator holding account and—

(a) if the registry administrator considers that the operator is a fit and proper person to hold an operator holding account, open the account; or

(b) if the registry administrator does not consider that the operator is a fit and proper person to hold an operator holding account, open, and immediately suspend, the account, imposing the restriction set out in paragraph 25(2)(b) or (c) (or both).

(5) The registry administrator must give notice to the operator and the regulator of a decision to open and suspend an account under sub-paragraph (4)(b).

(6) A notice under sub-paragraph (5) must include the reason for the suspension unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

(7) Where, after a suspension under sub-paragraph (4)(b), the registry administrator subsequently considers that the operator is a fit and proper person to hold an operator holding account, the registry administrator must, as soon as reasonably practicable—

(a) lift the suspension;

(b) give notice to the operator and the regulator that the suspension has been lifted.

Transfer of operator holding accounts

12

(1) Where the regulator grants an application for the transfer (other than a partial transfer) of an installation's greenhouse gas emissions permit under paragraph 9 of Schedule 6, the regulator must, as soon as reasonably practicable—

(a) instruct the registry administrator to transfer the operator holding account for the installation held in the name of the transferring operator (as defined in paragraph 7(1) of Schedule 6) to the new operator (as defined in that sub-paragraph);

(b) instruct the registry administrator to—

(i) open an operator holding account for the installation in the name of the new operator; and

(ii) close the operator holding account held in the name of the transferring operator (but see sub-paragraph (8)); or

(2) Where paragraph (1)(a) or (b) applies, the registry administrator may, by notice to the new operator or the regulator, require the new operator or the regulator to provide, in the form specified in the notice, such information as the registry administrator considers necessary to—

(a) transfer or, as the case may be, open the account; and

(b) assess whether the new operator is a fit and proper person to hold an operator holding account.

(3) As soon as reasonably practicable after receiving an instruction under sub-paragraph (1)(a) or (b) and any information required under sub-paragraph (2), the registry administrator must assess whether the new operator is a fit and proper person to hold an operator holding account and—

(a) if the registry administrator considers that the new operator is a fit and proper person to hold an operator holding account, transfer or, as the case may be, open the account; or

(b) if the registry administrator does not consider that the new operator is a fit and proper person to hold an operator holding account—

(i) transfer or, as the case may be, open the account; and

(ii) immediately suspend the account, imposing the restriction set out in paragraph 25(2)(b) or (c) (or both).

(4) The registry administrator must give notice to the new operator and the regulator of a decision to transfer or, as the case may be, open and suspend an account under sub-paragraph (3)(b).

(5) A notice under sub-paragraph (4) must include the reason for the suspension unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

(6) Where, after a suspension under sub-paragraph (3)(b), the registry administrator subsequently considers that the new operator is a fit and proper person to hold an operator holding account, the registry administrator must, as soon as reasonably practicable—

(a) lift the suspension;

(b) give notice to the new operator and the regulator that the suspension has been lifted.

(7) Where the registry administrator receives an instruction to transfer an operator holding account under sub-paragraph (1)(a), no action may be performed in relation to the account until the registry administrator complies with sub-paragraph (3).

(8) Where the grant of the application results in a merger (as defined in Article 2(17) of the Free Allocation Regulation) and the transfer date (as defined in paragraph 9(6) of Schedule 6 to this Order) is on or after 31st March in a scheme year, the registry administrator must not close the transferring operator’s operator holding account in accordance with an instruction under sub-paragraph (1)(b)(ii) of this paragraph until any transfers or returns of allowances required to be made from the operator holding account by notice under article 34U or 34V are made.

Aircraft operator holding accounts

13

(1) Where the regulator issues an emissions monitoring plan to a person under article 29, the regulator must, as soon as reasonably practicable, instruct the registry administrator to open an aircraft operator holding account in the name of the person.

(2) The registry administrator may, by notice to the person or the regulator, require the person or the regulator to provide, in the form specified in the notice, such information as the registry administrator considers necessary to—

(a) open the account; and

(b) assess whether the person is a fit and proper person to hold an aircraft operator holding account.

(3) As soon as reasonably practicable after receiving an instruction under sub-paragraph (1) and any information required under sub-paragraph (2), the registry administrator must assess whether the person is a fit and proper person to hold an aircraft operator holding account and—

(a) if the registry administrator considers that the person is a fit and proper person to hold an aircraft operator holding account, open the account; or

(b) if the registry administrator does not consider that the person is a fit and proper person to hold an aircraft operator holding account, open, and immediately suspend, the account imposing the restriction set out in paragraph 25(2)(b) or (c) (or both).

(4) The registry administrator must give notice to the person and the regulator of a decision to open and suspend an account under sub-paragraph (3)(b).

(5) A notice under sub-paragraph (4) must include the reason for the suspension unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

(6) Where, after a suspension under sub-paragraph (3)(b), the registry administrator subsequently considers that the person is a fit and proper person to hold an aircraft operator holding account, the registry administrator must, as soon as reasonably practicable—

(a) lift the suspension;

(b) give notice to the person and the regulator that the suspension has been lifted.

Trading accounts

14

(1) Any person may apply to the registry administrator to open a trading account on terms agreed by the registry administrator.

(2) An application must be accompanied by—

(a) the charge for the application set out in the charging scheme published under article 36A;

(b) applications under paragraph 16 to appoint at least 2 individuals as operational authorised representatives for the account with account permissions such that they are together able to propose and approve all types of action in relation to the account.

(3) After receiving an application, the registry administrator may, by notice to the applicant, require the applicant to provide, in the form specified in the notice, such information as the registry administrator considers necessary to determine the application.

(4) As soon as reasonably practicable after receiving the application and any information required under sub-paragraph (3), the registry administrator must assess whether the applicant is a fit and proper person to hold a trading account and—

(a) if the registry administrator considers that the applicant is a fit and proper person to hold a trading account and at least 2 operational authorised representatives with the account permissions referred to in sub-paragraph (2)(b) have been appointed for the account, open the account; or

(b) if either—

(i) the registry administrator does not consider that the applicant is a fit and proper person to hold a trading account; or

(ii) at least 2 operational authorised representatives with the account permissions referred to in sub-paragraph (2)(b) have not been appointed for the account,

give notice to the applicant that the application to open the account is refused.

(5) A notice under sub-paragraph (4)(b) must include the reason for the refusal unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

CHAPTER 2 — Account representatives

Primary contacts and alternative primary contacts

15

(1) An account holder must give details to the registry administrator of an individual whom the account holder appoints as a person authorised to give instructions to the registry administrator on the account holder's behalf in relation to the account.

(2) An individual appointed under sub-paragraph (1) is the “primary contact” for the account.

(3) An account holder who is an individual may appoint the account holder as the primary contact for the account.

(4) An account holder who has appointed a primary contact may give details to the registry administrator of a second individual whom the account holder appoints as a person authorised to give instructions to the registry administrator on the account holder's behalf in relation the account.

(5) An individual appointed under sub-paragraph (4) is the “alternative primary contact” for the account.

(6) The primary contact and any alternative primary contact must be at least 18 years of age.

(7) An account holder may, at any time by notice to the registry administrator—

(a) replace the primary contact;

(b) replace or remove the alternative primary contact.

Appointment of authorised representatives

16

(1) An account holder or a prospective account holder may apply to the registry administrator for one or more individuals (up to a maximum number of 8) to be appointed as authorised representatives for the account with access to the registry to perform actions in relation to the account on behalf of the account holder.

(2) An account holder who is an individual may apply for the account holder to be appointed as an authorised representative for the account.

(3) An authorised representative must be at least 18 years of age.

(4) An authorised representative may have one of the following permissions (an “account permission”)—

(a) permission to propose actions in relation to the account;

(b) permission to approve actions in relation to the account;

(c) permission to propose actions, and approve actions proposed by another operational authorised representative, in relation to the account;

(d) permission to review account information only.

(e) in the case of an operator holding account or an aircraft operator holding account, permission to perform the following actions only (including permission to propose the actions for approval, and approve them if proposed, by another operational authorised representative)—

(i) to transfer allowances from the account to the surrender account;

(ii) where allowances to which a person is not entitled (as set out in article 34S(3) or 34T(3)) have been transferred to the account under Part 4A, to transfer an equal number of allowances from the account to a central account designated by the UK ETS authority for the return of allowances (whether or not a notice under article 34V is given).

(5) An application for an individual to be appointed as an authorised representative must—

(a) specify which account permission the individual is to have;

(b) be accompanied by the charge for the application set out in the charging scheme published under article 36A.

(6) After receiving an application, the registry administrator may, by notice to the applicant, require the applicant to provide, in the form specified in the notice, such information as the registry administrator considers necessary to determine the application.

(7) As soon as reasonably practicable after receiving the application and any information required under sub-paragraph (6), the registry administrator must assess whether the individual is a fit and proper person to be an authorised representative and—

(a) if the registry administrator considers that the individual is a fit and proper person to be an authorised representative, appoint the individual as an authorised representative with the account permission in respect of which the application is made and give notice to the applicant of the appointment; or

(b) if the registry administrator considers that the individual is not a fit and proper person to be an authorised representative, give notice to the applicant that the application is refused.

(8) A notice under sub-paragraph (7)(b) must include the reason for the refusal unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

(9) The registry administrator may, in administrative rules made under paragraph 6(1)(a), provide for whether actions of a particular type require the approval of a second operational authorised representative in addition to the operational authorised representative proposing the action.

(10) The appointment of an authorised representative for an account does not preclude the account holder from instructing the registry administrator to perform actions in relation to the account on behalf of the account holder.

(11) In this Schedule, “operational authorised representative” means an authorised representative who has an account permission referred to in sub-paragraph (4)(a), (b) , (c) or (e).

Change in account permission of authorised representatives

17

(1) An account holder may apply to the registry administrator to change the account permission of an individual appointed as an authorised representative.

(2) An application must—

(a) specify which account permission the individual is to have;

(b) be accompanied by the charge for the application set out in the charging scheme published under article 36A.

(3) After receiving an application, the registry administrator may, by notice to the account holder, require the account holder to provide, in the form specified in the notice, such information as the registry administrator considers necessary to determine the application.

(4) As soon as reasonably practicable after receiving the application and any information required under sub-paragraph (3), the registry administrator must assess whether the individual is still a fit and proper person to be an authorised representative and—

(a) if the registry administrator considers that the individual is still a fit and proper person to be an authorised representative, change the individual's account permission to the account permission in respect of which the application is made and give notice to the account holder of the change; or

(b) if the registry administrator considers that the individual has ceased to be a fit and proper person to be an authorised representative, give notice to the account holder that the application is refused.

(5) A notice under sub-paragraph (4)(b) must include the reason for the refusal unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

Suspension of access to registry of authorised representatives

18

(1) The registry administrator may suspend an authorised representative's access to the registry in either of the following circumstances—

(a) if the registry administrator considers that the suspension is necessary to ensure that the registry is secure and protected from misuse;

(b) if the registry administrator considers that the authorised representative has ceased to be a fit and proper person to be an authorised representative.

(2) Where the registry administrator suspends an authorised representative's access to the registry, the registry administrator must give notice of the suspension to the account holder as soon as reasonably practicable.

(3) A notice under sub-paragraph (2) must include the reason for the suspension unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

(4) Where, after a suspension under sub-paragraph (2), the registry administrator subsequently considers that the circumstances giving rise to the suspension no longer exist, the registry administrator must as soon as reasonably practicable—

(a) lift the suspension;

(b) give notice to the account holder that the suspension has been lifted.

Removal of authorised representatives

19

(1) The registry administrator may remove an individual as an authorised representative for an account—

(a) if the account holder requests the registry administrator to remove the individual as authorised representative;

(b) if the individual requests the registry administrator to remove the individual as authorised representative;

(c) if the registry administrator considers that the individual has ceased to be a fit and proper person to be an authorised representative; or

(d) where the individual's access to the registry has been suspended, if the registry administrator considers that the circumstances giving rise to the suspension still exist and are unlikely to be resolved within a reasonable period of time.

(2) The registry administrator must give notice to the account holder of a removal under sub-paragraph (1)(b), (c) or (d).

(3) A notice following a removal under sub-paragraph (1)(c) or (d) must include the reason for the removal unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

CHAPTER 3 — Transfers of allowances

Transfers between accounts

20

(1) An allowance may be transferred from one account to another.

(2) Sub-paragraph (1) is subject to—

(a) paragraph 11(4)(b) (operator holding accounts);

(b) paragraph 12(3)(b) or (7) (transfer of operator holding accounts);

(d) paragraph 25 (suspension of accounts).

Transfer cancellations

21

The transfer of an allowance between accounts may be cancelled by the account holder of the transferring account at any time before the transfer has completed.

Transfer reversals

22

(1) A transfer of an allowance that has completed may not be reversed except as set out in this paragraph.

(2) The registry administrator must reverse the transfer of an allowance to the deletion account if, within 14 days beginning with the day on which the transfer completes, the account holder requests the registry administrator to reverse the transfer.

(3) The registry administrator must reverse the transfer of an allowance to the surrender account if, within 14 days beginning with the day on which the transfer completes, the account holder requests the registry administrator to reverse the transfer.

(4) Sub-paragraph (3) is subject to paragraph 24 (surrender of allowances).

(5) Where the account from which the allowance was transferred has been closed since the transfer completed (and the transfer cannot therefore be reversed), the account holder who requests the reversal of a transfer must give notice to the registry administrator of an alternative account to which the allowance is to be transferred.

(6) The registry administrator may reverse the transfer of an allowance from the allocation account if the transfer was made in error.

Deletion of allowances

23

(1) An account holder may delete an allowance by transferring the allowance from the account holder's account to the deletion account.

(2) An allowance transferred to the deletion account may not be transferred from the deletion account and ceases to be available for any other purpose unless the transfer is reversed under paragraph 22 (transfer reversals).

Surrender of allowances

24

(1) The operator of an installation or a person who is an aircraft operator in relation to a scheme year may surrender an allowance by transferring the allowance from the operator's operator holding account for the installation or the aircraft operator's aircraft operator holding account to the surrender account.

(2) An allowance that has been transferred to the surrender account may not be transferred from the surrender account and ceases to be available for any other purpose.

(3) But the transfer of an allowance to the surrender account may be reversed under paragraph 22(3) if—

(a) the person requesting the reversal has complied with—

(i) where the person requesting the reversal is the operator of an installation, the person's obligations to surrender allowances under article 27 in respect of the installation;

(ii) where the person requesting the reversal is an aircraft operator in relation to a scheme year, the person's obligations to surrender allowances under article 34; and

(b) the reversal of the transfer would not result in the person being in breach of those obligations.

CHAPTER 4 — Suspension and closure of accounts

Suspension of accounts

25

(1) The registry administrator may suspend an account other than a central account in any of the following circumstances—

(a) if, on the death or dissolution of the account holder or the occurrence of an insolvency event in relation to the account holder, either—

(i) it is not clear who has the right to deal with the assets of the account holder; or

(ii) the registry administrator has not received instructions about the operation of the account from the person who has the right to deal with the assets of the account holder;

(b) if the registry administrator does not consider that the account holder is a fit and proper person to hold the account;

(c) if the registry administrator considers that the account has been, is being or may be used in relation to the commission of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom.

(d) at the request of the account holder.

(2) A suspended account may be subject to one or more of the following restrictions—

(a) no allowances may be transferred to the account except from the allocation account;

(b) no authorised representative may perform an action in relation to the account by accessing the registry;

(3) Where the registry administrator suspends an account under sub-paragraph (1)(a), (b) or (c), the registry administrator must give notice of the suspension to the account holder as soon as reasonably practicable.

(4) A notice under sub-paragraph (3) must include the reason for the suspension unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security .

(5) Where, after a suspension under sub-paragraph (1), the registry administrator subsequently considers that the circumstances giving rise to the suspension no longer exist, the registry administrator must as soon as reasonably practicable—

(a) lift the suspension;

(b) give notice to the account holder that the suspension has been lifted.

(6) For the purposes of this paragraph an “insolvency event” occurs in relation to an account holder if—

(a) an order for the winding-up of the account holder is made;

(b) a resolution for the voluntary winding-up of the account holder is passed;

(d) a bankruptcy order is made in relation to the account holder or, in Scotland, an award of sequestration is made against the account holder;

(e) a provisional liquidator is appointed for the account holder under section 135 of the Insolvency Act 1986; or

(f) an event (an “overseas insolvency event”) occurs in a country or territory outside the United Kingdom in relation to the account holder that the registry administrator considers corresponds to an event (a “UK insolvency event”) referred to in paragraphs (a) to (e).

(7) For the purpose of considering under sub-paragraph (6)(f) whether an overseas insolvency event corresponds to a UK insolvency event, where, in consequence of the UK insolvency event, a person is appointed to an office (for example, liquidator or trustee in bankruptcy) to deal with the assets of the account holder, it is immaterial whether or not there is a corresponding appointment in consequence of the overseas insolvency event.

Closure of central accounts and auction delivery account

26

The UK ETS authority may close—

(a) a central account;

(b) the auction delivery account.

Closure of operator holding accounts

27

(1) This paragraph applies where—

(i) an installation's greenhouse gas emissions permit is cancelled under paragraph 9(5)(b) of Schedule 6;

(ii) after giving a surrender notice under paragraph 11(3) of that Schedule in respect of a greenhouse gas emissions permit for an installation, the regulator certifies under paragraph 11(6)(b) of that Schedule that the conditions of the permit and the requirements of the surrender notice have been complied with or that there is no reasonable prospect of their being complied with;

(iii) after giving a revocation notice under paragraph 12(4) of that Schedule in respect of a greenhouse gas emissions permit for an installation, the regulator certifies under paragraph 12(7)(b) of that Schedule that the conditions of the permit and the requirements of the revocation notice have been complied with or that there is no reasonable prospect of their being complied with; or

(iv) after the regulator converts an installation's greenhouse gas emissions permit into a hospital or small emitter permit under paragraph 10 of Schedule 7, the obligations of the operator under the permit in respect of specified emissions before 1st January 2026 are complied with; and

(b) where relevant, any notice given under article 34V (return of allowances: notice to operator, etc.) , any deficit notice given under article 44A or any notice given under paragraph 10 of Schedule 6 (transfer of permits: underreporting discovered after transfer), to the operator of the installation or to a transferring operator (as defined in paragraph 7(1) of Schedule 6) has been complied with or the regulator considers that there is no reasonable prospect of the notice being complied with.

(2) The regulator must instruct the registry administrator to close the operator holding account for the installation.

(3) The registry administrator must give notice to the operator of the installation as soon as reasonably practicable after the account is closed.

Closure of aircraft operator holding accounts

28

(1) This paragraph applies where—

(a) the regulator is satisfied under article 34P that a person has ceased to perform aviation activity and there is no realistic prospect that the person will resume aviation activity;

(b) the person has complied with the requirements of article 34(1) or the regulator considers that there is no reasonable prospect of the requirements being complied with; and

(c) where relevant, any notice given under article 34V (return of allowances: notice to operator, etc.) , or any deficit notice given under article 44A, to the person has been complied with or the regulator considers that there is no reasonable prospect of the notice being complied with.

(2) The regulator must instruct the registry administrator to close the aircraft operator holding account.

(3) The registry administrator must give notice to the person as soon as reasonably practicable after the account is closed.

Closure of trading accounts

29

(1) Where the account holder of a trading account instructs the registry administrator to close the account, the registry administrator must close the account—

(a) within 14 days after receiving the instruction; or

(b) if there are allowances in the account at the date on which the instruction is received, as soon as reasonably practicable after the allowances are transferred to another account.

(2) Where a trading account has been suspended, the registry administrator may close the account if the registry administrator considers that the circumstances giving rise to the suspension still exist and are unlikely to be resolved within a reasonable period of time.

(3) Where no transfers have been made to or from a trading account for a period of at least 1 year, the registry administrator may give notice to the account holder that the trading account will be closed; and if the account holder does not object in writing to the closure within 60 days after the date on which the notice is given, the registry administrator may close the account.

(4) The registry administrator must give notice to the account holder as soon as reasonably practicable after the account is closed under sub-paragraph (2) or (3).

(5) A notice following the closure of an account under sub-paragraph (2) must include the reason for the closure unless the registry administrator considers that its inclusion might prejudice the investigation or prosecution of an offence under the law of any part of the United Kingdom or a country or territory outside the United Kingdom or would be contrary to the interests of national security.

Balance in accounts to be closed

30

(1) This paragraph applies where there are allowances in an account that is to be closed under paragraph 27, 28 or 29(2) or (3).

(2) Subject to sub-paragraph (3), the registry administrator must give notice to the account holder, requiring the account holder to transfer the allowances to another account on or before a date set out in the notice; and if the account holder does not comply with the notice, the registry administrator must transfer the allowances to a general holding account before closing the account.

(3) If the account to be closed has been suspended, the registry administrator must transfer the allowances to a general holding account before closing the account.

Free allocation for former hospital or small emitters and ultra-small emitters

34HA

Schedule 8A (free allocation for former hospital or small emitters and ultra-small emitters) has effect.

20A

Article 43 (4)(c) is to be read as if for “Commission” there were substituted “UK ETS authority”.

Reportable emissions and aviation emissions to be recorded in registry

6A

(1) The regulator and the registry administrator must exercise their functions to ensure that the following provisions of this paragraph are complied with.

(2) Where the operator of an installation submits a report of the installation’s reportable emissions to the regulator in accordance with a condition of a greenhouse gas emissions permit included under paragraph 4(2)(b) of Schedule 6, the reportable emissions stated in the report must be recorded in the operator holding account for the installation on or before 30th April in the year in which the report is submitted.

(3) Where an aircraft operator submits a report of the aircraft operator’s aviation emissions to the regulator in accordance with article 33, the aviation emissions stated in the report must be recorded in the aircraft operator’s aircraft operator holding account on or before 30th April in the year in which the report is submitted.

(4) Where the regulator makes a determination of emissions under article 45 of—

(a) an installation for any period for which a greenhouse gas emissions permit for the installation is in force; or

(b) an aircraft operator,

the reportable emissions or aviation emissions so determined must be recorded in the operator holding account for the installation or, as the case may be, the aircraft operator’s aircraft operator holding account within 1 month after the date on which notice of the determination is given under paragraph (5) of that article.

Suspension of registry due to security concerns

Suspension of registry for technical reasons

Exemption from liability

8A

(1) Each of the following is exempt from liability in damages for anything done or omitted in the exercise or purported exercise of functions conferred or imposed on the UK ETS authority or the registry administrator under this Schedule—

(a) a national authority;

(b) a person referred to in article 9(1) (meaning of regulator).

(2) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith; or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Capacity increases: application to increase emissions targets

19A

(1) Where a capacity increase is put into operation at an installation after the reference date, the operator of the installation may apply to the regulator to increase the installation’s emissions targets for scheme years after the capacity increase is put into operation (including, if the capacity increase is put into operation on or after 1st January 2021, for the scheme year in which the capacity increase is put into operation).

(2) An application may be made to increase emissions targets for scheme years in the 2021-2025 allocation period or the 2026-2030 period (or both).

(3) But an application may not be made to increase an emissions target—

(a) for the 2021 or 2022 scheme year if the emissions target for that year was calculated under paragraph 16(4)(a) or (5)(a) or (b);

(b) for the 2026 or 2027 scheme year if the emissions target for that year was calculated under paragraph 17(4)(a) or (5)(a) or (b).

(4) Nor may an application be made to increase an emissions target—

(a) for the 2021 scheme year unless the application is made on or before 31st March 2022;

(b) for any other scheme year unless the application is made on or before the later of—

(i) the end of the scheme year; and

(ii) where the capacity increase is put into operation in the scheme year, 3 months after the date on which the capacity increase is put into operation.

(5) Subject to sub-paragraph (4), an application to increase emissions targets may be made at any time.

(6) Where an application is made to increase an installation’s emissions targets for scheme years in the 2027-2030 allocation period, the regulator must not consider the application before 1st February 2026 unless, before that date, benchmarks for the 2027-2030 allocation period are set out in Annex 8 to the Free Allocation Regulation.

Capacity increases: content of application

19B

(1) For the purpose of an application to increase an installation’s emissions targets, the operator must divide the installation into sub-installations in accordance with Article 10 of the Free Allocation Regulation.

(2) The application must contain the following—

(a) evidence of the capacity increase and the sub-installation to which it relates, including evidence that it has been put into operation and is not temporary;

(b) evidence of any capacity decrease at the installation since the reference date and the sub-installation to which it relates, including, where relevant, evidence that it is temporary;

(d) where the capacity increase or any capacity decrease relates to a district heating sub-installation or a heat benchmark sub-installation of an installation that consumes or exports measurable heat produced outside the installation, evidence of whether or not the capacity increase or capacity decrease is solely associated with measurable heat produced at the installation.

Capacity increases: grant of application

19C

(1) An application to increase an installation’s emissions targets may be granted only if the regulator considers that—

(a) a capacity increase has been put into operation at the installation;

(b) the capacity increase is not temporary; and

(c) the net change in installed capacity at the installation since the reference date (see paragraph 19D) is greater than zero.

(2) Where the application is granted, the regulator must—

(a) calculate new emissions targets for each scheme year for which the application is made by increasing the existing emissions target for the scheme year by the increase in the emissions target for the scheme year (see paragraph 19E); and

(b) vary the installation’s hospital or small emitter permit under paragraph 6 of Schedule 6 by substituting the new emissions targets for the existing targets.

(3) Except where the installation is a hospital-qualifying installation, if increasing the emissions target for a scheme year would result in an emissions target that exceeds the maximum amount, the emissions target must be increased by such amount as results in an emissions target of the maximum amount.

(4) Where, after calculating new emissions targets and varying the permit under sub-paragraph (2), the regulator considers that, as a result of incorrect or incomplete evidence in the application, either the application would not have been granted or the installation’s emissions targets would not have been increased to the same extent—

(a) the regulator may, for the current and future scheme years, determine that the emissions targets should not have been increased or, as the case may be, recalculate the new emissions targets under sub-paragraph (2)(a); and

(b) if the regulator does either of the things referred to in paragraph (a), the regulator must vary the permit under paragraph 6 of Schedule 6 accordingly.

Capacity increases: net change in installed capacity at installation since reference date

19D

(1) The net change in installed capacity at the installation since the reference date must be calculated as follows.

Step 1Calculate the following for each relevant sub-installation—the net change in installed capacity at the relevant sub-installation since the reference date x the benchmark for the sub-installation.

Step 2Add up all calculations done under Step 1.The net change in installed capacity at the installation since the reference date is the result of Step 2.2For the purposes of sub-paragraph (1)—athe net change in installed capacity at a relevant sub-installation must be determined by taking into account only capacity increases and capacity decreases (other than capacity decreases that are temporary) that relate to the sub-installation since the reference date;bwhere capacity decreases exceed capacity increases at a sub-installation, the net change in installed capacity must be a negative value;cin calculating the net change in installed capacity at a district heating sub-installation or a heat benchmark sub-installation of an installation that consumes or exports measurable heat produced outside the installation, any capacity increase or capacity decrease that relates to the sub-installation must not be taken into account unless it is solely associated with measurable heat produced at the installation.3In this paragraph, “relevant sub-installation” means—athe sub-installation to which the capacity increase relates;bany other sub-installation to which a capacity decrease at the installation since the reference date relates.

Capacity increases: increase in emissions targets for scheme years

19E

(1) The increase in an installation’s emissions target for each scheme year for which the application is made is NC x CCUF x RF x FYF, where—

NC is the net change in installed capacity at the installation since the reference date (see paragraph 19D);

CCUF is the combined capacity utilisation factor (see paragraph 19F);

RF is the reduction factor for the scheme year;

FYF is the first year factor.

(2) The reduction factor—

(a) for a scheme year set out in column 1 of table D in paragraph 16 is the value set out in the corresponding entry in column 2;

(b) for a scheme year set out in column 1 of table E in paragraph 17 is the value set out in the corresponding entry in column 2.

(3) The first year factor is—

(a) for the scheme year in which the capacity increase is put into operation, (Y-D)/Y;

(b) for any other scheme year, 1.

(4) For the purposes of sub-paragraph (3)—

(a) Y is the number of days in the scheme year;

(b) D is the number of days in the scheme year before the date on which the capacity increase is put into operation.

(5) Where an application is made in respect of two or more capacity increases, for the purpose of calculating the first year factor, the capacity increases must be treated as being put into operation on the date on which the last capacity increase is put into operation.

Capacity increases: combined capacity utilisation factor

19F

(1) The combined capacity utilisation factor must be calculated as follows.

Step 1Calculate the following for each sub-installation to which the capacity increase relates—the capacity increase x the benchmark for the sub-installation x the capacity utilisation factor.

Step 2Add up all calculations done under Step 1.

Step 3Calculate the following for each sub-installation to which the capacity increase relates—the capacity increase x the benchmark for the sub-installation.

Step 4Add up all calculations done under Step 3.

Step 5Divide the result of Step 2 by the result of Step 4.The combined capacity utilisation factor is the result of Step 5.2In calculating the combined capacity utilisation factor, a capacity increase that relates to a district heating sub-installation or a heat benchmark sub-installation of an installation that consumes or exports measurable heat produced outside the installation must not be taken into account unless it is solely associated with measurable heat produced at the installation.3Where an application is made in respect of two or more capacity increases that relate to the same sub-installation, for the purpose of calculating the combined capacity utilisation factor, the calculations under Steps 1 and 3 must be done separately for each such capacity increase as if the capacity increases related to separate sub-installations.4In this paragraph, “capacity utilisation factor”, in relation to a capacity increase, means the expected level of production or consumption, expressed as a proportion of the increase in installed capacity.

Capacity increases: interpretation

19G

(1) In this paragraph and paragraphs 19A to 19F—

“benchmark” means—in relation to a sub-installation other than a process emissions sub-installation, the benchmark referred to in Article 16(2) of the Free Allocation Regulation used to determine the preliminary annual number of allowances allocated free of charge in respect of the sub-installation—where an application is made to increase an installation’s emissions targets for scheme years in the 2021-2025 allocation period or the 2026 scheme year, for scheme years in that allocation period or that scheme year;where an application is made to increase an installation’s emissions targets for scheme years in the 2027-2030 allocation period, for scheme years in that allocation period;in relation to a process emissions sub-installation, 0.97;

“capacity decrease”, in relation to an installation or a sub-installation, means a decrease in installed capacity as a result of one or more physical changes relating to its technical configuration and functioning;

“capacity increase”, in relation to an installation or a sub-installation, means an increase in installed capacity as a result of one or more physical changes relating to its technical configuration and functioning;

“district heating sub-installation” has the meaning given in point (5) of Article 2(1) of the Free Allocation Regulation;

“fuel benchmark sub-installation” has the meaning given in point (6) of Article 2(1) of the Free Allocation Regulation;

“heat benchmark sub-installation” has the meaning given in point (3) of Article 2(1) of the Free Allocation Regulation;

“installed capacity” means the maximum capacity—in the case of a product benchmark sub-installation, for producing a product;in the case of a district heating sub-installation or a heat benchmark sub-installation, for producing measurable heat;in the case of a fuel benchmark sub-installation, for consuming fuel;in the case of a process emissions sub-installation, for producing the emissions referred to in point (10) of Article 2(1) of the Free Allocation Regulation;

“measurable heat” has the meaning given in point (7) of Article 2(1) of the Free Allocation Regulation;

“process emissions sub-installation” has the meaning given in point (10) of Article 2(1) of the Free Allocation Regulation;

“product benchmark sub-installation” has the meaning given in point (2) of Article 2(1) of the Free Allocation Regulation;

“reference date” must be determined in accordance with sub-paragraphs (2) to (5);

“sub-installation” means a district heating sub-installation, a fuel benchmark sub-installation, a heat benchmark sub-installation, a process emissions sub-installation or a product benchmark sub-installation.

(2) Where an application is to increase an installation’s emissions targets for scheme years in the 2021-2025 allocation period, the reference date is—

(a) where a regulated activity began to be carried out at the installation before 2018, 31st December 2018;

(b) where a regulated activity began to be carried out at the installation in 2018, 31st December 2019;

(3) But if the installation’s emissions targets for scheme years in the 2021-2025 allocation period were increased following an application in respect of a previous capacity increase, the reference date is the date on which the last such capacity increase was put into operation.

(4) Where an application is to increase an installation’s emissions targets for scheme years in the 2026-2030 period, the reference date is—

(a) where a regulated activity begins to be carried out at the installation before 2023, 31st December 2023;

(b) where a regulated activity begins to be carried out at the installation in 2023, 31st December 2024;

(5) But if the installation’s emissions targets for scheme years in the 2026-2030 period were increased following an application in respect of a previous capacity increase, the reference date is the date on which the last such capacity increase was put into operation.

(6) For the purpose of calculating the net change in installed capacity at an installation since the reference date under paragraph 19D or the combined capacity utilisation factor under paragraph 19F, a capacity increase or a capacity decrease at a sub-installation must be expressed in the following units—

(a) if the capacity increase or capacity decrease relates to a product benchmark sub-installation, tonnes of product produced per year;

(b) if the capacity increase or capacity decrease relates to a district heating sub-installation or a heat benchmark sub-installation, terajoules of measurable heat produced per year;

(c) if the capacity increase or capacity decrease relates to a fuel benchmark sub-installation, terajoules of fuel consumed per year;

(d) if the capacity increase or capacity decrease relates to a process emissions sub-installation, tonnes of carbon dioxide equivalent emitted per year.

Emissions targets: banking overachieved target

Emissions targets: targets for 2026-2030 period for hospital or small emitters in 2021-2025 allocation period

Emissions targets: errors

SCHEDULE8A — Free allocation for former hospital or small emitters and ultra-small emitters

Interpretation

1

In this Schedule—

“baseline period” has the meaning given in point (14) of Article 2(1) of the Free Allocation Regulation;

“eligible scheme year” means—the first eligible scheme year;any subsequent scheme year in the relevant allocation period;

“first eligible scheme year” means—if the relevant notice is a conversion notice under paragraph 23 or 23A of Schedule 7, the scheme year following the year in which the conversion notice is given;if the relevant notice is a notice under paragraph 7 of Schedule 8—where the notice is given in the scheme year following the excess year (as defined in sub-paragraph (1) of that paragraph), the scheme year following the year in which the notice is given;where the notice is given after the scheme year following the excess year, the scheme year in which the relevant date (as defined in sub-paragraph (3)(c)(ii) of that paragraph) falls;

“relevant allocation period” means the allocation period that the first eligible scheme year is in;

“relevant notice” has the meaning given in paragraph 2(a);

“start of normal operation” has the meaning given in point (12) of Article 2(1) of the Free Allocation Regulation;

“sub-installation” has the same meaning as in the Free Allocation Regulation.

Application

2

This Schedule applies to an installation if—

(a) the regulator gives to the operator of the installation either of the following notices (in either case, the “relevant notice”)—

(i) a conversion notice under paragraph 23 or 23A of Schedule 7;

(ii) except where paragraph 7(5) of Schedule 8 applies, a notice under paragraph 7 of that Schedule; and

(b) the UK ETS authority informed the regulator under Article 15a(4) of the Free Allocation Regulation that an application for free allocation in the relevant allocation period in respect of the installation was valid.

Monitoring methodology plan to be submitted for approval , etc.

3

(1) If the operator of the installation wants free allocation in respect of the installation for eligible scheme years, the operator must submit to the regulator—

(a) within 2 months after the date on which the relevant notice is given, the monitoring methodology plan previously submitted under the Free Allocation Regulation together with either—

(i) any modifications necessary to ensure that the plan complies with Article 8 of, and Annex 6 to, that Regulation; or

(ii) a statement that no such modifications are necessary;

(b) where relevant, within 6 months after the date on which the relevant notice is given, a report on any sub-installation at the installation that did not operate for a full calendar year after the start of normal operation during the baseline period but has operated for a full calendar year after the start of normal operation at the date on which the relevant notice is given containing—

(i) the information referred to in Article 3(2) of the Activity Level Changes Regulation for the first full calendar year of operation that is verified as satisfactory in accordance with the Verification Regulation 2018 as if the report were an activity level report submitted under Article 3(3) of the Activity Level Changes Regulation; and

(ii) the verifier’s confirmation that the monitoring methodology plan, so far as it is used as a basis for the report, is compliant with the Free Allocation Regulation.

(2) Where the monitoring methodology plan and any modifications or a statement are submitted under sub-paragraph (1), the plan (with any modifications) must be treated as if it had been submitted to the regulator for approval under Article 8 of the Free Allocation Regulation.

(3) Article 3(4) to (8) of the Activity Level Changes Regulation apply to a report under sub-paragraph (1)(b) as they apply to an activity level report required by that Article, with the following modifications—

(a) references to the time limit for submitting the activity level report are to be read as references to the period of 6 months referred to in sub-paragraph (1)(b);

(b) Article 3(8)(a) is to be read as if the reference to Article 3a were a reference to paragraph 4(2)(za) of this Schedule.

Calculation and approval of final allocation

4

(1) This paragraph applies where—

(a) either—

(i) the installation’s hospital or small emitter permit is converted into a greenhouse gas emissions permit; or

(ii) a greenhouse gas emissions permit is issued for the installation; ...

(b) a monitoring methodology plan is approved in relation to the installation under Article 8 of the Free Allocation Regulation ; and

(i) a report on every sub-installation referred to in paragraph 3(1)(b) in accordance with that paragraph; or

(ii) a statement that no such report is required.

(2) The regulator must as soon as reasonably practicable—

(za) where relevant, determine the historical activity level of every sub-installation referred to in paragraph 3(1)(b) in accordance with Article 17(1) of the Free Allocation Regulation;

(a) calculate the final annual number of allowances to be allocated in respect of the installation and of each sub-installation of the installation for each eligible scheme year , subject to paragraph 4(9) and (10);

(b) send the determination (if any) and calculation to the UK ETS authority.

(3) The final annual number of allowances to be allocated in respect of a sub-installation for an eligible scheme year is the preliminary annual number of allowances to be allocated for the scheme year multiplied by the reduction factor for the scheme year (as defined in Article 18a(11) of the Free Allocation Regulation), where—

(a) for sub-installations referred to in paragraph 3(1)(b), the preliminary annual number of allowances must be calculated in accordance with Article 18(1) of the Free Allocation Regulation;

(b) for all other sub-installations, the preliminary annual number of allowances is the number previously calculated under Article 16 of the Free Allocation Regulation (including any corrections required under Article 16(11)).

(4) But where the relevant notice is a notice under paragraph 7 of Schedule 8 and the first eligible scheme year is the scheme year referred to in paragraph (b)(ii) of the definition of that term in paragraph 1 of this Schedule, the final annual number of allowances to be allocated in respect of a sub-installation for the first eligible scheme year is the number calculated under sub-paragraph (3) of this paragraph multiplied by D/Y, where—

D is the number of days in the first eligible scheme year after the date on which the installation’s greenhouse gas emissions permit comes into force;

Y is the number of days in the first eligible scheme year.

(5) The final annual number of allowances to be allocated in respect of an installation for an eligible scheme year is the sum of the final annual number of allowances to be allocated in respect of all sub-installations of the installation for the scheme year.

(6) On receipt of the determination (if any) and calculation, the UK ETS authority must as soon as reasonably practicable—

(a) approve the final annual number of allowances to be allocated in respect of the installation, making any corrections to the calculation (including, in the case of a sub-installation referred to in paragraph 3(1)(b), to the historical activity level and preliminary annual number of allowances) that the UK ETS authority considers appropriate;

(b) inform the regulator accordingly.

(7) The regulator must give notice to the operator of the final annual number of allowances approved under sub-paragraph (6).

(8) For the purpose of the calculations referred to in sub-paragraphs (3) to (5), the number of allowances to be allocated in respect of sub-installations and installations must be expressed as the nearest integer, taking 0.5 as nearest to the previous integer.

(9) Where the benchmarks for the 2028, 2029 and 2030 scheme years have not been adopted under Article 16(13)(b)(ii) or 18(9)(b)(ii) of the Free Allocation Regulation on or before 30 September 2026—

(a) the calculation referred to in paragraph 4(2)(a) of the final annual number of allowances to be allocated for any of the 2028, 2029 and 2030 scheme years must be undertaken by the regulator on or after 1st October 2027; and

(b) where the UK ETS authority approved the final number of allowances to be allocated in respect of the installation for the 2027 scheme year and an ALC adjustment applies to a sub-installation of the installation for the 2027 scheme year, the regulator must—

(i) make an equivalent adjustment to the final number of allowances to be allocated in respect of that sub-installation for the 2028, 2029 and 2030 scheme years; and

(ii) reflect this adjustment in the final number of allowances to be allocated in respect of the installation which the sub-installation forms part of.

(10) Where—

(a) the regulator has calculated the final annual number of allowances to be allocated in respect of the installation and each sub-installation for any scheme year in the 2027-2030 allocation period under paragraph 4(2)(a);

(b) the installation has at least one UK CBAM sub-installation within the meaning of Article 2(27) of the Free Allocation Regulation; and

(i) a different factor is provided for under Article 16(14) of the Free Allocation Regulation; or

(ii) the product benchmark or PRODCOM code of the product produced in a sub-installation that is not a UK CBAM sub-installation for the 2027-2030 allocation period is subsequently added to the relevant table in Annex 9 to the Free Allocation Regulation;

the regulator must recalculate the final number of allowances to be allocated in the relevant period in respect of that installation in accordance with paragraph 4(3) or (4), and (5).

(11) Where paragraph 4(10) applies and an ALC adjustment applies to the UK CBAM sub-installation for the scheme year immediately preceding the relevant period, the regulator must—

(a) make an equivalent adjustment to the final number of allowances to be allocated in the relevant period for the UK CBAM sub-installation; and

(b) reflect this adjustment in the final annual number of allowances to be allocated in the relevant period in respect of the installation which that UK CBAM sub-installation forms part of.

(12) Subject to paragraph 4(13), in paragraph 4(10) and (11), “relevant period” means—

(a) in the case of paragraph (10)(c)(i)—

(i) the period beginning with the scheme year for which the factor has changed under Article 16(14) of the Free Allocation Regulation and ending with the 2030 scheme year; or

(ii) where the scheme year for which the factor has changed is 2030, the 2030 scheme year;

(b) in the case of paragraph (10)(c)(ii)—

(i) the period beginning with the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table in Annex 9 to the Free Allocation Regulation and ending with the 2030 scheme year; or

(ii) where the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table is 2030, the 2030 scheme year.

(13) Where paragraph 4(9) applies and either of the following circumstances apply “relevant period” means the 2027 scheme year—

(a) the scheme year for which the factor has changed under Article 16(14) of the Free Allocation Regulation is 2027; or

(b) the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table in Annex 9 to the Free Allocation Regulation is 2027.

(14) In paragraph 4(9)(b) and (11) an “ALC adjustment” means an adjustment to free allocation under the Activity Level Changes Regulation approved by the UK ETS authority under Article 6a of that Regulation.

Modifications to Activity Level Changes Regulation

5

(1) Where an installation to which this Schedule applies becomes an FA installation, the Activity Level Changes Regulation has effect with the following modifications.

(2) Article 3 is to be read as if—

(a) in paragraph 1 for “In 2021, this report” there were substituted “In the first eligible scheme year (within the meaning of Schedule 8A to the UK ETS Order), this report”;

(b) in paragraph 3 for “on or before 30 June in the 2021 scheme year” there were substituted “on or before 31 March in the first eligible scheme year (or, if later, within 3 months after the date on which the final annual number of allowances to be allocated in respect of the installation is approved under paragraph 4(6) of Schedule 8A to the UK ETS Order)”.

Failure to comply with notice to return allowances

64A

(1) A person is liable to a civil penalty where the person fails to comply (or to comply on time) with the requirements of a notice (the “notice to return allowances”) given under article 34V.

(2) The civil penalty is—

(a) £20,000; and

(b) a daily penalty at a daily rate of £1,000 for each day that the person fails to comply with the requirements of the notice to return allowances, beginning with the day on which the initial notice is given.

Failure to comply with enforcement notice ......

Failure to comply with information notice

Providing false or misleading information, etc.

Inspection: refusal to allow access to premises

Power to publish UK ETS information

75BA

(1) The UK ETS authority may publish information held or obtained under UK ETS legislation—

(a) to ensure the effective operation of the UK ETS;

(b) to inform the public about the operation of the UK ETS.

(2) But the UK ETS authority may not publish information under paragraph (1) that the UK ETS authority considers may be commercially sensitive unless the UK ETS authority considers that the publication of the information is proportionate to what is sought to be achieved by it.

(3) In this article, “UK ETS legislation” has the meaning given in article 75B(4).

National security

Crown application

Transitional provisions

38A

Annex 5 is to be read as if in Table 1 in the eighth row (scrubbing (urea))—

(a) in the entry in the column headed “net calorific value” for “1” there were substituted “n.a.”;

(b) in the entry in the column headed “oxidation factor” for “1” there were substituted “n.a.”;

38B

(1) Annex 6 is to be read as if in section 3 for Table 6 there were substituted—

Gas	Global warming potential
N₂O	265 t CO2(e) /t N₂O
CF₄	6 630 t CO2(e)/t CF₄
C₂F₆	11 100 t CO2(e)/t C₂F₆

(2) The modifications made by sub-paragraph (1) have effect in relation to the 2023 and subsequent scheme years.

PART 4 — Publication of information from registry

Information about accounts: operator and aircraft operator holding accounts and trading accounts

31

(1) The UK ETS authority must publish information about each of the following accounts (including closed accounts)—

(a) operator holding accounts;

(b) aircraft operator holding accounts;

(2) The information is—

(a) the account holder’s name;

(b) the type of account;

(d) if the account is an operator holding account, the information referred to in paragraph 32;

(e) if the account is an aircraft operator holding account, the information referred to in paragraph 33;

(f) if the account is a trading account, the account holder’s address.

(3) The UK ETS authority must—

(a) publish the information as soon as reasonably practicable after this paragraph comes into force;

(b) publish updated information from time to time and in any event at least once a year as soon as reasonably practicable after 1st May.

(4) This paragraph is subject to article 75C (national security).

Information about accounts: operator holding accounts

32

(1) In the case of an operator holding account, the information is—

(a) the identifier used in the registry for the installation to which the account relates;

(b) the regulator for the installation;

(d) the first scheme year for which the installation’s reportable emissions are recorded in the account;

(e) if the account is closed, the last scheme year for which the installation’s reportable emissions are recorded in the account;

(f) the number of allowances allocated free of charge in respect of the installation for each scheme year;

(g) the installation’s reportable emissions in each scheme year, and the installation’s total reportable emissions in the trading period, recorded in the account as at the relevant date;

(h) the total number of allowances transferred from the account to the surrender account (excluding transfers that have subsequently been reversed) as at the relevant date;

(i) the code (known as the “static compliance code”) generated in the registry from the information recorded in the account as at the relevant date, and the key to that code, indicating which one of the statuses referred to in sub-paragraph (2) applies.

(2) The statuses are that—

(a) a regulated activity did not begin to be carried out at the installation by the end of the scheme year preceding the relevant date;

(b) paragraph (a) does not apply and the installation’s reportable emissions in the scheme year preceding the relevant date are not recorded in the account as at the relevant date;

(c) neither paragraph (a) nor (b) applies and the total number of allowances referred to in sub-paragraph (1)(h) is greater than or equal to the installation’s total reportable emissions in the trading period recorded in the account as at the relevant date;

(d) neither paragraph (a) nor (b) applies and the total number of allowances referred to in sub-paragraph (1)(h) is less than the installation’s total reportable emissions in the trading period recorded in the account as at the relevant date.

(3) In this paragraph, “relevant date” means the 1st May preceding the date of publication of the information or updated information.

Information about accounts: aircraft operator holding accounts

33

(1) In the case of an aircraft operator holding account, the information is—

(a) the account holder’s Eurocontrol Central Route Charges Office identification number;

(b) the regulator of the account holder;

(d) the first scheme year for which the account holder’s aviation emissions are recorded in the account;

(e) if the account is closed, the last scheme year for which the account holder’s aviation emissions are recorded in the account;

(f) the number of allowances allocated free of charge to the account holder for each scheme year;

(g) the account holder’s aviation emissions in each scheme year, and the account holder’s total aviation emissions in the trading period, recorded in the account as at the relevant date;

(h) the total number of allowances transferred from the account to the surrender account (excluding transfers that have subsequently been reversed) as at the relevant date;

(i) the code (known as the “static compliance code”) generated in the registry from the information recorded in the account as at the relevant date, and the key to that code, indicating which one of the statuses referred to in sub-paragraph (2) applies.

(2) The statuses are that—

(a) the account holder is not an aircraft operator in relation to the scheme year preceding the relevant date;

(b) paragraph (a) does not apply and the account holder’s aviation emissions in the scheme year preceding the relevant date are not recorded in the account as at the relevant date;

(c) neither paragraph (a) nor (b) applies and the total number of allowances referred to in sub-paragraph (1)(h) is greater than or equal to the account holder’s total aviation emissions in the trading period recorded in the account as at the relevant date;

(d) neither paragraph (a) nor (b) applies and the total number of allowances referred to in sub-paragraph (1)(h) is less than the account holder’s total aviation emissions in the trading period recorded in the account as at the relevant date.

(3) In this paragraph, “relevant date” means the 1st May preceding the date of publication of the information or updated information.

Information about transfers of allowances

34

(1) The UK ETS authority must publish the information referred to in sub-paragraph (1A) about each completed transfer of allowances from one account to another (other than a transfer from a central account to another central account).

(1A) The information is—

(a) the name of the account holder, type of account and unique account identifier of the account from which the allowances are transferred;

(b) the name of the account holder, type of account and unique account identifier of the account to which the allowances are transferred;

(d) which one of the following categories the transfer falls into—

(i) a transfer from the allocation account (free allocation under Part 4A);

(ii) the reversal of a transfer from the allocation account (see paragraph 22(6));

(iii) the return of allowances to which a person is not entitled (as set out in article 34S(3) or 34T(3)) in accordance with a notice under article 34U or 34V or returned voluntarily without the need for such a notice to be given;

(iv) a transfer to the auction delivery account;

(v) the return of allowances transferred in error under the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (see regulation 48 of those Regulations);

(vi) a transfer of allowances following the grant of an application to transfer a greenhouse gas emissions permit (see paragraph 12);

(vii) a transfer to the deletion account (see paragraph 23);

(viii) the reversal of a transfer to the deletion account (see paragraph 22(2));

(ix) a transfer to the surrender account (see paragraph 24);

(x) the reversal of a transfer to the surrender account (see paragraph 22(3));

(xi) a transfer of allowances from an account to be closed (see paragraph 30);

(xii) any other transfer of allowances;

(e) the date and time when the transfer completed;

(f) the reference for the transfer used in the registry.

(1B) The unique account identifier of an account that is required to be published under sub-paragraph (1A) must not be the account number or an identifier from which the account number can be derived.

(2) Information about transfers completing in the period beginning with 1st January 2021 and ending with 30th April 2022 must be published as soon as reasonably practicable after 30th April 2025.

(3) Information about transfers completing in the 12-month period ending with 30th April 2023, and in each subsequent 12-month period ending with 30th April, must be published as soon as reasonably practicable after 3 years have elapsed since the end of the 12-month period.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This paragraph is subject to article 75C (national security).

Publication of emissions targets and reportable emissions

22A

(1) The regulator must inform the UK ETS authority of—

(a) emissions targets (including any revised emissions targets) calculated by the regulator;

(b) the reportable emissions in each scheme year of every installation that is a hospital or small emitter for the scheme year that are reported to the regulator.

(2) The UK ETS authority must publish the information referred to in sub-paragraph (1) as soon as reasonably practicable after receiving it.

(3) This paragraph is subject to article 75C (national security).

End of hospital or small emitter status: voluntary exit of status for 2024 and 2025 scheme years

23A

(1) Where the operator of an installation included in the hospital and small emitter list for 2021-2025 wishes that the installation should not be a hospital or small emitter for the 2024 and 2025 scheme years, the operator may request the regulator to give a notice (a “conversion notice”) to the operator of the installation.

(2) If the regulator receives a request on or before 31st March 2023, the regulator must, as soon as reasonably practicable, give a conversion notice to the operator of the installation.

(3) The regulator must refuse a request received after 31st March 2023.

Conversion notices

End of hospital or small emitter status: ceasing to meet criteria: publication

Flexible reserve

23A

(1) The flexible reserve is a reserve of allowances for the trading period from which allowances may be allocated until the reserve is exhausted.

(2) The flexible reserve consists of the following—

(a) allowances equal to the sum of the amounts set out in paragraphs (i) and (ii), if the sum is greater than zero—

(i) 28,081,237;

(ii) the sum of A and C minus 53,294,847, where—

(aa) A is 240,342,255 (industry cap for 2021-2025 allocation period) minus B;

(bb) B is the final annual number of allowances approved by the UK ETS authority under Article 16b of the Free Allocation Regulation (final allocation at installation level for incumbent installations) to be allocated in respect of all installations for all scheme years in the 2021-2025 allocation period;

(cc) C is equal to the number of B that are not allocated or, if allocated, subsequently returned;

(b) allowances equal to the sum of D and F, where—

(i) D is—

(aa) 121,169,970 (industry cap for 2026-2030 ...) minus E; or

(bb) if E is greater than 121,169,970, zero;

(ii) E is the final annual number of allowances approved by the UK ETS authority under Article 16b of the Free Allocation Regulation or Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 to be allocated in respect of all installations for all scheme years in the 2026 allocation period and the 2027-2030 allocation period;

(iii) F is equal to the number of E that are not allocated or, if allocated, subsequently returned;

(c) allowances equal to the number of allowances representing aviation free allocation entitlement (within the meaning of Chapter 2 of Part 4A) approved by the UK ETS authority but not allocated or, if allocated, subsequently returned.

(3) For the purposes of paragraph (2)—

(a) any increase approved by the UK ETS authority under article 20(5) of the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2023 (free allocation for 2024 and 2025 scheme years: lime and malt extract) that in accordance with article 34B(3A) of this Order was required to be added to the amount included in column A of the allocation table for the 2021-2025 allocation period must be treated as if approved under Article 16b of the Free Allocation Regulation;

(b) a reference to allowances that are returned is a reference to allowances transferred or returned in accordance with a notice under article 34U or 34V or, in the case of other allowances to which a person is not entitled (as set out in article 34S(3) or 34T(3)), returned voluntarily without the need for such a notice to be given;

(c) E is recalculated as soon as reasonably practicable after the UK ETS authority has approved the recalculation under Article 16b(6) of the Free Allocation Regulation of the final number of allowances to be allocated for a scheme year in the 2027-2030 allocation period, and the flexible reserve is updated on the basis of this recalculated E.

(4) Allowances from the flexible reserve may be used—

(a) for free allocation in respect of incumbent installations (within the meaning of the Free Allocation Regulation) or in accordance with article 8 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025;

(b) for allocation under the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 or any other regulations made under section 96 of the Finance Act 2020.

Deficit notices

44A

(1) This article applies where—

(a) the operator of an installation fails to surrender allowances equal to the installation’s reportable emissions in a scheme year (the “relevant scheme year”), contrary to—

(i) article 27;

(ii) the requirements of a surrender notice under paragraph 11 of Schedule 6 (see paragraph 11(4)(b)(iii));

(iii) the requirements of a revocation notice under paragraph 12 of that Schedule (see paragraph 12(5)(b)(iii));

(b) a person who is an aircraft operator in relation to a scheme year (the “relevant scheme year”) fails to surrender allowances equal to the person’s aviation emissions in that year, contrary to article 34.

(2) The regulator may give a notice (a “deficit notice”) to the operator of the installation or to the person.

(3) The deficit notice must set out—

(a) the relevant scheme year and the installation’s reportable emissions, or the person’s aviation emissions, in that year;

(b) the number of allowances (if any) surrendered in compliance with article 27, the requirements of a surrender or revocation notice or article 34 (including any surrendered after the date by which allowances were required to be surrendered);

(c) the number of allowances representing the difference (the “deficit”) between allowances equal to the installation’s reportable emissions, or the person’s aviation emissions, in the relevant scheme year and the number referred to in sub-paragraph (b);

(d) the date (the “deficit surrender date”) on or before which the person to whom the notice is given must surrender allowances equal to the deficit;

(e) information about rights of appeal.

(4) The person to whom a deficit notice is given must surrender allowances equal to the deficit on or before the deficit surrender date.

(5) The regulator may withdraw a deficit notice at any time by giving notice of the withdrawal to the person to whom the deficit notice is given.

(6) A deficit notice may be given in respect of a failure to surrender allowances that arises before as well as after this article comes into force.

(7) In the case of a transfer of a permit under paragraph 9 of Schedule 6 (other than a partial transfer)—

(a) after the transfer date, a deficit notice may be given to the new operator only, including in respect of a failure to surrender allowances arising before the transfer date;

(b) where a deficit notice in respect of a failure to surrender allowances is given to the transferring operator before the transfer date and has not been complied with, a new deficit notice may be given to the new operator in respect of the same failure provided that the original notice is first withdrawn.

(8) A deficit notice may not be given—

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.