The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020

SCHEDULE 5 (1) The Verification Regulation 2018 is to be read as if— (a) for “…/…” in each place there were substituted “ 2019/331 ”; (b) for “competent authority” in each place there were substituted “ regulator ”; (c) Articles 56, 65 to 68, 74, 75, 78 and 79 were omitted; (d) the words “This Regulation shall be binding in its entirety and directly applicable in all Member States”, immediately following Article 79, were omitted, and subject to the following additional modifications. (2) Article 1 is to be read as if— (a) in the first subparagraph for “Directive 2003/87/EC” there were substituted “ the 2020 Order, Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 ”; (b) the second subparagraph were omitted. (3) Article 2 is to be read as if for “2019, reported pursuant to Article 14 of Directive 2003/87/EC” there were substituted “ 2021, reported pursuant to the 2020 Order and permits issued in accordance with it ”. (4) Article 3 is to be read as if— (a) for the words before point (1) there were substituted— In this Regulation, references to Implementing Regulation (EU) 2018/2066 are to that Regulation as modified by the Greenhouse Gas Emissions Trading Scheme Order 2020 (“the modified MRR”) and expressions used in both the modified MRR and this Regulation have the same meaning in this Regulation as they do in the modified MRR; in addition the following definitions apply for the purposes of this Regulation: (b) in point (2)— (i) for “a national” there were substituted “ the national ”; (ii) for “harmonised standards, within the meaning of point 9 of Article 2 of Regulation (EC) No 765/2008,” there were substituted “ EN ISO 14065:2013 ”; (c) in point (3)— (i) for “a national” there were substituted “ the national ”; (ii) the words “or a natural person otherwise authorised, without prejudice to Article 5(2) of that Regulation,” were omitted; (d) after point (3) there were inserted— (3a) ‘national accreditation body’ means the national accreditation body of the United Kingdom appointed in accordance with Article 4(1) of Regulation (EC) 765/2008 ; (e) after point (4) there were inserted— (4a) ‘Delegated Regulation (EU) 2019/331’ means the Free Allocation Regulation (as defined in the 2020 Order); (4b) ‘Implementing Regulation (EU) 2019/1842’ means the Activity Level Changes Regulation (as defined in the 2020 Order); (f) after point (6) there were inserted— (6a) ‘annual activity level report’ means a report submitted by an operator pursuant to Article 3(3) of Implementing Regulation (EU) 2019/1842; (g) for point (7) there were substituted— (7) ‘operator's or aircraft operator's report’ means the annual emission report to be submitted by the operator or aircraft operator pursuant to a permit issued in accordance with Schedule 6 or 7 to the 2020 Order or pursuant to article 33 of the 2020 Order, the baseline data report submitted by the operator pursuant to Article 4(2) of Delegated Regulation (EU) 2019/331, the new entrant data report submitted by the operator pursuant to Article 5(5) of that Regulation or the annual activity level report; (h) in point (13)— (i) in paragraph (a) “greenhouse gas emissions” were omitted; (ii) for paragraph (c) there were substituted— (c) for the purposes of verifying the baseline data report submitted by the operator pursuant to Article 4(2)(a) of Delegated Regulation (EU) 2019/331, the new entrant data report submitted by the operator pursuant to Article 5(5) of that Regulation or the annual activity level report, any act or omission of an act by the operator that is contrary to the requirements in the monitoring methodology plan; (i) in points (22) and (23) for “EU” in each place there were substituted “ UK ”; (j) in point (22) for “an” in the first place it occurs there were substituted “ a ”; (k) in point (26) for “a” in the second place it occurs there were substituted “ the ”; (l) after point (27) there were inserted— (27a) ‘monitoring methodology plan’ has the same meaning as in Delegated Regulation (EU) 2019/331; (m) after point (28) there were inserted— (28a) ‘baseline period’ has the same meaning as in Delegated Regulation (EU) 2019/331; (n) after point (29) there were inserted— (30) ‘activity level reporting period’ means the applicable period preceding the submission of the annual activity level report pursuant to Article 3(1) of Implementing Regulation (EU) 2019/1842. (5) Article 4 is to be read as if— (a) for the words from “the relevant harmonised standards” to “European Union” there were substituted “ EN ISO 14065:2013 ”; (b) for “the applicable harmonised standards” there were substituted “ those standards ”. (6) Article 5 is to be read as if for “bodies” there were substituted “ body ”. (7) Article 6 is to be read as if for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”. (8) Article 7 is to be read as if— (a) in paragraph 3 for “competent authorities responsible for Directive 2003/87/EC” there were substituted “ regulator ”; (b) in paragraph 4— (i) in point (a) for the words from “or in Annex IV” to the end there were substituted “ , in Annex IV to Delegated Regulation (EU) 2019/331 or in Article 3(2) of Implementing Regulation (EU) 2019/1842, as appropriate; ”; (ii) in point (b) “greenhouse gas emissions” were omitted; (iii) in point (c) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (c) in paragraph 5 for the words from “or with” to “that irregularity” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842, that irregularity ”; (d) in paragraph 6 for the second subparagraph there were substituted— If the monitoring methodology plan has not been approved by the regulator pursuant to Article 8 of Delegated Regulation (EU) 2019/331 or is incomplete, or if significant modifications referred to in Article 9(5) of that Regulation have been made which have not been approved by the regulator, the verifier must advise the operator to obtain the necessary approval from the regulator. (9) Article 10(1) is to be read as if— (a) in point (a) “greenhouse gas emissions” were omitted; (b) in point (h) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (c) in point (i) for the words from “and annual” to the end there were substituted “ under Directive 2003/87/EC and any previous allocation periods under the UK ETS, together with annual activity level reports of the previous years submitted to the competent authority for the purposes of Implementing Regulation (EU) 2019/1842 ”; (d) after point (k) there were inserted— (ka) if the monitoring methodology plan was modified, a record of all modifications in accordance with Article 9 of Delegated Regulation (EU) 2019/331; (e) in point (l) for “report referred to in Article 69(4)” there were substituted “ reports referred to in Article 69(1) and (4) ”; (f) after point (l) there were inserted— (la) where applicable, information on how the operator has corrected nonconformities or addressed recommendations of improvements that were reported in the verification report concerning an annual activity level report from the previous year or a relevant baseline data report; (g) in point (n) after “methodology plan” there were inserted “ as well as corrections of reported data ”; (h) in point (p)— (i) for “Directive 2009/31/EC” there were substituted “ the CCS licensing regime ”; (ii) for “required by that Directive and the reports required by Article 14 of that Directive” there were substituted “ and reports required by that regime ”. (10) Article 11(4) is to be read as if— (a) in point (b) the words from “or” to the end were omitted; (b) after point (b) there were inserted— (ba) whether there have been any modifications to the monitoring methodology plan during the baseline period or the activity level reporting period, as appropriate; (c) in point (c) for the words from “notified” to the end there were substituted “ notified to and, if required, approved by the regulator pursuant to Part 4 of or Schedule 6 to the 2020 Order ”; (d) in point (d) for the words from “point (b)” to the end there were substituted “ point (ba) have been notified to and, if required, approved by the regulator pursuant to Schedule 6 to the 2020 Order ”. (11) Article 13(1)(c) is to be read as if for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”. (12) Article 16(2) is to be read as if— (a) in point (b) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (b) in point (c) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (c) in point (d) “listed in Annex I to Directive 2003/87/EC” were omitted; (d) after point (f) there were inserted— (fa) for the purposes of verifying an annual activity level report, the accuracy of the parameters listed in Article 16(5), 19, 20, 21 or 22 of Delegated Regulation (EU) 2019/331 as well as data required under paragraphs 1, 2 and 4 of Article 6 of Implementing Regulation (EU) 2019/1842; (13) Article 17 is to be read as if— (a) in paragraph 3— (i) in the words before point (a) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (ii) in point (d) for “delegated acts adopted pursuant to Article 10b(5) of Directive 2003/87/EC” there were substituted “ Commission Delegated Decision (EU) 2019/708 ”; (iii) at the end there were inserted— (e) whether the energy consumption has been correctly attributed to each sub-installation where applicable; (f) whether the value of the parameters listed in Articles 16(5), 19, 20, 21 or 22 of Delegated Regulation (EU) 2019/331 is based on a correct application of that Regulation; (g) for the purposes of verifying an annual activity level report and a new entrant data report, the date of start of normal operation as referred to in Article 5(5) of Delegated Regulation (EU) 2019/331; (h) for the purposes of verifying an annual activity level report whether the parameters listed in points 2.3 to 2.7 of Annex IV to Delegated Regulation (EU) 2019/331, as appropriate to the installation, have been monitored and reported in the correct way in accordance with the monitoring methodology plan. (b) in paragraph 4 after “is not counted” there were inserted “ as emitted ”; (c) paragraph 5 were omitted. (14) Article 18 is to be read as if for paragraph 3 there were substituted— (3) Where data gaps in baseline data reports, new entrant data reports or annual activity level reports have occurred, the verifier shall check whether methods are laid down in the monitoring methodology plan to deal with data gaps pursuant to Article 12 of Delegated Regulation (EU) 2019/331, whether those methods were appropriate for the specific situation and whether they have been applied correctly. Where no applicable data gap method is laid down in the monitoring methodology plan, the verifier shall check whether the approach used by the operator to compensate for the missing data is based on reasonable evidence and ensures that the data required by Annex IV to Delegated Regulation (EU) 2019/331 or Article 3(2) of Implementing Regulation (EU) 2019/1842 are not underestimated or overestimated. (15) Article 21 is to be read as if— (a) in paragraph 4 for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (b) in paragraph 5 for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”. (16) Article 22 is to be read as if— (a) in paragraph 1— (i) in the first subparagraph for the words from “or Delegated” to “as appropriate” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 as appropriate ”; (ii) in the third subparagraph for the words from “or Delegated” to “has been identified” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 has been identified ”; (b) in paragraph 2 for the words from “or Delegated” to “that have” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 that have ”; (c) in paragraph 3 in the fourth subparagraph for the words from “or Delegated” to “in accordance” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 in accordance ”. (17) Article 23(4) is to be read as if in the words before point (a) for “or new entrant data reports” there were substituted “ , new entrant data reports or annual activity level reports ”. (18) Article 27 is to be read as if— (a) in paragraph 1 in the words before point (a) for “or new entrant data report” there were substituted “ , new entrant data report or annual activity level report ”; (b) in paragraph 3— (i) for point (f) there were substituted— (f) in the case of verification of a baseline data report or new entrant data report, unless the monitoring methodology plan has already been approved by the regulator, the verifier's confirmation that the monitoring methodology plan, so far as it is used as a basis for the report, is compliant with Delegated Regulation (EU) 2019/331; (ii) in point (g) for “per activity referred to in Annex 1 to Directive 2003/87/EC and per installation or aircraft operator” there were substituted “ per regulated activity and per installation or per aviation activity and per aircraft operator ”; (iii) after point (h) there were inserted— (ha) where it concerns the verification of the annual activity level report, aggregated annual verified data for each year in the activity level reporting period for each sub-installation for its annual activity level; (iv) in point (i) for “or baseline period” there were substituted “ , baseline period or activity level reporting period ”; (v) for point (o) there were substituted— (o) any issues of non-compliance with Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 which have become apparent during the verification; (vi) point (r) were omitted; (vii) after point (s) there were inserted— (sa) where the verifier has observed relevant changes to the parameters listed in Article 16(5), 19, 20, 21 or 22 of Delegated Regulation (EU) 2019/331 or changes in the energy efficiency pursuant to paragraphs 1, 2 and 3 of Article 6 of Implementing Regulation 2019/1842, a description of those changes and related remarks; (sb) where applicable, confirmation that the date of start of normal operation as referred to in Article 5(5) of Delegated Regulation (EU) 2019/331 has been checked; (viii) in point (t) for “EU” in both places there were substituted “ UK ”; (c) in paragraph 4— (i) in the words before point (a), for “or Delegated” to “in sufficient detail” there were substituted “ , Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 in sufficient detail ”; (ii) for point (a) there were substituted— (a) the size and nature of the misstatement, non-conformity or non-compliance with Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842; (iii) for point (d) there were substituted— (d) to which Article in Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 the non-compliance relates. (d) paragraph 5 were omitted. (19) Article 28 is to be read as if point (e) were omitted. (20) Article 29 is to be read as if after paragraph 1 there were inserted— (1A) For the purposes of the verification of the annual activity level report, the verifier shall assess whether the operator has corrected the non-conformities indicated in the verification report related to the corresponding baseline data report, the new entrant data report or the annual activity level report from the previous activity level reporting period. If the operator has not corrected those non-conformities, the verifier shall consider whether the omission increases or may increase the risk of misstatements. The verifier shall report in the verification report whether those non-conformities have been resolved by the operator. (21) Article 30(1)(e) is to be read as if for “and new entrant reports” there were substituted “ , new entrant data reports and annual activity level reports ”. (22) Article 31 is to be read as if— (a) in paragraph 1— (i) for “a” in the first place it occurs there were substituted “ the ”; (ii) in point (c) after “paragraph 3” there were inserted “ , read with paragraph 3b, ”; (b) in paragraph 3— (i) in point (a) after “emission report” there were inserted “ or annual activity level report ”; (ii) in point (b) at the beginning there were inserted “for the purposes of verifying the operator's emission report,”; (iii) after point (b) there were inserted— (ba) for the purposes of verifying the operator's annual activity level report, if a verifier has not carried out a site visit during the verification of an annual activity level report or a baseline data report in the two activity level reporting periods immediately preceding the current activity level reporting period; (iv) after point (c) there were inserted— (ca) if, during the activity level reporting period, there have been significant changes to the installation or its sub-installations which require significant modifications to the monitoring methodology plan, including those changes referred to in Article 9(5) of Delegated Regulation (EU) 2019/331; (c) after paragraph 3 there were inserted— (3A) The reference in point (b) of paragraph 3 to reporting periods immediately preceding the current reporting period includes reporting periods for the purposes of Directive 2003/87/EC. (3B) In respect of installations within Article 32(5), points (b) and (ba) of paragraph 3 apply as if, in each of those points, for “two” there were substituted “ four ”. (d) for paragraph 4 there were substituted— (4) Points (c) and (ca) of paragraph 3 are not applicable where, during the reporting period, there have been only modifications of the default value as referred to in Article 15(3)(h) of Implementing Regulation (EU) 2018/2066 or Article 9(5)(c) of Delegated Regulation (EU) 2019/331. (23) Article 32 is to be read as if— (a) in point (1) after “verification” there were inserted “ of an operator's emission report ”; (b) in point (2) after “verification” there were inserted “ of an operator's emission report ”; (c) in point (3) after “verification” there were inserted “ of an operator's emission report ”; (d) after point (3) there were inserted— (3a) the verification of an operator's annual activity level report concerns a category A installation referred to in Article 19(2)(a) of Implementing Regulation (EU) 2018/2066, a category B installation referred to in Article 19(2)(b) of that Implementing Regulation or an installation with low emissions as referred to in Article 47(2) of that Implementing Regulation and: (a) that installation's only sub-installation is one to which a product benchmark pursuant to Article 10(2) of Delegated Regulation (EU) 2019/331 is applicable; and (b) the production data relevant for the product benchmark has been evaluated as part of an audit for financial accounting purposes and the operator provides evidence of that; (3b) the verification of an operator's annual activity level report concerns a category A installation referred to in Article 19(2)(a) of Implementing Regulation (EU) 2018/2066, a category B installation referred to in Article 19(2)(b) of that Implementing Regulation or an installation with low emissions as referred to in Article 47(2) of that Implementing Regulation and: (a) the installation has no more than two sub-installations; (b) if the installation has two sub-installations, one contributes less than 5% to the installation's total final allocation of allowances; and (c) the verifier has sufficient data available to assess the split of sub-installations if relevant; (3c) the verification of an operator's annual activity level report concerns a category A installation referred to in Article 19(2)(a) of Implementing Regulation (EU) 2018/2066, a category B installation referred to in Article 19(2)(b) of that Implementing Regulation or an installation with low emissions as referred to in Article 47(2) of that Implementing Regulation and: (a) the installation has only heat benchmark or district heating sub-installations; and (b) the verifier has sufficient data available to assess the split of sub-installations if relevant; (e) in point (4)— (i) in the words before point (a) after “verification” there were inserted “ of the operator's emission report or annual activity level report ”; (ii) in paragraph (c) after “2018/2066” there were inserted “ or Article 11 of Delegated Regulation (EU) 2019/331 ”; (f) in point (5)— (i) in the words before point (a) after “verification” there were inserted “ of the operator's emission report or annual activity level report ”; (ii) in paragraph (b) after “2018/2066” there were inserted “ or Article 11 of Delegated Regulation (EU) 2019/331 ”; (g) at the end there were inserted— Point (3b) may not be applied if the sub-installation contributing 95% or more to the installation's total final allocation of allowances is a sub-installation to which a product benchmark pursuant to Article 10(2) of Delegated Regulation (EU) 2019/331 is applicable, unless the production data relevant for the product benchmark has been evaluated as part of an audit for financial accounting purposes and the operator provides evidence of that. (24) The Verification Regulation 2018 is to be read as if after Article 34 there were inserted— Where serious, extraordinary and unforeseeable circumstances, outside the control of the operator or aircraft operator, prevent the verifier from carrying out a physical site visit in accordance with Article 21(1) and where these circumstances cannot, after using all reasonable efforts, be overcome, the verifier may decide, subject to the approval of the regulator in accordance with the second and third subparagraph of this Article, to carry out a virtual site visit. The verifier shall take measures to reduce the verification risk to an acceptable level and carry out a physical visit to the site of the installation or aircraft operator without undue delay. The decision to carry out a virtual site visit shall be based on the outcome of the risk analysis and after determining that the conditions for carrying out a virtual site visit are met. The verifier shall inform the operator or aircraft operator thereof without undue delay. The operator or the aircraft operator shall submit an application to the regulator requesting the regulator to approve the verifier's decision to carry out a virtual site visit. On an application submitted by the operator or aircraft operator concerned, the regulator shall decide whether to approve the verifier's decision to carry out a virtual site visit, taking into consideration all of the following elements: (a) evidence that it is not possible to carry out a physical site visit because of the force majeure circumstances; (b) the information provided by the verifier on the outcome of the risk analysis; (c) information on how the virtual site visit will be carried out; (d) evidence that measures are taken to reduce the verification risk to an acceptable level. (25) Article 36 is to be read as if— (a) in paragraphs 2(b) and 6 for “EU” in each place there were substituted “ UK ”; (b) in paragraph 6 for “an” there were substituted “ a ”. (26) Article 37 is to be read as if— (a) in paragraph 2 for “an” there were substituted “ a ”; (b) in paragraphs 2 and 6 for “EU” in each place there were substituted “ UK ”; (c) in paragraph 5— (i) in the first subparagraph the second sentence were omitted; (ii) in the second subparagraph for “and new entrant data reports” there were substituted “ , new entrant data reports or annual activity level reports ”. (27) Article 38 is to be read as if— (a) for “EU ETS” in each place (including the heading) there were substituted “ UK ETS ”; (b) in paragraph 1 in the words before point (a), for “An” there were substituted “ A ”; (c) for paragraph 1(a) there were substituted— (a) knowledge of the 2020 Order, Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 and Implementing Regulation (EU) 2019/1842 in the case of verification of the baseline data report, new entrant data report or annual activity level report, this Regulation, relevant standards, and other relevant legislation and applicable guidelines; (d) in paragraph 2— (i) for “An” there were substituted “ A ”; (ii) for “an” there were substituted “ a ”. (28) Article 39(2) is to be read as if for “an EU” there were substituted “ a UK ”. (29) Article 40 is to be read as if for “EU” in each place there were substituted “ UK ”. (30) Article 41 is to be read as if “harmonised” were omitted in both places. (31) Article 42 is to be read as if “harmonised” were omitted in both places. (32) Article 43 is to be read as if— (a) in paragraph 1 at the end there were inserted “or under the trading scheme established by the 2020 Order”; (b) in paragraphs 2, 5 and 6 “harmonised” were omitted in each place; (c) after paragraph 6 there were inserted— (6A) When verifying the same operator or aircraft operator as in the previous year, the verifier shall consider the risk to impartiality and take measures to reduce the risk to impartiality. (d) in paragraph 7 for “EU” in both places there were substituted “ UK ”; (e) at the end there were inserted— (8) If the UK ETS lead auditor undertakes verifications of emissions or allocation data for an installation in respect of five consecutive years beginning with 2021 or a subsequent year, then the UK ETS lead auditor may not undertake such verifications for that installation in respect of any of the next three years. (33) Article 45 is to be read as if, in the words before point (a), for “each” there were substituted “ the ”. (34) Article 46(1) is to be read as if “harmonised” were omitted. (35) Article 47 is to be read as if— (a) in paragraph 1 for “each” there were substituted “ the ”; (b) in paragraph 2 “harmonised” were omitted. (36) Article 48 is to be read as if in each of paragraphs 1 and 2 “harmonised” were omitted. (37) Article 49 is to be read as if “harmonised” were omitted in both places. (38) Article 50 is to be read as if— (a) in paragraph 3 “harmonised” were omitted; (b) paragraph 5 were omitted. (39) Article 51(2) is to be read as if “harmonised” were omitted. (40) Article 52(2) is to be read as if “harmonised” were omitted. (41) Article 54(4) is to be read as if for “Member States” there were substituted “ The national accreditation body ”. (42) Article 55 is to be read as if— (a) in paragraph 1 for the words from “national accreditation bodies” to the end there were substituted “ national accreditation body ”; (b) paragraphs 2 to 5 were omitted; (c) in paragraph 6 “harmonised” were omitted. (43) Article 57(4) is to be read as if “harmonised” were omitted. (44) Article 59(1) is to be read as if— (a) in point (a) for “harmonised standard pursuant to Regulation (EC) No 765/2008” there were substituted “ standard ”; (b) in point (b) for the words from “Directive 2003/87/EC” to “where” there were substituted “ the 2020 Order, Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 and Implementing Regulation 2019/1842 where ”. (45) Article 60(2)(a) is to be read as if for the words from “Directive 2003/87/EC” to “where” there were substituted “ the 2020 Order, Implementing Regulation (EU) 2018/2066, Delegated Regulation (EU) 2019/331 and Implementing Regulation 2019/1842 where ”. (46) Article 63(2) is to be read as if for “harmonised standard pursuant to Regulation (EC) No 765/2008” there were substituted “ standard ”. (47) Article 69 is to be read as if— (a) in paragraph 1— (i) for “Member States” there were substituted “ The regulator ”; (ii) the words from “in accordance with Article 74(1)” to the end were omitted; (b) in paragraph 2 “in accordance with Article 74(2) of Implementing Regulation (EU) 2018/2066” were omitted. (48) Article 70 is to be read as if— (a) in paragraph 1— (i) for “Member State” there were substituted “ UK ETS authority ”; (ii) for “their” there were substituted “ the ”; (iii) “, or where applicable, the national authority entrusted with the certification of verifiers,” were omitted; (b) in paragraph 2— (i) for the words from “Where” to “competent authorities” there were substituted “ The Environment Agency or such other regulator as may be designated by the UK ETS authority from time to time is ”; (ii) after “information” there were inserted “ for the purposes of this Chapter ”. (49) Article 71 is to be read as if— (a) in paragraph 1 in the words before point (a)— (i) “of each Member State” were omitted; (ii) for “that” in the first place it occurs there were substituted “ the ”; (iii) for “those Member States” there were substituted “ the United Kingdom ”; (b) paragraph (1)(d) were omitted; (c) in paragraph 3— (i) in the words before point (a), for “that” in the second place it occurs there were substituted “ the ”; (ii) in point (a) for “that” in the second place it occurs there were substituted “ the ”. (50) Article 72 is to be read as if— (a) for “a national” there were substituted “ the national ”; (b) for the words from “following parties” to the end there were substituted “ regulator ”. (51) Article 73(1) is to be read as if— (a) for “of the Member State where the verifier is carrying out the verification” there were substituted “ of the operator of an installation or of an aircraft operator whose data is verified by a verifier ”; (b) “which has accredited that verifier” were omitted. (52) Article 76 is to be read as if— (a) in paragraph 1— (i) for “National accreditation bodies, or where applicable national authorities referred to in Article 55(2),” there were substituted “ The national accreditation body ”; (ii) “other national accreditation bodies,” were omitted; (iii) for “competent authorities” there were substituted “ regulators ”; (iv) the second subparagraph were omitted; (b) in paragraph 2(a) for “that” there were substituted “ the ”; (c) paragraph 2(b) were omitted. (53) Article 77(1)(b) is to be read as if for “or new entrant data reports” there were substituted “ , new entrant data reports or annual activity level reports ”. (54) Annex 1 is to be read as if— (a) in the words before the table the words from “pursuant to Annex I” to the end were omitted; (b) in the table— (i) in the entry for group 10 for “Directive 2003/87/EC” there were substituted “ the 2020 Order ”; (ii) in the entries for groups 10 and 11 for “Directive 2009/31/EC” in each place there were substituted “ the CCS licensing regime ”; (iii) in the entry for group 98 for “Article 10a of Directive 2003/87/EC” there were substituted “ Part 4A of the 2020 Order, Delegated Regulation (EU) 2019/331 or Implementing Regulation (EU) 2019/1842 ”; (iv) the entry for group 99 were omitted. (55) Annex 2 is to be read as if for “the harmonised standard pursuant to Regulation (EC) No 765/2008” there were substituted “ EN ISO 14065:2013 ”. (56) Annex 3 is to be read as if for “the harmonised standard pursuant to Regulation (EC) No 765/2008” there were substituted “ EN ISO/IEC 17011:2017 ”.

Schedule 5A inserted

37

After Schedule 5 insert—

SCHEDULE 5A (1) In this Schedule— - “account permission” has the meaning given in paragraph 16(4); - “Auctioning Regulations” means regulations under section 96 of the Finance Act 2020 ; - “authorised representative” means an authorised representative appointed for an account under paragraph 16; - “operational authorised representative” has the meaning given in paragraph 16(11); - “serious offence” means— 1. an offence specified, or falling within a description specified, in Schedule 1 to the Serious Crime Act 2007 ; 2. an offence under the law of a country or territory outside the United Kingdom which, if committed in or as regards any part of the United Kingdom, would be an offence referred to in paragraph (a); 3. conduct which facilitates the commission by another person of an offence referred to in paragraph (a) or (b), whether the conduct takes place in the United Kingdom or elsewhere; - “working day” means any day other than— 1. Saturday, Sunday, Good Friday or Christmas Day; 2. a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971 . (2) (1) An application, notice, instruction or request to the registry administrator under this Order must be in writing and must be given to the registry administrator in any of the following ways— (a) by sending it to a postal or email address provided by the registry administrator for that purpose; (b) by sending it by electronic means in the registry; (c) by any other means permitted by the registry administrator. (2) A charge that is required to be paid to the registry administrator must be paid by making payment to a postal address or an account provided by the registry administrator for that purpose. (3) When assessing for the purposes of this Schedule whether an account holder or prospective account holder is a fit and proper person to hold an account of a particular type, the registry administrator may take account of any information or factors that the registry administrator considers relevant, including in particular— (a) where the account holder or prospective account holder is an individual, whether the account holder or prospective account holder is under investigation for, or has been convicted in the preceding 5 years of, a serious offence; (b) where the account holder or prospective account holder is a body corporate, whether a person with significant control of the body corporate is under investigation for, or has been convicted in the preceding 5 years of, a serious offence; (c) whether the registry administrator considers that the account 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. (4) When assessing for the purposes of this Schedule whether an individual is a fit and proper person to be an authorised representative, the registry administrator may take account of any information or factors that the registry administrator considers relevant, including in particular— (a) whether the individual is under investigation for, or has been convicted in the preceding 5 years of, a serious offence; (b) whether the registry administrator considers that the individual may use the account 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; (c) whether the appointment of the individual as an authorised representative would create a conflict of interest. (5) (1) The UK ETS authority must establish an electronic system (the “registry”) for the purposes of the UK ETS, in particular, to keep track of— (a) operators of installations and aircraft operators participating in the UK ETS; (b) allowances held by persons and the allocation and transfer of allowances; (c) reportable emissions of installations and aviation emissions of aircraft operators; (d) the surrender of allowances by operators and aircraft operators in accordance with articles 27 and 34. (2) The UK ETS authority must ensure that the registry is established so as to allow for— (a) the following types of account in which allowances may be held— (i) central accounts (see paragraph 9); (ii) an auction delivery account (see paragraph 10); (iii) operator holding accounts for installations (see paragraph 11); (iv) aircraft operator holding accounts (see paragraph 13); (v) trading accounts (see paragraph 14); (b) individuals to be appointed as authorised representatives for accounts with access to the registry to perform actions in relation to accounts on behalf of account holders. (6) (1) The registry administrator must operate the registry and for that purpose may, in particular— (a) establish administrative arrangements and rules for the operation of the registry; (b) take such actions the registry administrator considers necessary to ensure the proper functioning and good administration of the registry; (c) perform actions in relation to accounts in accordance with instructions from account holders. (2) In the operation of the registry, the registry administrator must, as soon as reasonably practicable and to the extent possible, comply with a notice or instruction given under this Order by the UK ETS authority or a regulator. (7) (1) The UK ETS authority or the registry administrator may suspend access to the registry if the UK ETS authority or the registry administrator considers that— (a) a security breach has occurred; or (b) there is a significant risk that a security breach will occur. (2) Where access to the registry is suspended, the UK ETS authority or, as the case may be, the registry administrator must, as soon as reasonably practicable after the suspension takes effect, inform— (a) each regulator; (b) if the UK ETS authority suspends access to the registry, the registry administrator; (c) if the registry administrator suspends access to the registry, the UK ETS authority. (3) The UK ETS authority must, as soon as reasonably practicable and in any event within 2 working days beginning with the day (the “relevant day”) on which the UK ETS authority suspends access to the registry or is informed of a suspension under sub-paragraph (2)(c) or, if the relevant day is not a working day, within 2 working days beginning with the first working day after the relevant day consider whether the suspension should remain in place and— (a) if the UK ETS authority considers the suspension should remain in place, inform each regulator and the registry administrator that the suspension will remain in place; or (b) if the UK ETS authority considers the suspension should be lifted— (i) lift the suspension or instruct the registry administrator to lift the suspension; (ii) inform each regulator and, where the UK ETS authority lifts the suspension, the registry administrator that the suspension has been lifted. (4) Where the suspension remains in place in accordance with sub-paragraph (3)(a), the UK ETS authority must, as soon as reasonably practicable after the UK ETS authority considers that the circumstances giving rise to the suspension no longer exist— (a) lift the suspension or instruct the registry administrator to lift the suspension; (b) inform each regulator and, where the UK ETS authority lifts the suspension, the registry administrator that the suspension has been lifted. (8) (1) The UK ETS authority may suspend access to the registry for technical reasons. (2) Where the suspension is unscheduled (for example, because a technical issue needs to be addressed immediately), the UK ETS authority must inform each regulator and the registry administrator as soon as reasonably practicable after the suspension takes effect. (3) Where the suspension is scheduled, the UK ETS authority must inform each regulator and the registry administrator as soon as reasonably practicable and in any event at least 2 working days before the suspension takes effect. (4) Where, after a suspension, the UK ETS authority considers that the reason for the suspension no longer exists, the UK ETS authority must as soon as reasonably practicable— (a) lift the suspension; (b) inform each regulator and the registry administrator that the suspension has been lifted. (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); (c) a new entrants' reserve account (to keep track of the new entrants' reserve referred to in article 34G); (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). (2) An account held by the UK ETS authority is a “central 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. (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. (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; or (c) inform the registry administrator that no action under paragraph (a) or (b) is required. (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). (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. (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. (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. (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. (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) or (c). (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. (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. (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. (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); (c) paragraph 13(3)(b) (aircraft operator holding accounts); (d) paragraph 25 (suspension of accounts). (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. (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. (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). (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. (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. (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; (c) no allowances may be transferred from the account except to a central account. (3) Where the registry administrator suspends an account, 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; (c) the account holder enters into administration; (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. (26) The UK ETS authority may close— (a) a central account; (b) the auction delivery account. (27) (1) This paragraph applies where— (a) (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.) 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. (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.) 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. (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. (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.

Schedule 6 amended (permits)

38

• (1) Schedule 6 is amended as follows.

Paragraph 4 amended (greenhouse gas emissions permits: content of permit)2In paragraph 4—aafter sub-paragraph (1)(h) insert—hathe free allocation conditions (see sub-paragraph (6));hbwhere a monitoring methodology plan has been approved in relation to the installation under Article 8 of the Free Allocation Regulation, the monitoring methodology plan;;bin sub-paragraph (2)(b)—iafter “verified” insert “ as satisfactory ”;iiafter “submit the report” insert “ (and the verification report) ”;cafter sub-paragraph (5) insert—6The free allocation conditions are the following conditions, which must be expressed to apply while the installation is an FA installation—aa condition requiring the operator to monitor the activity level of the installation in accordance with—ithe Free Allocation Regulation; andiithe monitoring methodology plan approved under Article 8 of the Free Allocation Regulation (including the written documentation of the procedures referred to in Article 8(3) of that Regulation);ba condition requiring the operator, in accordance with the Activity Level Changes Regulation, to prepare an activity level report that is verified as satisfactory in accordance with the Verification Regulation 2018 and to submit the report (and the verification report) to the regulator on or before 30th June in the 2021 scheme year and on or before 31st March in each subsequent scheme year;ca condition requiring the operator, if the installation has ceased operation, to notify the regulator on or before 31st December in the scheme year in which the cessation occurs or within 1 month of the cessation, whichever is later;dany further conditions that the regulator considers necessary to give proper effect to the Free Allocation Regulation or the Activity Level Changes Regulation.7Where, after the date of issue of, or conversion of a permit into, a greenhouse gas emissions permit, a monitoring methodology plan is approved in relation to an installation under Article 8 of the Free Allocation Regulation, the regulator must vary the permit under paragraph 6 so that it contains the monitoring methodology plan..

Paragraph 6 amended (variation of permits)3In paragraph 6—aafter sub-paragraph (2)(c) insert—da failure by the operator to implement—ia recommendation for improvement of the monitoring methodology plan as required by Article 9(2)(e) of the Free Allocation Regulation; oriia modification of the monitoring methodology plan requested by the regulator under Article 9(5)(d) of that Regulation.;bin sub-paragraph (3) before paragraph (a) insert—zaparagraph 4(7) (adding monitoring methodology plan);.

Paragraph 7 amended (transfer of permits: application)4In paragraph 7(5) for “8(a)” in both places substitute “ 8(1)(a) ”.

Paragraph 8 amended (transfer of permits: contents of application)5In paragraph 8 renumber the existing text as sub-paragraph (1) and insert after that sub-paragraph—2Where the application is for the transfer or partial transfer of a greenhouse gas emissions permit for an installation that is an FA installation, the application must also contain—aeither—ithe new operator's monitoring methodology plan in accordance with Article 8 of the Free Allocation Regulation; oriithe new operator's specification of the parts of the existing monitoring methodology plan that it is proposed be varied;bin the case of an application for the partial transfer of the permit, the transferring operator's specification of the parts of the existing monitoring methodology plan that it is proposed be varied.3But sub-paragraph (2) does not apply if the application contains a statement by the new operator that the new operator renounces free allocation in respect of the transferred units..

Paragraph 9 amended (transfer of permits: grant of application)6In paragraph 9—ain sub-paragraph (1)—iin paragraph (a) omit the final “and”;iiin paragraph (b) for “paragraph).” substitute “ paragraph); and ”;iiiafter paragraph (b) insert—cwhere the application is for the transfer or partial transfer of a greenhouse gas emissions permit of an installation that is an FA installation, will be capable of complying with the free allocation conditions of the permit (including as varied under this paragraph).;bafter sub-paragraph (1) insert—1ABut sub-paragraph (1)(c) does not apply if the application contains a statement by the new operator that the new operator renounces free allocation in respect of the transferred units.;cafter sub-paragraph (5) insert—5AWhere a permit is cancelled under sub-paragraph (5)(b), the regulator must give notice to the registry administrator as soon as reasonably practicable..

Paragraph 11 amended (surrender of permits)7In paragraph 11(6)(b) after “complied with” insert “ or that there is no reasonable prospect of their being complied with ”.

Paragraph 12 amended (revocation of permits)8In paragraph 12—aafter sub-paragraph (3)(a)(i)(cc) insert—ddthe Free Allocation Regulation;eethe Activity Level Changes Regulation.;bin sub-paragraph (7)(b) after “complied with” insert “ or that there is no reasonable prospect of their being complied with ”.

Schedule 7 amended (hospitals and small emitters)

39

• (1) Schedule 7 is amended as follows.

Paragraph 5 amended (obtaining hospital or small emitter status for 2026-2030 allocation period)2In paragraph 5(6)(a) after “verified” insert “ as satisfactory ”.

Paragraph 11 amended (hospital or small emitter permits: content of permit)3In paragraph 11(2)(b)—ain sub-paragraph (i) after “verified” insert “ as satisfactory ”;bin the words after sub-paragraph (ii) for “(and any declaration)” substitute “ and the verification report (where sub-paragraph (i) applies) or declaration (where sub-paragraph (ii) applies) ”.

Paragraph 13 amended (hospital and small emitters: modifications to Monitoring and Reporting Regulation 2018)4In paragraph 13—aomit sub-paragraph (2);bin sub-paragraph (6) for “verified in accordance” substitute “ verified as satisfactory in accordance ”.

Paragraph 16 amended (emissions targets for 2021-2025 allocation period)5In paragraph 16(8)—ain paragraph (a) after “verified” insert “ as satisfactory ”;bafter paragraph (a) insert—aadetermined under regulation 44 of GGETSR 2012 or article 45 of this Order; or.

Paragraph 17 amended (emissions targets for 2026-2030 allocation period)6In paragraph 17(8)—ain paragraph (a)—iafter “verified” insert “ as satisfactory ”;iiomit the final “or”;bafter paragraph (a) insert—aadetermined under article 45; or.

Schedule 8 amended (ultra-small emitters)

40

• (1) Schedule 8 is amended as follows.

Paragraph 3 amended (obtaining ultra-small emitter status for 2026-2030 allocation period)2In paragraph 3(7)(a) after “verified” insert “ as satisfactory ”.

Paragraph 4 amended (obtaining ultra-small emitter status for 2026-2030 allocation period: modifications to Verification Regulation 2018 for ultra-small emitters in 2021-2025 allocation period)3In paragraph 4—aomit sub-paragraph (3);bfor sub-paragraph (5)(a)(i) substitute—iin point (a) the words from “and meets the requirements” to the end were omitted;;cin sub-paragraph (6)(c) after “points” insert “ (c) and ”;din sub-paragraph (14)(a)—iin sub-paragraph (i) for “the Verification Regulation 2018” substitute “ Commission Implementing Regulation (EU) 2018/2067 (as it had effect in EU law) ”;iiin sub-paragraph (ii) for “2021-2026” substitute “ 2021-2025 ”.

Schedule 9 amended (appeals to Scottish Land Court)

41

• (1) Schedule 9 is amended as follows.

• (2) In paragraph 1—

• (a) in sub-paragraph (1)—

• (i) in the words before paragraph (a) after “regulator” insert “ or the registry administrator (in either case, the “respondent”) ”;

• (ii) in paragraph (b) for “regulator” substitute “ respondent ”;

• (b) in sub-paragraph (2)(d) for “regulator” substitute “ respondent ”.

• (3) In paragraph 4 for “regulator” in each place substitute “ respondent ”.

Schedule 10 amended (appeals to Planning Appeals Commission (Northern Ireland))

42

• (1) Schedule 10 is amended as follows.

• (2) In paragraph 1—

• (a) in sub-paragraph (1) after “regulator” insert “ or the registry administrator (in either case, the “respondent”) ”;

• (b) in sub-paragraph (3) for “regulator” substitute “ respondent ”.

• (3) In paragraph 2 for “regulator” substitute “ respondent ”.

• (4) In paragraph 3(2) for “regulator” substitute “ respondent ”.

Schedule 11 amended (transitional provisions: installations)

43

• (1) Schedule 11 is amended as follows.

Paragraph 1 amended (permits under GGETSR 2012)2In paragraph 1(7) for “the Verification Regulation 2018” substitute “ Commission Implementing Regulation (EU) 2018/2067 (as it had effect in EU law) ”.

Paragraph 2 amended (applications for permits, etc. under GGETSR 2012)3After paragraph 2(3) insert—4This sub-paragraph applies where—aa permit for an installation is converted into a greenhouse gas emissions permit under paragraph 1(4);bthe monitoring methodology plan approved in respect of the installation under Article 8 of the Free Allocation Regulation is contained in the permit by virtue of paragraph 4(1)(hb) or (7) of Schedule 6; andba significant modification of the monitoring methodology plan is notified for approval under Article 9 of the Free Allocation Regulation on or before 31st December 2020, but not approved before that date.5Where sub-paragraph (4) applies, the notification of the significant modification must be treated as an application to vary the permit under paragraph 6 of Schedule 6 to make the significant modification..

PART 3 — Amendments to other legislation

Climate Change Agreements (Amendment of Agreements) (EU Exit) Regulations 2018 amended

44

• (1) The Climate Change Agreements (Amendment of Agreements) (EU Exit) Regulations 2018 are amended as follows.

• (2) In regulation 2(1)(d) after “the Greenhouse Gas Emissions Trading Scheme Regulations 2012” insert “ or the Greenhouse Gas Emissions Trading Scheme Order 2020 ”.

Greenhouse Gas Emissions Trading Scheme (Amendment) (EU Exit) (No. 2) Regulations 2019 amended

45

• (1) The Greenhouse Gas Emissions Trading Scheme (Amendment) (EU Exit) (No. 2) Regulations 2019 are amended as follows.

• (2) Omit regulation 62 (revocation of Commission Delegated Regulation (EU) 2019/331).

Free Allocation Regulation amended

46

Schedule 1 (which amends Commission Delegated Regulation (EU) 2019/331 for the purposes of the United Kingdom Emissions Trading Scheme) has effect.

Activity Level Changes Regulation amended

47

Schedule 2 (which amends Commission Implementing Regulation (EU) 2019/1842 for the purposes of the United Kingdom Emissions Trading Scheme) has effect.

SCHEDULE 1 — Free Allocation Regulation amended

Free Allocation Regulation amended

1

Commission Delegated Regulation (EU) 2019/331 is amended in accordance with this Schedule.

“Regulator” substituted for “competent authority”

2

For “competent authority” in each place substitute “ regulator ”.

Article 1 amended (scope)

3

• (1) Article 1 is amended as follows.

• (2) For the words from “emission allowances under Chapter III” to the end substitute “ allowances to installations under the UK ETS ”.

Article 2 amended (definitions)

4

• (1) Article 2 is amended as follows.

• (2) Renumber the existing text as paragraph 1.

• (3) In paragraph 1—

• (a) for point (1) substitute—

(1) ‘incumbent installation’ means an installation in respect of which a deemed application for free allocation in the 2021-2025 allocation period or an application for free allocation in the 2026-2030 allocation period under Article 4 is made;

• (b) in point (3) (heat benchmark sub-installation) after “EU ETS” in both places insert “ or UK ETS ”;

• (c) in point (4) (district heating) after “EU ETS” insert “ or UK ETS ”;

• (d) in point (5) (district heating sub-installation) after “EU ETS” insert “ or UK ETS ”;

• (e) in point (10) (process emissions sub-installation) for “greenhouse gas emissions listed in Annex I to Directive 2003/87/EC” substitute “ emissions of greenhouse gases set out in column 2 of table C in Schedule 2 to the UK ETS Order ”;

• (f) in point (11) (waste gas) for “Article 3(50) of Regulation (EU) No 601/2012” substitute “ Article 3(52) of the Monitoring and Reporting Regulation 2018 ”;

• (g) for point (14) substitute—

(14) ‘baseline period’ means: (a) in relation to a deemed application for free allocation in the 2021-2025 allocation period or an incumbent installation in respect of which such an application is made, the 5-year period beginning on 1 January 2014; (b) in relation to an application for free allocation in the 2026-2030 allocation period under Article 4 or an incumbent installation in respect of which such an application is made, the 5-year period beginning on 1 January 2019;

• (h) omit point (15);

• (i) after point (18) insert—

(19) ‘deemed application for free allocation in the 2021-2025 allocation period’ must be construed in accordance with Article 3a; (20) ‘electricity generator’ means an installation: (a) that, on or after 1 January 2005, produced electricity for sale to third parties; and (b) at which no regulated activity other than the regulated activity referred to in column 1 of the first entry in table C in Schedule 2 to the UK ETS Order (combustion of fuels) is carried out; (21) ‘emission allowance’ means an allowance (as defined in the UK ETS Order); (22) ‘new entrant’ means an installation in respect of which an application for free allocation under Article 5 is made; (23) ‘UK ETS Order’ means the Greenhouse Gas Emissions Trading Scheme Order 2020.

• (4) After paragraph 1 insert—

(2) Expressions used in this Regulation that are defined for the purposes of the Climate Change Act 2008 or the UK ETS Order have the meanings given in that Act or Order (3) A reference in this Regulation to a “non-ETS” entity, installation or process is a reference to an entity, installation or process that is not covered by either the EU ETS or the UK ETS.

Article 2a inserted

5

After Article 2 insert—

(1) An application for free allocation of allowances may not be made under this Regulation in respect of: (a) an installation used for any of the following: (i) the capture of greenhouse gases from other installations for the purpose of transport and geological storage in a storage site; (ii) the transport of greenhouse gases by pipelines for geological storage in a storage site; (iii) the geological storage of greenhouse gases in a storage site; (b) an electricity generator, except in relation to measurable heat: (i) produced by an electricity generator that produced measurable heat by means of high-efficiency cogeneration (as defined in Article 2(34) of Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 ) in the relevant period, calculated over the relevant period as a whole; or (ii) exported for the purposes of district heating. (2) For the purposes of paragraph 1(b)(i): (a) the “relevant period” is: (i) in the case of a deemed application for free allocation in the 2021-2025 allocation period or an application for free allocation in the 2026-2030 allocation period under Article 4, the baseline period; (ii) in the case of an application for free allocation under Article 5, the period from the start of normal operation until the end of the year before the year in which the application is made; (b) Directive 2012/27/EU has effect as if in Annex 2 in point (a) in the first indent after “heat and electricity” there were inserted “ ; and for the purposes of this indent, cogeneration production from cogeneration units certified under the standard applying from time to time for the purposes of the Combined Heat and Power Quality Assurance Programme that provides primary energy savings during the period of certification must be treated as providing primary energy savings of at least 10% during that period ”.

Article 3 omitted

6

Article 3 is omitted.

Article 3a inserted

7

After Article 2 and the cross-heading to Chapter 2 (application, data reporting and monitoring rules) insert—

(1) This Article applies where before 1 January 2021, the operator of an installation made an application (an “EU ETS application”) under Article 4 for free allocation of emission allowances under the EU ETS in respect of the allocation period in the EU ETS beginning on 1 January 2021 (2) For the purposes of this Regulation: (a) the EU ETS application must be treated as an application (a “deemed application for free allocation in the 2021-2025 allocation period”) by the operator of the installation for free allocation of allowances under the UK ETS in the 2021-2025 allocation period; (b) the determination of historical activity levels under Article 15, and anything else done in connection with the EU ETS application under this Regulation, before IP completion day must be treated as done in connection with the deemed application for free allocation in the 2021-2025 allocation period. (3) Without limiting paragraph 2, in this Regulation— (a) a reference to a monitoring methodology plan includes a monitoring methodology plan approved for the purposes of the EU ETS application; (b) a reference to a baseline data report or a verification report includes a baseline data report or a verification report submitted for the purposes of the EU ETS application.

Article 4 amended (application for free allocation in 2026-2030 allocation period by operators of incumbent installations)

8

• (1) Article 4 is amended as follows.

• (2) In the heading after “allocation” insert “ in 2026-2030 allocation period ”.

• (3) For paragraph 1 substitute—