Statutory Instruments

2020 No. 1265

Climate Change

The Greenhouse Gas Emissions Trading Scheme Order 2020_cross-notes

Made

11th November 2020

Coming into force in accordance with article 2

At the Court at Windsor Castle, the 11th day of November 2020

Present,

The Queen's Most Excellent Majesty in Council

^M1This Order is made in exercise of the powers conferred by sections 44, 46(3), 54 and 90(3) of, and Schedule 2 and paragraph 9 of Schedule 3 to, the Climate Change Act 2008 .

In accordance with paragraph 10 of Schedule 3 to that Act, before the recommendation to Her Majesty in Council to make this Order was made—

(a)

the advice of the Committee on Climate Change, including on the amount of the limit referred to in section 48(2) of that Act, was obtained and taken into account; and

(b)

such persons likely to be affected by the Order as the Secretary of State, the Scottish Ministers, the Welsh Ministers and the Department of Agriculture, Environment and Rural Affairs considered appropriate were consulted.

In accordance with paragraph 11 of that Schedule, a draft of the instrument containing this Order was laid before Parliament, the Northern Ireland Assembly, the Scottish Parliament and Senedd Cymru and approved by resolution of each House of Parliament, the Northern Ireland Assembly, the Scottish Parliament and Senedd Cymru.

Accordingly, Her Majesty, by and with the advice of Her Privy Council, makes the following Order:

PART 1 Preliminary

Citation_I1

1. This Order may be cited as the Greenhouse Gas Emissions Trading Scheme Order 2020.

Commencement_I2

2.—(1) Except as provided by paragraph (2), this Order comes into force on the day after the day on which it is made.

(2) Article 25, Schedule 5 and paragraph 4 of Schedule 8 come into force—

(a)on the day after the day on which this Order is made; or

(b)immediately after IP completion day,

whichever is later.

Extent_I3

3. This Order extends to the whole of the United Kingdom.

Interpretation_I4

4.—(1) In this Order—

“ 2021-2025 allocation period ” means the 2021, 2022, 2023, 2024 and 2025 scheme years;

[^F1 “ 2026-2030 period ” means the period beginning with 1st January 2026 and ending with 31st December 2030; ^F1]

[^F2 “ 2026 allocation period ” means the 2026 scheme year; ^F2]

[^F2 “ 2027-2030 allocation period ” means the 2027, 2028, 2029 and 2030 scheme years; ^F2]

[^F3 “ account ” means account in the registry;

“ Activity Level Changes Regulation ” means Commission Implementing Regulation (EU) 2019/1842 of 31 October 2019 , as it forms part of domestic law; ^F3]

“ aerodrome ” means a defined area (including any buildings, installations and equipment) on land or water or on a fixed, fixed offshore or floating structure to be used either wholly or in part for the arrival, departure and surface movement of aircraft;

“ aircraft operator ” has the meaning given in article 6;

[^F4 “ aircraft operator holding account ” means an aircraft operator holding account opened under paragraph 13(3) of Schedule 5A; ^F4]

[^F5 “ allocation period ” means the 2021-2025 allocation period, the 2026 allocation period or the 2027-2030 allocation period; ^F5]

[^F6 “ allocation table ” means an allocation table for the 2021-2025 allocation period, the 2026 allocation period or the 2027-2030 allocation period referred to in article 34A or 34AA; ^F6]

“ allowance ” means an allowance created under this Order (see article 18);

“ aviation activity ” means an activity set out in paragraph 1 of Schedule 1;

[^F7 “ aviation allocation table ” means the aviation allocation table for the 2021-2025 allocation period referred to in article 34N; ^F7]

“ aviation emissions ” means emissions of carbon dioxide arising from an aviation activity;

“ carbon price ”, in relation to a scheme year, has the meaning given in article 46;

“ CCA 2008 ” means the Climate Change Act 2008 ;

[^F8 “ central account ” has the meaning given in paragraph 9(2) of Schedule 5A; ^F8]

^M2 “ the Chicago Convention ” means the Convention on International Civil Aviation which was, on 7th December 1944, signed on behalf of the Government of the United Kingdom at the International Civil Aviation Conference held at Chicago ;

^M3 “ chief inspector ” means the chief inspector constituted under regulation 8(3) of the Pollution Prevention and Control (Industrial Emissions) Regulations (Northern Ireland) 2013 ;

“ commercial air transport operator ” means a person that, for remuneration, provides scheduled or non-scheduled air transport services to the public for the carriage of passengers, freight or mail and holds an air operator certificate (AOC) or equivalent document as required by Part I of Annex 6 to the Chicago Convention;

^M4 “ Directive ” means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC ;

“ emission factor ” has the same meaning as in the Monitoring and Reporting Regulation 2018;

[^F9 “ emissions monitoring plan ” has the meaning given in article 28(1) in relation an aircraft operator and the meaning given in paragraph 9(1) of Schedule 2A in relation to a maritime operator; ^F9]

“ EU ETS ” means the system for greenhouse gas emission allowance trading established by the Directive;

^M5 “ Eurocontrol ” has the meaning given in section 24 of the Civil Aviation Act 1982 ;

“ excluded flights ” means flights set out in paragraph 2 of Schedule 1;

[^F10 “ FA installation", “ FA installation for the 2021-2025 allocation period ” and [^F11 “FA installation for the 2026 and 2027-2030 allocation periods” ^F11] must be construed in accordance with article 4A; ^F10]

“ flight ” means one flight sector that is a flight or one of a series of flights which commences at a parking place of the aircraft and terminates at a parking place of the aircraft;

[^F12 “ free allocation ” means the allocation of allowances free of charge under Part 4A;

“ free allocation conditions ” means the conditions referred to in paragraph 4(6) of Schedule 6;

“ Free Allocation Regulation ” means Commission Delegated Regulation (EU) 2019/331 of 19 December 2018 , as it forms part of domestic law; ^F12]

“ full-scope flights ” means flights departing from, or arriving in, an aerodrome situated in the United Kingdom, Gibraltar [^F13 , Switzerland ^F13] or an EEA state, other than excluded flights;

^M6 “ GGETSR 2012 ” means the Greenhouse Gas Emissions Trading Scheme Regulations 2012 ;

“ GGETSR emissions plan ” means an emissions plan as defined in regulation 20 of the GGETSR 2012;

“ greenhouse gas emissions permit ” means a greenhouse gas emissions permit—

(a)

issued under paragraph 3 or 9 of Schedule 6; or

(b)

converted under paragraph 24 or 26 of Schedule 7 or paragraph 1(4) of Schedule 11;

“ hospital and small emitter list for 2021-2025 ” has the meaning given in paragraph 3(2) of Schedule 7;

“ hospital and small emitter list for 2026-2030 ” has the meaning given in paragraph 5(4)(b) of Schedule 7;

“hospital or small emitter” must be construed in accordance with paragraphs 3 and 4 of Schedule 7;

“ hospital or small emitter permit ” means a hospital or small emitter permit—

(a)

issued under paragraph 9 of Schedule 7; or

(b)

converted under paragraph 10 of Schedule 7 or paragraph 1(3) of Schedule 11;

“installation” must be construed in accordance with Schedule 2;

[^F14 “ maritime activity ” has the meaning given in paragraph 7 of Schedule 2A; ^F14]

[^F14 “ maritime emissions ” means emissions of carbon dioxide, methane and nitrous oxide from maritime activities; ^F14]

[^F14 “ maritime operator ” has the meaning given in paragraph 3 of Schedule 2A; ^F14]

[^F14 “ maritime operator holding account ” means a maritime operator holding account opened under paragraph 13A(3) of Schedule 5A; ^F14]

“ monitoring and reporting conditions ” means—

(a)

in relation to a greenhouse gas emissions permit, the conditions referred to in paragraph 4(2) of Schedule 6;

(b)

in relation to a hospital or small emitter permit, the conditions referred to in paragraph 11(2) of Schedule 7;

^M7 “ Monitoring and Reporting Regulation 2012 ” means Commission Regulation (EU) No. 601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council ;

^M8 “ Monitoring and Reporting Regulation 2018 ” means Commission Implementing Regulation (EU) 2018/2066 of 19 December 2018 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council [^F15 (disregarding any amendments adopted after 11th November 2020) and, except in article 24 and Schedule 4, it means that Regulation ^F15] as given effect subject to modifications by article 24;

“ non-commercial air transport operator ” means a person who operates flights and is not a commercial air transport operator;

^M9 “ NRW ” means the Natural Resources Body for Wales ;

“ operator ”, in relation to an installation, has the meaning given in article 5;

[^F16 “ operator holding account ” means an operator holding account for an installation opened under paragraph 11(4) or 12(3) of Schedule 5A; ^F16]

“ outermost region ” means—

(a)

the Canary Islands;

(b)

French Guiana;

(c)

Guadeloupe;

(d)

Mayotte;

(e)

Martinique;

(f)

Réunion;

(g)

Saint-Martin;

(h)

the Azores; or

(i)

Madeira;

“ permit ” means—

(a)

a greenhouse gas emissions permit; or

(b)

a hospital or small emitter permit,

and a reference to a permit includes the monitoring plan (see paragraph 4(1)(f) of Schedule 6 and paragraph 11(1)(g) of Schedule 7) [^F17and, in the case of a greenhouse gas emissions permit, any monitoring methodology plan (see paragraph 4(1)(hb) and (7) of Schedule 6)^F17] ;

[^F18 “ registry ” hashas the meaning given in paragraph 5(1) of Schedule 5A;

“ registry administrator ” has the meaning given in article 8A; ^F18]

“ regulated activity ” has the meaning given in paragraph 3(1) of Schedule 2;

[^F19 “regulator” must be construed in accordance with articles 9 to 13A; ^F19]

“ relevant Northern Ireland electricity generator ” means an installation within the meaning of GGETSR 2012 to which those Regulations continue to apply to regulate the carrying out of regulated activities at the installation on or after 1st January 2021;

^M10 “ reportable emissions ”, in relation to an installation, means the total specified emissions (in tonnes of carbon dioxide equivalent ) from the regulated activities carried out at the installation;

“ scheme year ” means the calendar year beginning on 1st January 2021 or any of the 9 subsequent calendar years; and a reference to a scheme year described by a calendar year (for example, the “2021 scheme year”) is a reference to the scheme year beginning on 1st January of that year;

^M11 “ SEPA ” means the Scottish Environment Protection Agency ;

“ specified emissions ” has the meaning given in paragraph 3(7) of Schedule 2;

“ surrender ”, in relation to an allowance, means use the allowance to account for reportable emissions or aviation emissions in a particular scheme year[^F20 in accordance with article 27 or 34 ^F20][^F21 or any other obligation referred to in paragraph (6) of this article ^F21] ;

“ surrender condition ” has the meaning given in paragraph 4(3) of Schedule 6;

[^F22 surrender deduction” means any deduction arising in accordance with paragraph 15(1)(a) of Schedule 2A;^F22]

“ trading period ” means the period beginning on 1st January 2021 and ending on 31st December 2030;

“ UK coastal waters ” has the meaning given in section 89(2) of CCA 2008;

“ UK ETS ” has the meaning given in article 16(1);

“ UK ETS authority ” has the meaning given in article 14;

“ UK sector of the continental shelf ” has the meaning given in section 89(2) of CCA 2008;

“ultra-small emitter” must be construed in accordance with paragraph 2 of Schedule 8;

“ ultra-small emitter list for 2021-2025 ” has the meaning given in paragraph 2(2) of Schedule 8;

“ ultra-small emitter list for 2026-2030 ” has the meaning given in paragraph 3(5) of Schedule 8;

^M12 “ Verification Regulation 2012 ” means Commission Regulation (EU) No 600/2012 of 21 June 2012 on the verification of greenhouse gas emission reports and tonne-kilometre reports and the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council ;

^M13 “ Verification Regulation 2018 ” means Commission Implementing Regulation (EU) 2018/2067 of 19 December 2018 on the verification of data and on the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council [^F23 (disregarding any amendments adopted after 11th November 2020) and, except in article 25 and Schedule 5, it means that Regulation as given effect subject to modifications by article 25 ^F23] .

[^F24 “verification report” has, in relation to an operator or aircraft operator, the same meaning as in the Verification Regulation 2018 and, in relation to a maritime operator, means a verification report issued pursuant to paragraph 59 of Schedule 2A. ^F24]

(2) For the purposes of this Order, the amount of an installation's reportable emissions (including reportable emissions within the meaning of GGETSR 2012) from biomass must be treated as zero where the emission factor of the biomass under the Monitoring and Reporting Regulation 2012 or the Monitoring and Reporting Regulation 2018 is zero.

[^F25 (2A) For the purposes of this Order, the amount of an aircraft operator’s aviation emissions from biofuel must be treated as zero where the emission factor of the biofuel under the Monitoring and Reporting Regulation 2018 is zero.^F25]

[^F26 (3) For the purposes of this Order, an installation has ceased operation if all regulated activities have permanently ceased to be carried out at the installation (see paragraph 10A of Schedule 6 (installation to be treated as ceasing operation: regulator’s notice) for circumstances in which an installation must be treated as having ceased operation).^F26]

(4) For the purposes of this Order, the question of whether any waters are adjacent to Northern Ireland, Scotland or Wales must be determined in accordance with—

(a)^M14any Order in Council made under section 98(8) of the Northern Ireland Act 1998 ;

(b)^M15any Order in Council made under section 126(2) of the Scotland Act 1998 ;

(c)^M16any Order in Council made under sections 58 and 158(4), or order made under section 158(3), of the Government of Wales Act 2006 .

[^F27 (5) Where an allowance is surrendered in circumstances in which the allowance may be treated as surrendered to comply with more than one obligation referred to in paragraph (6), or with one of those obligations but in respect of more than one scheme year, the regulator may treat the allowance as surrendered to comply with any one of those obligations, or in respect of any one of those scheme years; and consequently any provision of Part 7 under which a deficit notice may be given, or a civil penalty may or must be imposed, in respect of a failure to surrender allowances must be read accordingly.

(6) The obligations are obligations to surrender allowances under any of the following—

(a)article 27;

(b)article 34;

(c)a deficit notice under article 44A;

(d)a notice under paragraph 10 of Schedule 6;

(e)a surrender notice under paragraph 11 of that Schedule;

(f)a revocation notice under paragraph 12 of that Schedule.^F27]

[^F28Meaning of FA installation, etc.

4A. —(1) For the purposes of this Order, an installation is an “FA installation” if the installation is—

(a)an FA installation for the 2021-2025 allocation period; or

[^F29 (b)an FA installation for the 2026 and 2027-2030 allocation periods.^F29]

(2) For the purposes of this Order, an installation is an FA installation for the 2021-2025 allocation period from—

(a)the date of publication of the allocation table for the 2021-2025 allocation period (including an updated allocation table) that first includes an entry for the installation; or

(b)if earlier, the date on which the regulator gives notice of the final annual amount of allowances to be allocated in respect of the installation for any scheme year in the 2021-2025 allocation period under—

(i)article 34H(7) (installations: errors in applications for free allocation, etc.);

[^F30 (ia)paragraph 4(7) of Schedule 8A (former hospital or small emitters or ultra-small emitters);^F30]

(ii)Article 18a(9) of the Free Allocation Regulation (new entrants);

(iii)Article 25(9) of that Regulation (mergers and splits).

(3) An installation ceases to be an FA installation for the 2021-2025 allocation period at the earliest of—

(a)the end of the 2025 scheme year;

^F31(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the date on which, following the partial transfer under paragraph 9 of Schedule 6 of the greenhouse gas emissions permit of an installation that is an FA installation, the regulator gives notice to the transferring operator (within the meaning of that paragraph) under Article 25(9)(b) of the Free Allocation Regulation that the installation is not an FA installation for the 2021-2025 allocation period;

(d)if the installation's permit is surrendered under paragraph 11(1) of Schedule 6 or revoked under paragraph 12(1) of that Schedule, the end of the scheme year in which the installation ceases operation;

(e)if the installation's permit is surrendered under paragraph 11(2) of Schedule 6 or revoked under paragraph 12(3) of that Schedule, the end of the scheme year in which the surrender or revocation takes effect;

(f)the date on which, following the inclusion of an entry for the installation in the allocation table for the 2021-2025 allocation period in error, the regulator gives notice to the operator under article 34H(7)(c) that the installation is not an FA installation for the 2021-2025 allocation period.

(4) For the purposes of this Order, an installation is an [^F32 FA installation for the 2026 and 2027-2030 allocation periods^F32] from [^F33 the earliest of the following^F33] —

(a)the date of publication of the allocation table for the [^F34 2026 allocation period or the 2027-2030^F34] allocation period (including an updated allocation table) that first includes an entry for the installation; ^F35...

^F36(aa). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)^F37... the date on which the regulator gives notice of the final annual amount of allowances to be allocated in respect of the installation for any scheme year in the [^F38 2026 allocation period or the 2027-2030^F38] allocation period under—

(i)article 34H(7) (installations: errors in applications for free allocation, etc.);

[^F39 (ia)paragraph 4(7) of Schedule 8A (former hospital or small emitters or ultra-small emitters);^F39]

(ii)Article 18a(9) of the Free Allocation Regulation (new entrants);

(iii)Article 25(9) of that Regulation (mergers and splits).

(5) An installation ceases to be an [^F40 FA installation for the 2026 and 2027-2030 allocation periods^F40] at the earliest of—

(a)the end of the 2030 scheme year;

(b)if the operator of the installation gives a renunciation notice under Article 24 of the Free Allocation Regulation on or after 1st January [^F41 2027^F41] in respect of the installation as a whole, the end of the scheme year in which the renunciation notice is given;

(c)the date on which, following the partial transfer under paragraph 9 of Schedule 6 of the greenhouse gas emissions permit of an installation that is a FA installation, the regulator gives notice to the transferring operator (within the meaning of that paragraph) under Article 25(9)(b) of the Free Allocation Regulation that the installation is not an [^F42 FA installation for the 2026 and 2027-2030 allocation periods^F42] ;

(f)the date on which, following the inclusion of an entry for the installation in the allocation table for the [^F43 2026 allocation period or the 2027-2030 allocation period in error^F43] , the regulator gives notice to the operator under article 34H(7)(c) that the installation is not an [^F44 FA installation for the 2026 and 2027-2030 allocation periods^F44] ;

^F45(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F46 (h)if the allocation table for the 2026 allocation period includes an entry for the installation but the allocation table for the 2027-2030 allocation period does not, the end of the 2026 scheme year.^F46^,^F28]]

Meaning of operator_I5

5. —(1) In this Order, the “operator” of an installation is the person who has control over its operation.

(2) But where—

(a)a regulated activity has not begun to be carried out at an installation, the operator of the installation is the person who will have control over its operation when a regulated activity is carried out at the installation;

(b)a regulated activity is no longer carried out at an installation, the operator of the installation is the person who holds the permit for the installation or, if no permit authorises a regulated activity to be carried out at the installation, the person who had control over its operation immediately before regulated activities ceased to be carried out at the installation;

(c)the holder of a permit for an installation ceases to have control over its operation, the operator of the installation is the permit holder.

Meaning of aircraft operator_I6

6.—(1) In this Order, a person is an aircraft operator in relation to a scheme year, where in respect of that year that person—

(a)performs an aviation activity; and

(b)is not exempt under article 7 or 8.

(2) For the purposes of paragraph (1)(a), an aviation activity is performed by the person who operates the aircraft at the time of the flight, or where that person is not known, the owner of that aircraft is deemed to be the person that performed the aviation activity.

Exempt commercial air transport operators_I7

7.—(1) A commercial air transport operator is not an aircraft operator for the purposes of this Order in relation to a scheme year, where in respect of that year it operates—

(a)less than 243 full-scope flights per period for 3 consecutive 4-month periods; or

(b)full-scope flights with total annual emissions of less than 10,000 tonnes of carbon dioxide.

(2) In this article, “ 4-month period ” means any of the following periods—

(a)January to April;

(b)May to August;

(c)September to December.

(3) For the purposes of this article, a full-scope flight is taken to have occurred in the 4-month period that included its local time of departure.

Exempt non-commercial air transport operators_I8

8. A non-commercial air transport operator is not an aircraft operator for the purposes of this Order in relation to a scheme year, where in respect of that year it operates full-scope flights with total annual emissions of less than 1,000 tonnes of carbon dioxide.

[^F47Meaning of registry administrator

8A. —(1) A reference in this Order to the “ registry administrator ” is a reference to—

(a)the chief inspector;

(b)the Environment Agency;

(c)NRW;

(d)the Secretary of State; and

(e)SEPA.

(2) Functions conferred or imposed by this Order on the “registry administrator” may be exercised—

(a)by all of the persons referred to in paragraph (1) jointly; or

(b)by one of the persons referred to in paragraph (1) (or by more than one of the persons referred to in paragraph (1) jointly) on behalf of the other persons referred to in paragraph (1) with their agreement.^F47]

Meaning of regulator_I9

9. —(1) Each of the following is a “ regulator ” for the purposes of this Order—

(a)the chief inspector;

(b)^M17the Environment Agency ;

(c)NRW;

(d)the Secretary of State;

(e)SEPA.

(2) In this Order, “ regulator ” means—

(a)in relation to an installation, the regulator determined in accordance with article 10;

(b)in relation to an aircraft operator, the regulator determined in accordance with articles 11 to 13;

[^F48 (c)in relation to a maritime operator, the regulator determined in accordance with article 13A.^F48]

[^F49 (2A) Articles 11 to 13 apply for the purpose of determining the regulator of a person other than an aircraft operator in relation to—

(a)monitoring and reporting of the person's aviation emissions;

(b)free allocation to the person under Chapter 2 of Part 4A (aviation free allocation);

(c)the opening, operation or closure of the person's aircraft operator holding account,

as if references to “aircraft operator” were to the person. ^F49]

(3) Each regulator is an administrator of the UK ETS for the purposes of paragraph 21 of Schedule 2 to CCA 2008.

Meaning of regulator: installations

10.—(1) This article applies for the purposes of article 9.

(2) The regulator, in relation to an installation set out in column 1 of table A, is the regulator set out in the corresponding entry in column 2.

Table A_I10

Column 1	Column 2
Installation	Regulator
Installation in— (a)England; (b)the territorial sea adjacent to England, except where the installation is used for a purpose referred to in paragraph (3)	Environment Agency
Installation in— (a)Northern Ireland; (b)controlled waters adjacent to Northern Ireland; (c)the territorial sea (other than controlled waters) adjacent to Northern Ireland, except where the installation is used for a purpose referred to in paragraph (3)(a)	Chief inspector
Installation in— (a)Scotland; (b)controlled waters adjacent to Scotland; (c)the territorial sea (other than controlled waters) adjacent to Scotland, except where the installation is used for a purpose referred to in paragraph (3)(a)	SEPA
Installation in— (a)Wales; (b)the territorial sea adjacent to Wales	NRW
Installation in— (a)the territorial sea adjacent to England, where the installation is used for a purpose referred to in paragraph (3); (b)the territorial sea (other than controlled waters) adjacent to Northern Ireland and Scotland, where the installation is used for a purpose referred to in paragraph (3)(a); (c)the UK sector of the continental shelf	Secretary of State

(3) The purposes are—

(a)^M18a purpose connected with the exploration for, or exploitation of, petroleum (within the meaning of section 1 of the Petroleum Act 1998 );

(b)^M19a purpose connected with an activity referred to in section 2(3) of the Energy Act 2008 (unloading and storage of combustible gas);

(c)a purpose connected with an activity referred to in section 17(2) of that Act (storage of carbon dioxide).

(4) In this article—

“ controlled waters ” means the part of the territorial sea that is between the landward limit of the territorial sea and the line that is 3 nautical miles seaward of the landward limit of the territorial sea;

“ territorial sea ” means the territorial sea of the United Kingdom;

“ territorial sea adjacent to England ” means the part of the territorial sea that is not adjacent to Northern Ireland, Scotland or Wales.

(5) In this article, a reference to England, Northern Ireland, Scotland or Wales includes a reference to waters adjacent to England or, as the case may be, Northern Ireland, Scotland or Wales that are landward of the landward limit of the territorial sea.

Meaning of regulator: aircraft operators_I11

11.—(1) This article applies for the purposes of article 9.

(2) Subject to articles 12 and 13 the regulator of an aircraft operator is—

(a)the Environment Agency, where the aircraft operator —

(i)has its registered office or place of residence in England; or

(ii)does not have a registered office or a place of residence in the United Kingdom;

(b)NRW, where the aircraft operator has its registered office or place of residence in Wales;

(c)SEPA, where the aircraft operator has its registered office or place of residence in Scotland;

(d)the chief inspector, where the aircraft operator has its registered office or place of residence in Northern Ireland.

Aircraft operator: change in regulator_I12

12.—(1) This paragraph applies where—

(a) an aircraft operator (“A”) does not have a registered office or a place of residence in the United Kingdom;

(b) “B” is the regulator of A; and

(c) a different regulator (“C”) is satisfied that the highest percentage of aviation emissions of A in the 2023 and 2024 scheme years is attributable to flights departing from aerodromes situated in the area of C.

(2) Where paragraph (1) applies, on or before 30th June 2025, C must give notice to—

(a)A;

(b)B; and

(c)the UK ETS authority,

that C is the regulator of A from [^F501st January 2026^F50] .

(3) A notice under paragraph (2) must be accompanied by evidence demonstrating that the highest percentage of aviation emissions of A in the 2023 and 2024 scheme years is attributable to flights departing from aerodromes situated in the area of C.

(4) In this article, “ area ” in relation to a regulator, means—

(a)in respect of the Environment Agency, England;

(b)in respect of the NRW, Wales;

(c)in respect of the SEPA, Scotland;

(d)in respect of the chief inspector, Northern Ireland.

Aircraft operator: change in registered office_I13

13.—(1) Where—

(a) an aircraft operator (“A”) with a registered office or a place of residence in the area of a regulator, in the course of the 2021-2025 allocation period, changes the address of its registered office or place of residence to the area of a different regulator (“R”); and

(b)A's registered office or place of residence is in the area of R at the end of the 2021-2025 allocation period,

R is the regulator of A from [^F511st January 2026^F51] .

(2) Where—

(a) an aircraft operator (“B”) which did not have a registered office or a place of residence in the United Kingdom at the beginning of the 2021-2025 allocation period acquires a registered office or a place of residence in the United Kingdom in the course of that period; and

(b) at the end of the 2021-2025 allocation period that registered office or place of residence is in the area of a regulator (“S”) who is not the regulator of B in that allocation period,

S is the regulator of B from [^F521st January 2026^F52] .

(3) In this article “ area ” has the same meaning as in article 12.

[^F53Meaning of regulator: maritime operators

13A.—(1) This article applies for the purposes of article 9.

(2) The regulator of a maritime operator is—

(a)the Environment Agency, where the maritime operator—

(i)has its registered office or place of residence in England; or

(ii)does not have a registered office or a place of residence in the United Kingdom;

(b)NRW, where the maritime operator has its registered office or place of residence in Wales;

(c)SEPA, where the maritime operator has its registered office or place of residence in Scotland;

(d)the chief inspector, where the maritime operator has its registered office or place of residence in Northern Ireland.^F53]

Meaning of UK ETS authority, etc._I14

^M20 14. —(1) A reference in this Order to the “ UK ETS authority ” is a reference to all of the national authorities .

(2) Functions conferred or imposed by this Order on the “UK ETS authority” may be exercised—

(a)by all of the national authorities jointly; or

(b)by one of the national authorities (or by more than one of the national authorities jointly) on behalf of the other national authorities with their agreement.

(3) Where this Order provides for a person to do anything in relation to the “UK ETS authority” (for example, to give a notice to the UK ETS authority), it is sufficient for the person to do it in relation to any of the national authorities.

(4) Each national authority is an administrator of the UK ETS for the purposes of paragraph 21 of Schedule 2 to CCA 2008.

[^F54 (5) In this article, a reference to this Order includes a reference to the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation and the Activity Level Changes Regulation.^F54]

Applications, notices, etc._I15

15.—(1) Part 1 of Schedule 3 (which makes provision in relation to applications, notices and reports submitted to a regulator) has effect.

(2) Part 2 of Schedule 3 (which makes provision in relation to notices given by a regulator, a national authority or the UK ETS authority) has effect.

PART 2 Basic elements of the UK ETS

CHAPTER 1 Establishment of the UK ETS and requirement for review

UK Emissions Trading Scheme_I16

16. —(1) This Order establishes a trading scheme, known as the “UK Emissions Trading Scheme” or “UK ETS”.

^M21(2) The purpose of the UK ETS is to limit, or encourage the limitation of, the emission of greenhouse gases in the trading period from the carrying out of—

(a)^F55regulated activities by operators of installations; ...

(b)aviation activities by aircraft operators;

[^F56 (c)maritime activities by maritime operators.^F56]

Review of UK ETS_I17

17.—(1) The UK ETS authority must before each review date—

(a)carry out a review of the operation of the UK ETS;

(b)publish a report setting out the conclusions of the review.

(2) The review dates are 31st December 2023 and 31st December 2028.

(3) The report must in each case—

(a)review the operation of the UK ETS (including assessing the extent to which the purpose of the UK ETS is being achieved);

(b)make any recommendations that the UK ETS authority considers appropriate as to the future operation and purpose of the UK ETS.

CHAPTER 2 Allowances and caps

Allowances_I18

18.—(1) The UK ETS authority may [^F57create allowances in the registry^F57] for the purposes of the UK ETS.

(2) An allowance is an allowance to emit 1 tonne of carbon dioxide equivalent.

[^F58 (3) Allowances may be held only in accounts in the registry.^F58]

Cap for trading period_I19

19. The number of allowances created in the trading period may not exceed the sum of—

(a)[^F59 633,116,297^F59] multiplied by the 2021-2025 hospital and small emitter reduction factor; and

(b)[^F60 312,248,470^F60] multiplied by the 2026-2030 hospital and small emitter reduction factor.

Cap for scheme years_I20

20.[^F61—(1) The number of allowances created in a scheme year may not exceed ^F62...—

(a)the base for the scheme year multiplied by—

(i)if the scheme year is in the 2021-2025 allocation period, the 2021-2025 hospital and small emitter reduction factor;

(ii)if the scheme year is in the 2026-2030 ^F63... period, the 2026-2030 hospital and small emitter reduction factor; ^F64...

^F65(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F61]

[^F66 (2) But the restriction in paragraph (1) does not apply to the creation of allowances—

(a)for the flexible reserve (see article 23A);

(b)for the new entrants’ reserve (see article 34G);

(c)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.^F66]

(3)[^F67 Nothing in this article overrides^F67] article 19.

Cap: hospital and small emitter reduction factors_I21

21.—(1) This article applies for the purposes of articles 19 and 20.

(2) The 2021-2025 hospital and small emitter reduction factor is (RE₁– SI₁)/RE₁, where—

RE₁is the total reportable emissions (within the meaning of GGETSR 2012) in 2016, 2017 and 2018 of all installations (within the meaning of GGETSR 2012) and all UK aircraft operators (within the meaning of GGETSR 2012);
SI₁is the total reportable emissions (within the meaning of GGETSR 2012) in 2016, 2017 and 2018 of all installations included in the hospital and small emitter list for 2021-2025.

(3) The 2026-2030 hospital and small emitter reduction factor is (RE₂- SI₂)/RE₂, where—

RE₂is the total reportable emissions and the total aviation emissions, expressed in tonnes, in the 2021, 2022 and 2023 scheme years of all installations and all aircraft operators;
SI₂is the total reportable emissions in the 2021, 2022 and 2023 scheme years of all installations included in the hospital and small emitter list for 2026-2030.

(4) In this article, a reference to reportable emissions or aviation emissions is a reference to reportable emissions or aviation emissions—

(a)verified [^F68as satisfactory^F68] in accordance with the Verification Regulation 2012 or the Verification Regulation 2018;

[^F69 (aa)determined under regulation 44 of GGETSR 2012 or article 45 of this Order;^F69]

(b)where relevant, set out in an emissions report accompanied by the notice or declaration referred to in paragraph 3(8)(b)(ii) of Schedule 5 to GGETSR 2012 or paragraph 11(2)(b)(ii) of Schedule 7 to this Order; or

(c)where relevant, considered to be verified under regulation 35(7) of GGETSR 2012 or article 33(2) of this Order.

Cap: base for scheme years

22. For the purposes of article 20, the base for a scheme year set out in column 1 of table B is the value set out in the corresponding entry in column 2.

Table B_I22

Column 1	Column 2
Scheme year	Base
2021	155,671,581
2022	151,437,134
2023	147,202,686
2024	[^F70 92,062,882^F70]
2025	[^F71 86,742,014^F71]
2026	[^F72 80,063,992^F72]
2027	[^F73 72,317,337^F73]
2028	[^F74 55,618,096^F74]
2029	[^F75 52,964,678^F75]
2030	[^F76 51,284,366^F76]

Trading in allowances_I23

case23. Allowances may be traded, except where prohibited by other legislation.

[^F77Flexible 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 ^F78...) 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 [^F79 or Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025^F79] to be allocated in respect of all installations for all scheme years in the [^F80 2026 allocation period and the 2027-2030 allocation period^F80] ;

(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;

[^F81 (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.^F81]

(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) [^F82 or in accordance with article 8 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025^F82] ;

(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.^F77]

CHAPTER 3 Monitoring, reporting and verification

Monitoring and reporting of emissions_I24

24.[^F83—(1)^F83][^F84 The Monitoring and Reporting Regulation 2018^F84] has effect for the purpose of the UK ETS, subject to the modifications in Schedule 4 and to Part 4 (see also paragraph 13 of Schedule 7 which makes further modifications in relation to hospitals and small emitters and paragraph 5 of Schedule 8 which makes further modifications in relation to ultra-small emitters).

[^F85 (2) Paragraph (1) does not apply to the monitoring and reporting of maritime emissions.^F85]

[^F86Verification of data and accreditation of verifiers _I25

25.—(1) The Verification Regulation 2018 has effect for the purpose of the UK ETS, subject to the modifications in Schedule 5 (see also paragraph 4 of Schedule 8 which makes further modifications in relation to ultra-small emitters).

[^F88 (2) Paragraph (1) does not apply to the verification of maritime emissions.^F88^,^F86]]

[^F89CHAPTER 4 Registry

Registry

25A. Schedule 5A (registry) has effect.^F89]

PART 3 Installations

Installations: requirement for permit to carry out regulated activity_I26

26.—(1) No person may carry out a regulated activity at an installation in a scheme year unless the operator of the installation holds a greenhouse gas emissions permit or a hospital or small emitter permit for the installation that authorises the regulated activity to be carried out.

(2) Paragraph (1) does not apply to a regulated activity carried out at an installation in a scheme year for which the installation is an ultra-small emitter.

(3) Schedule 6 (which provides for applications for greenhouse gas emissions permits and generally for permits) has effect.

(4) Schedule 7 (which provides for hospitals and small emitters) has effect.

(5) Schedule 8 (which provides for ultra-small emitters) has effect.

Installations: requirement to surrender allowances_I27

27. Where the operator of an installation holds a greenhouse gas emissions permit, the operator must surrender allowances in accordance with the surrender condition of the permit for each scheme year (or part of a scheme year) that the permit is in force.

[^F90Installations: information to be submitted [^F91on or before 30 June 2025^F91] where no application for free allocation, etc. is made _I28

27A.—(1) This article applies where the operator of an installation referred to in paragraph (2) does not make an application under [^F92 either of the following provisions or complete the first stage of an application under Article 4 of the Free Allocation Regulation (free allocation in 2027-2030 allocation period)^F92] —

(a)paragraph 5 of Schedule 7 (hospital or small emitter status for 2026-2030 ^F93... period);

(b)paragraph 3 of Schedule 8 (ultra-small emitter status for 2026-2030 ^F94... period);

^F95(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The installations are—

(a)an installation for which a permit is issued on or before 30th June [^F96 2025^F96] ;

(b)an installation that is an ultra-small emitter for the [^F96 2025^F96] scheme year;

(c)an installation for which an application for a permit has been made but not yet determined.

(3) The operator must submit the following to the regulator—

(a)details of the installation, including details of any permit in force;

(b)activity information (that is to say, the information set out in section 1.3 of Annex 4 to the Free Allocation Regulation);

(c)details of eligibility for free allocation (that is to say, the information set out in section 1.4 of Annex 4 to the Free Allocation Regulation);

(d)a statement that the operator is not applying for free allocation in the [^F97 2027-2030^F97] allocation period under Article 4 of the Free Allocation Regulation.

(4) The information referred to in paragraph (3) must be submitted in the period beginning on 1st April [^F98 2025^F98] and ending on 30th June [^F98 2025^F98] .

(5) The regulator must send the information submitted by the operator to the UK ETS authority on or before 30th September [^F99 2025^F99] .^F90]

PART 4 Aviation

Application for emissions monitoring plans_I29

case 28. —(1) An aircraft operator must [^F100 , and any other person may, ^F100] apply to the regulator for a plan setting out how the [^F101 applicant’s ^F101] aviation emissions are to be monitored for the purposes of this Order (“an emissions monitoring plan”).

(2)[^F102 A person who^F102] has previously been issued with an emissions monitoring plan or a GGETSR emissions plan may not make an application under paragraph (1) without the agreement of the regulator (but see article 29(3)).

(3) An application under paragraph (1) is the means by which [^F103 a monitoring plan is submitted ^F103] to the regulator for approval under Article 12 of the Monitoring and Reporting Regulation 2018[^F104 ; and where such an application is made by a person who is not an aircraft operator, Articles 12 and 13 of, and Annex 1 to, that Regulation have effect as if “aircraft operator” included such an applicant ^F104] .

(4) An aircraft operator must comply with the requirement in paragraph (1) before the end of the period of 42 days commencing with the day it becomes an aircraft operator.

Issue of emissions monitoring plans_I30

29.—(1) If an aircraft operator[^F105 or other person^F105] applies for an emissions monitoring plan in accordance with article 28(1) and (2), the regulator must issue the emissions monitoring plan unless—

(a)the regulator is not satisfied that the application complies with the Monitoring and Reporting Regulation 2018; and

(b)the [^F106applicant^F106] has not agreed to amendments of the application required to satisfy the regulator that the application does so comply.

(2) An emissions monitoring plan issued under paragraph (1) replaces any emissions monitoring plan previously issued to the [^F107applicant^F107] .

(3) The regulator may issue an emissions monitoring plan to a person who was a UK administered operator for the purpose of GGETSR 2012 and held a GGETSR emissions plan.

(4) Subject to paragraph (5), an emissions monitoring plan issued under paragraph (3) must be in substantially the same terms as the GGETSR emissions plan.

(5) An emissions monitoring plan must contain any conditions that the regulator considers necessary to give proper effect to the Monitoring and Reporting Regulation 2018 and the Verification Regulation 2018.

Refusal of application for emissions monitoring plans_I31

30.—(1) If the regulator refuses an application for an emissions monitoring plan the regulator must give notice to the applicant.

(2) A notice under paragraph (1) must state—

(a)the reasons for the decision; and

(b)if amendments of the application are required in order for an emissions monitoring plan to be issued, the nature of those amendments.

(3) An aircraft operator who is given a notice under paragraph (1) must make a revised application to the regulator before the end of the period of 31 days beginning with the day that the notice was given.

(4) Article 29 and this article apply to a revised application [^F108to which paragraph (5) applies^F108] as they apply to the original application, but for the purposes of such a revised application, the references to the period of 2 months in paragraph 2 of Schedule 3 are to be read as references to a period of 24 days.

[^F109 (5) This paragraph applies to—

(a)a revised application under paragraph (3);

(b)where the regulator refuses an application for an emissions monitoring plan by a person who is not an aircraft operator, a revised application made by the person before the end of the period of 31 days beginning with the day on which the notice under paragraph (1) is given.^F109]

Variation of emissions monitoring plans_I32

31.—(1) An aircraft operator—

(a)may apply to the regulator to vary its emissions monitoring plan;

(b)must apply to the regulator to vary its emissions monitoring plan where required to do so by a condition of the emissions monitoring plan.

(2) A variation applied for under paragraph (1) is given effect by the regulator giving notice to the aircraft operator.

(3) Paragraphs (1) and (2) do not affect the operation of any condition of an emissions monitoring plan that allows an aircraft operator to make a variation without applying to the regulator.

(4) The regulator may, by giving notice to an aircraft operator, make any variation of the aircraft operator's emissions monitoring plan that the regulator considers necessary in consequence of a report made by the aircraft operator under Article 69(4) of the Monitoring and Reporting Regulation 2018.

(5) The regulator may, by giving notice to an aircraft operator, vary the aircraft operator's emissions monitoring plan where the aircraft operator has failed to comply with a requirement in the emissions monitoring plan to make or apply for such a variation.

(6) The regulator may, by giving notice to an aircraft operator, vary the aircraft operator's emissions monitoring plan by modifying, adding or removing a condition if the regulator considers it necessary to do so to give proper effect to the Monitoring and Reporting Regulation 2018 or the Verification Regulation 2018.

(7) In this article references to an aircraft operator include any person who has been issued with an emissions monitoring plan.

Monitoring emissions and emissions monitoring plan conditions_I33

32.—(1) Each aircraft operator must monitor its aviation emissions in accordance with—

(a)the Monitoring and Reporting Regulation 2018; and

(b)its emissions monitoring plan, including any written procedures required by Article 12 of the Monitoring and Reporting Regulation 2018.

(2) Each aircraft operator must comply with any condition included in its emissions monitoring plan under article 29(5) or 31(6).

Reporting aviation emissions_I34

33.—(1) A person who is an aircraft operator in relation to a scheme year must prepare a report of its aviation emissions for that scheme year in accordance with the Monitoring and Reporting Regulation 2018; the report must be verified [^F110as satisfactory^F110] in accordance with the Verification Regulation 2018.

(2) The obligation for the report to be [^F111verified as satisfactory in accordance^F111] with the Verification Regulation 2018 does not apply, and the aviation emissions stated in the report are considered to be verified, where the person required to prepare the report in relation to a scheme year—

(a)had emissions of carbon dioxide for that scheme year amounting to either—

(i)less than 25,000 tonnes from full-scope flights; or

(ii)less than 3,000 tonnes from aviation activity; and

(b)determined its emissions using the small emitters tool approved under Commission Regulation (EU) No 606/2010, the tool having been populated with data by Eurocontrol.

(3) The report prepared under paragraph (1) [^F112(and the verification report)^F112] must be submitted to the regulator on or before 31st March in the year following the scheme year to which it relates.

Surrender of allowances by aircraft operators_I35

case34.—(1) A person who is an aircraft operator in relation to a scheme year must surrender, on or before 30th April in the following year, an amount of allowances equal to its aviation emissions in that scheme year (expressed in tonnes).

^F113(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F114(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F115PART 4ZA Maritime

Application of the Order to maritime

34ZA. Schedule 2A has effect.^F115]

[^F116PART 4A Free Allocation

CHAPTER 1 Installations

Allocation tables [^F117for 2021-2025 and 2027-2030 allocation periods^F117]

34A. —(1) The UK ETS authority must compile a table (an “allocation table”) for [^F118 the 2021-2025 allocation period and the 2027-2030 allocation period ^F118] as soon as reasonably practicable after approval under Article 16b of the Free Allocation Regulation of the final annual number of allowances to be allocated in respect of installations—

(a)in the case of the allocation table for the 2021-2025 allocation period, in respect of which a deemed application for free allocation in the 2021-2025 allocation period (as defined in Article 2(19) of that Regulation) is made;

(b)in the case of the allocation table for the [^F119 2027-2030^F119] allocation period, in respect of which an application for free allocation in the [^F119 2027-2030^F119] allocation period is made under Article 4 of that Regulation [^F120 subject to paragraph (1A)^F120] .

[^F121 (1A) Where Article 16(1a) of the Free Allocation Regulation applies the UK ETS authority must—

(a)as soon as reasonably practicable after approval under Article 16b of the Free Allocation Regulation of the final annual number of allowances to be allocated in 2027, compile an allocation table for the 2027-2030 allocation period which contains entries for the 2027 scheme year only; and

(b)as soon as reasonably practicable after approval under Article 16b of the Free Allocation Regulation of the final annual number of allowances to be allocated in the 2028, 2029 and 2030 scheme years, update the allocation table for the 2027-2030 allocation period to include entries for the 2028, 2029 and 2030 scheme years.^F121]

(2) The allocation table for the 2021-2025 allocation period must contain an entry for each relevant installation.

(3) For the purposes of paragraph (2), an installation is a “relevant” installation if—

(a)a deemed application for free allocation in the 2021-2025 allocation period (as defined in Article 2(19) of the Free Allocation Regulation) is made in respect of the installation that the UK ETS authority subsequently informs the regulator is valid; or

(b)an application for free allocation in the 2021-2025 allocation period is made in respect of the installation under Article 5(1)(a) of the Free Allocation Regulation that the UK ETS authority subsequently informs the regulator is valid.

(4) But an installation referred to in paragraph (3)(a) is not a “relevant” installation if—

(a)the installation is included in the hospital and small emitter list for 2021-2025 or the ultra-small emitter list for 2021-2025;

(b)the installation ceases operation (within the meaning of GGETSR 2012) on or before 31st December 2020; or

(c)the installation's permit (within the meaning of GGETSR 2012) is revoked under regulation 14 of GGETSR 2012 on or before that date.

(5) The allocation table for the [^F122 2027-2030^F122] allocation period must contain an entry for each relevant installation.

(6) For the purposes of paragraph (5), an installation is a “relevant” installation if—

(a)an application for free allocation in the [^F123 2027-2030^F123] allocation period is made in respect of the installation under Article 4 of the Free Allocation Regulation that the UK ETS authority subsequently informs the regulator is valid [^F124 under Article 15a(4) of the Free Allocation Regulation^F124] ; or

(b)an application for free allocation in the [^F125 2027-2030^F125] allocation period is made in respect of the installation under Article 5(1)(b) of the Free Allocation Regulation that the UK ETS authority subsequently informs the regulator is valid.

(7) But an installation referred to in paragraph (6)(a) is not a “relevant” installation if—

(a)the installation is included in the hospital and small emitter list for 2026-2030 or the ultra-small emitter list for 2026-2030;

(b)the installation ceases operation on or before 31st December [^F126 2026^F126] ; or

(c)the installation's permit is revoked under paragraph 12 of Schedule 6 on or before that date.

(8) The entry for an installation must set out—

(a)the installation identifier used in the registry;

(b)[^F127 subject to paragraph (1A), for^F127] each scheme year in the allocation period, the final annual number of allowances to be allocated in respect of the installation for the scheme year, in 3 columns as follows (see article 34B)—

(i)column A (standard free allocation);

(ii)column B (new entrants' reserve);

(iii)column C (total).

[^F128Allocation table for 2026 allocation period

34AA.—(1) The UK ETS authority must compile an allocation table for the 2026 allocation period.

(2) The allocation table must contain an entry for each relevant installation.

(3) For the purpose of paragraph (2), an installation is a “relevant” installation if—

(a)the installation is a type 1 2026 incumbent;

(b)in the case of an installation that is a type 2 2026 incumbent, an application for free allocation in the 2027-2030 allocation period is made in respect of the installation under Article 4 of the Free Allocation Regulation that the UK ETS authority subsequently informs the regulator is valid under article 7(9) of the 2025 Order; or

(c)an application for free allocation in the 2026 allocation period is made in respect of the installation under Article 5(1)(b) of the Free Allocation Regulation that the UK ETS authority subsequently informs the regulator is valid.

(4) But an installation referred to in paragraph (3)(a) or (b) is not a “relevant” installation if—

(a)the installation ceases operation on or before 31st December 2025; or

(b)the installation’s permit is revoked under paragraph 12 of Schedule 6 on or before that date.

(5) The entry for an installation must set out—

(a)the installation identifier used in the registry;

(b)the final annual number of allowances to be allocated in respect of the installation for the 2026 scheme year, in 3 columns as follows—

(i)column A (standard free allocation);

(ii)column B (new entrants’ reserve);

(iii)column C (total).

(6) Where, in the case of an installation that is a type 1 2026 incumbent, the final annual number of allowances to be allocated in respect of the installation for the 2026 scheme year has not, at the date on which the allocation table is compiled, been approved under article 6 of the 2025 Order because the question of whether any adjustment to free allocation under the Activity Level Changes Regulation is required in consequence of the 2025 ALC obligation has not yet been considered, the entry for the installation must set out—

(a) the final annual number of allowances to be allocated in respect of the installation for the 2025 scheme year that would have been approved under article 6 of the 2025 Order if, in the definition of “ALC adjustment” in paragraph (9) of that article, “up to and including activity levels in 2024” were omitted;

(b)that the figure referred to in sub-paragraph (a) is provisional.

(7) If the entry for an installation in the allocation table includes a provisional figure under paragraph (6), where, after the date on which the allocation table is compiled, any adjustment to free allocation that might be required under the Activity Level Changes Regulation in consequence of the 2025 ALC obligation falls to be considered—

(a)article 6 of the 2025 Order applies without the modification set out in paragraph (6) so as to require the final annual number of allowances to be allocated in respect of the installation for the 2026 scheme year to be calculated and approved for the purpose of inclusion in the entry for the installation in any updated allocation table in accordance with article 34C(1)(k) without the need to set out that the figure is provisional;

(b)the Activity Level Changes Regulation must be read as not requiring any adjustment to free allocation for the 2026 scheme year to be calculated or approved in consequence of the 2025 ALC obligation.

(8) In this article—

“ 2025 ALC obligation ” means the obligation in Article 3 of the Activity Level Changes Regulation to report on 2024 activity levels on or before 31st March 2025;

“ 2025 Order ” means the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025 ;

“ type 1 2026 incumbent ” and “ type 2 2026 incumbent ” have the same meanings as in Part 2 of the 2025 Order. ^F128]

Allocation tables: supplementary

34B.—(1) This article applies for the purposes of article 34A(8)(b) [^F129 or 34AA(5)(b)^F129] .

(2) Where the final annual number of allowances to be allocated in respect of an installation is approved under Article 16b of the Free Allocation Regulation [^F130 or Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025^F130] , that number must be included in column A.

(3) Where the final annual number of allowances to be allocated in respect of an installation is approved under Article 18a of that Regulation [^F131 or under paragraph 4 of Schedule 8A to this Order^F131] , that number must be included in column B.

[^F132 (3A) Where the final annual number of allowances to be allocated in respect of an installation is approved 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), any increase in the number previously approved must be added to the amount included in column A or, if the installation is a new entrant (as defined in point (22) of Article 2(1) of the Free Allocation Regulation), to the amount included in column B.^F132]

(4) Paragraphs (5) and (6) apply where a calculation (a “relevant calculation”) of the final annual number of allowances to be allocated in respect of the installation for a scheme year is approved by the UK ETS authority under either or both of the following—

(a)Article 24(3)(a)(ii) of the Free Allocation Regulation (renunciation other than in respect of whole installation);

(b)Article 6a of the Activity Level Changes Regulation.

(5) If the effect of the relevant calculation is a final annual number of allowances to be allocated in respect of the installation for the scheme year that is greater than the number that would otherwise be set out in the entry for the installation for the scheme year, the net increase must be added to the amount that would otherwise be included in column B.

(6) If the effect of the relevant calculation is a final annual number of allowances to be allocated in respect of the installation for the scheme year that is less than the number that would otherwise be set out in the entry for the installation for the scheme year, the net decrease must be deducted first from any amount that would otherwise be included in column B, before being deducted from any amount that would otherwise be included in column A.

(7) The total final annual number of allowances to be allocated in respect of the installation for the scheme year (that is to say, the sum of columns A and B) must be included in column C.

[^F133 (8) If an entry for an installation in the allocation table for the 2026 allocation period includes a provisional figure under article 34AA(6), that figure must be included in column C (and no figure is to be included in column A or B).^F133]

Allocation tables: updates

34C.—(1) The UK ETS authority must update an allocation table to take account of any approval of the UK ETS authority under—

(a)Article 18a of the Free Allocation Regulation (new entrants);

(b)Article 6a of the Activity Level Changes Regulation (activity level changes);

(c)Article 24 of the Free Allocation Regulation (renunciation);

(d)Article 25 of that Regulation (mergers and splits);

^F134(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)article 34H of this Order (installations: errors in applications for free allocation, etc.).

[^F135 (g)paragraph 4 of Schedule 8A to this Order (former hospital or small emitters and ultra-small emitters).^F135]

[^F136 (h)Article 5c(7) of the Activity Level Changes Regulation (activity level changes: average activity level omitting 2020 data);

(i)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);^F136]

[^F137 (j)Article 2b(6) of the Free Allocation Regulation (electricity generators that state they will not produce electricity for sale for consumption outside the installation but subsequently do so);^F137]

[^F138 (k)Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025;^F138]

[^F139 (l)where Article 16(15) of the Free Allocation Regulation applies (including as applied by Article 16(17)), Article 16b of that Regulation (incumbent installations).^F139]

(2) To avoid doubt, the UK ETS authority may update an allocation table under paragraph (1) so as to increase or reduce the final annual number of allowances to be allocated in respect of an installation for a scheme year after allowances have already been allocated in respect of the installation for the scheme year under article 34E. (See article 34S in relation to the return of allowances where the number of allowances to be allocated in respect of an installation for a scheme year is reduced after allowances for the scheme year have been allocated, for example, because of a decrease in activity levels.)

Allocation tables: publication, etc.

34D.—(1) The UK ETS authority must notify the registry administrator of an allocation table as soon as reasonably practicable after it is compiled and of an updated allocation table as soon as reasonably practicable after it is updated.

(2) The UK ETS authority must publish the allocation table for the 2021-2025 allocation period as soon as reasonably practicable after it is compiled and in any event before 30th June 2021.

[^F140 (2A) The UK ETS authority must publish the allocation table for the 2026 allocation period as soon as reasonably practicable after it is compiled and in any event before 1st January 2026.^F140]

(3)[^F141 Subject to paragraph (3A), the^F141] UK ETS authority must publish the allocation table for the [^F142 2027-2030^F142] allocation period as soon as reasonably practicable after it is compiled and in any event before [^F143 1st January 2027^F143] .

[^F144 (3A) Where article 34A(1A) applies, the UK ETS authority must publish—

(a)the allocation table referred to in article 34A(1A)(a) as soon as reasonably practicable after it is compiled and in any event before 1st January 2027; and

(b)the updated allocation table referred to in article 34A(1A)(b) as soon as reasonably practicable after it is compiled and in any event before 1st January 2028.^F144]

(4) The UK ETS authority must publish an updated allocation table as soon as reasonably practicable after the allocation table is updated.

(5) Paragraphs (2) to (4) are subject to article 75C (national security).

Allocation of allowances

34E.—(1) The registry administrator must allocate allowances in respect of an installation in accordance with the allocation table by transferring allowances to the operator holding account for the installation.

(2) Allowances—

(a)for the 2021 scheme year must be allocated as soon as reasonably practicable after the allocation table for the 2021-2025 allocation period is published;

(b)for any other scheme year must be allocated on or before 28th February in that year.

(3) Where, after allowances for a scheme year have been allocated in respect of an installation in accordance with paragraph (2), an update to the allocation table results in an increase in the final annual number of allowances to be allocated in respect of the installation for the scheme year, the increased number of allowances must be allocated as soon as reasonably practicable.

(4) This article is subject to—

(a)article 34F (no allocation unless monitoring methodology plan approved);

(b)article 34G(2) (new entrants' reserve);

(c)article 34W (notice to withhold allowances).

No allocation unless monitoring methodology plan approved

34F.—(1) Where a monitoring methodology plan has not been approved in relation to an installation under Article 8 of the Free Allocation Regulation, the regulator may, by notice to the registry administrator, require the registry administrator to withhold allowances that would otherwise have been allocated in respect of the installation under article 34E.

(2) Where a notice under paragraph (1) is given, no allowances may be allocated in respect of the installation set out in the notice until the regulator gives a further notice to the registry administrator, which must be given as soon as reasonably practicable after a monitoring methodology plan is approved.

New entrants' reserve

34G.—(1) The new entrants' reserve is a reserve of [^F145 20,725,431^F145] allowances for the trading period [^F146 from which allowances may be allocated until the reserve is exhausted^F146] .

[^F147 (1A) Allowances from the new entrants’ reserve—

(a)unless used as mentioned in sub-paragraph (b), must be used for allocation in respect of installations in accordance with paragraphs (2) to (5);

(b)may be used 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 (even if the allocation exhausts the new entrants’ reserve before the end of the trading period).^F147]

(2) The number of allowances set out in column B of an allocation table must be allocated from the new entrants' reserve until the new entrants' reserve is exhausted, after which no allocation may be made for a scheme year in respect of allowances set out in that column.

(3) Where an allocation table or an updated allocation table requires an allocation to be made from the new entrants' reserve in respect of more than one installation, allowances must be allocated in accordance with paragraphs (4) and (5) (until the new entrants' reserve is exhausted).

[^F148 (4) Allowances must first be allocated in respect of sub-installations of installations in respect of which the historical activity level of the sub-installation has been determined, in chronological order of the date (and, where relevant, time)—

(a)where the historical activity level was determined under Article 15 of the Free Allocation Regulation, of the approval by the UK ETS authority of the final annual number of allowances to be allocated in respect of the installation under paragraph 4 of Schedule 8A (free allocation for former hospital or small emitters and ultra-small emitters);

(b)where the historical activity level was determined under [^F149 paragraph 4(2) of Schedule 8A,^F149] Article 17(1) of the Free Allocation Regulation or Article 3a(2) of the Activity Level Changes Regulation, on which the operator submitted sufficient information to enable the historical activity level of the sub-installation to be determined.^F148]

(5) Allowances must next be allocated in respect of sub-installations of installations in respect of which the historical activity level of the sub-installation has not been so determined, in chronological order of the date (and, where relevant, time) on which the operator submitted sufficient information to enable the activity level of the sub-installation to be determined for the purposes of Article 18(2) of the Free Allocation Regulation or under Article 3a(3) of the Activity Level Changes Regulation.

(6) Where allowances to which a person is not entitled (see article 34S) are allocated from the new entrants' reserve, for the purposes of this article, those allowances must be treated as not having been allocated from the new entrants' reserve, to the extent that an equal number of allowances are transferred or returned in accordance with a notice under article 34U or 34V [^F150 or returned voluntarily without the need for such a notice to be given^F150] .

(7) For the purposes of this article, each regulator must—

(a)keep such records as the regulator considers appropriate to enable the chronological order referred to in paragraph (4) or (5) to be determined;

(b)provide any information required by the UK ETS authority or the registry administrator to enable allowances to be allocated in accordance with this article.

(8) In this article, “ historical activity level ” and “ sub-installation ” have the same meanings as in the Free Allocation Regulation.

Installations: errors in applications for free allocation, etc.

34H.—(1) This article applies where the regulator considers that, as a result of a relevant error—

(a)either—

(i)the final annual number of allowances set out in an allocation table to be allocated in respect of an installation for a scheme year; or

(ii)the number of allowances allocated in accordance with an allocation table under article 34E in respect of an installation for a scheme year,

is materially greater, or materially less, than the number that would otherwise have been set out in the table but for the relevant error; or

(b)there has been a failure to include an entry for an installation in an allocation table.^F151]

(2) In this article, “ relevant error ” means—

(a)an error in an application for free allocation made in respect of an installation under Article 4 or 5 of the Free Allocation Regulation (including a deemed application for free allocation in the 2021-2025 allocation period as defined in Article 2(19) of that Regulation);

(b)an error in an [^F152 activity level or other report^F152] submitted by the operator of an installation under the Activity Level Changes Regulation;

(c)an error of the regulator or the UK ETS authority in the exercise of functions under this Order (including under this article), [^F153 Part 2 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025,^F153] the Free Allocation Regulation or the Activity Level Changes Regulation.

(3) The regulator may do any of the following—

(a)determine the historical activity level of a sub-installation of the installation that the regulator considers would have been determined for the purposes of the UK ETS but for the relevant error;

(b)calculate the preliminary annual number of allowances to be allocated in respect of a sub-installation of the installation for the scheme year that the regulator considers would have been calculated for the purposes of the UK ETS but for the relevant error;

(c)calculate the final annual number of allowances to be allocated in respect of a sub-installation of the installation for the scheme year that the regulator considers would have been calculated for the purposes of the UK ETS but for the relevant error.

(4) For the purposes of paragraph (3), the regulator may make a conservative estimate of the value of any relevant parameter; and if the regulator does so, the regulator must give notice of the value to the operator.

(5) Where the regulator does any of the things referred to in paragraph (3), the regulator must send to the UK ETS authority—

(a)details of the relevant error;

(b)any determination or calculation referred to in paragraph (3);

(c)the regulator's recalculation of the final annual number of allowances to be allocated in respect of the installation of which the sub-installation is part for the scheme year, taking account of the determination or calculation referred to in paragraph (3).

(6) If the UK ETS authority considers [^F154 that there is a relevant error and, as a result of the relevant error, the circumstances referred to in paragraph (1)(a) or (b) apply in relation to the installation^F154] , the UK ETS authority must—

(a)approve the final annual number of allowances to be allocated in respect of the installation for the scheme year, making any corrections to the historical activity level, preliminary annual number of allowances or final annual number of allowances determined or calculated by the regulator that the UK ETS authority considers appropriate; and

(b)inform the regulator accordingly.

(7) The regulator must give notice to the operator of the installation—

(a)of the relevant error;

(b)of the final annual number of allowances approved;

(c)where the relevant error was the error of including an entry for the installation in an allocation table for an allocation period, that the installation is not an _dfnFA installation for [^F155 the 2021-2025 allocation period or, as the case may be, an FA installation for the 2026 and 2027-2030 allocation periods^F155] .

(8) In this article, “ historical activity level ” and “ sub-installation ” have the same meanings as in the Free Allocation Regulation.

[^F156Free 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.^F156]

CHAPTER 2 Aviation _cross-notes

Interpretation

34I.—(1) In this Chapter—

“ Annex 1 activities ” means activities listed under “Aviation” in Annex 1 to the Directive;

“attributable” must be construed in accordance with article 34J(4);

“aviation free allocation entitlement” must be construed in accordance with article 34K;

“business reorganisation” must be construed in accordance with paragraph (2);

“ historical aviation activity level ” has the meaning given in article 34J;

“ special reserve application ” means an application for a free allocation of allowances under the EU ETS from the special reserve referred to in Article 3f of the Directive;

“ tonne-kilometre ” has the meaning given in Article 3(3) of the Monitoring and Reporting Regulation 2018;

“transferor”, “ transferee ” and “ relevant transferee ” must be construed in accordance with paragraph (2).

(2) For the purposes of this Chapter—

(a) where a part of a person's business responsible for performing an aviation activity has been transferred to another person, the person has been subject to a “business reorganisation” that affects the aviation activity; and, in relation to the aviation activity, the first person is the “transferor” and the second person is a “transferee”;

(b) where there has been a business reorganisation affecting an aviation activity, a transferee is the “ relevant transferee ” in relation to that aviation activity where the transferee has not been subject to a further business reorganisation affecting the aviation activity.

Meaning of historical aviation activity level and attributable

34J.—(1) A person's historical aviation activity level is—

(a)the number of tonne-kilometres of aviation activity performed by the person in 2010;

(b)in the case of a person who fell within Article 3f(1)(a) of the Directive and made a successful special reserve application, the number of tonne-kilometres of aviation activity performed by the person in 2014; or

(c)in the case of a person who fell within Article 3f(1)(b) of the Directive and made a successful special reserve application, the sum of—

(i)the number of tonne-kilometres of aviation activity performed by the person in 2010; and

(ii)the person's aviation activity ratio multiplied by the difference between [^F157 the number of tonne-kilometres of Annex 1 activities performed by the person in 2014^F157] and the person's threshold figure.

(2) In this article, a person's—

^F158...

[^F159 “ aviation activity ratio ” means the number of tonne-kilometres of aviation activity performed by the person in 2014 divided by the number of tonne-kilometres of Annex 1 activities performed by the person in 2014; ^F159]

“ threshold figure ” means the number of tonne-kilometres of Annex 1 activities performed by the person in 2010 multiplied by 1.93877776.

(3) A tonne-kilometre of aviation activity or Annex 1 activities performed by a person in 2014 is not to be counted in a total for the purposes of this article if it would have been excluded by the words following point (b) in Article 3f(1) of the Directive (exclusion where activity a continuation of activity performed by another) from forming the basis of an application for free allocation of allowances under the EU ETS.

(4) A person's historical aviation activity level is “attributable” to a person (“A”) for the purposes of this Chapter if and to the extent that—

(a)there has been no business reorganisation affecting aviation activity relevant to the historical aviation activity level and A is the person who performed that aviation activity; or

(b)there has been a business reorganisation affecting aviation activity relevant to the historical aviation activity level and in relation to that aviation activity A is the relevant transferee.

Aviation: entitlement to free allocation in 2021-2025 allocation period

34K. A person is only entitled to a free allocation of allowances under this Chapter for scheme years—

(a)in the 2021-2025 allocation period; ^F160...

(b)in relation to which the person is an _dfnaircraft [^F161 operator; and^F161]

[^F162 (c)in relation to allowances allocated for the 2024 or 2025 scheme year, to the extent that the number of allowances does not exceed the person’s aviation emissions for the scheme year,^F162]

and references in this Chapter to a person's “aviation free allocation entitlement” must be construed accordingly.

Application for aviation free allocation entitlement _cross-notes

34L. —(1) A person (the “applicant”) may apply for an aviation free allocation entitlement in reliance on the historical aviation activity level of one or more persons being attributable to the applicant immediately before 1st January 2021.

(2) Where an applicant can rely on a person's historical aviation activity level within article 34J(1)(a) or (c), the applicant may choose which to rely on but may not rely on both.

(3) An application under paragraph (1) must include—

(a)for each person on whose historical aviation activity level the applicant relies, a statement as to whether it is the person's historical aviation activity level within article 34J(1)(a), (b) or (c);

(b)verified tonne-kilometre data as follows—

(i)where the applicant relies on a person's historical aviation activity level within article 34J(1)(a), verified tonne-kilometre data for the person's Annex 1 activities performed in 2010;

(ii)where the applicant relies on a person's historical aviation activity level within article 34J(1)(b), verified tonne-kilometre data for the person's Annex 1 activities performed in 2014;

(iii)where the applicant relies on a person's historical aviation activity level within article 34J(1)(c), verified tonne-kilometre data for the person's Annex 1 activities performed in 2010 and 2014;

(c)if there has been no business reorganisation affecting an aviation activity included in the verified tonne-kilometre data, a statement of that fact;

(d)if there has been a business reorganisation affecting an aviation activity included in the verified tonne-kilometre data, evidence of that business reorganisation;

(e)where the application relies on a person's historical aviation activity level within article 34J(1)(b) or (c), the other information that was included in the person's special reserve application and evidence that the application was successful.

(4) In this article, “ verified tonne-kilometre data ” means—

(a)a tonne-kilometre data report containing the information set out in section 3 of Annex 10 to Commission Regulation (EU) 2018/2066 (as it has effect in EU law), together with a verification report in relation to it containing the information set out in Article 27 of Commission Implementing Regulation (EU) 2018/2067 (as it has effect in EU law); or

(b)where paragraph (5) applies, the items submitted to the regulator under that paragraph.

(5) This paragraph applies where—

(a)the applicant submits to the regulator the same items as the applicant submitted for the purpose of an application for free allocation of allowances under the EU ETS;

(b)the previously submitted data included in the items referred to in sub-paragraph (a) was produced and verified in accordance with whichever of the following applied in relation to that previous submission—

(i)Commission Decision 2007/589/EC of 18 July 2007 establishing guidelines for the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council;

(ii)the Monitoring and Reporting Regulation 2012 and the Verification Regulation 2012; and

(c)the applicant submits to the regulator a statement from the competent authority to which the data was submitted for the purpose of the application referred to in sub-paragraph (a) confirming that the data was not altered before the free allocation was calculated.

(6)[^F163 An application^F163] [^F163 Unless paragraph (7) applies, an application^F163] under this article must be submitted to the regulator on or before 31st March 2021.

[^F164 (7) A person who did not submit an application under this article on or before 31st March 2021 but who may be entitled to a free allocation of allowances on the basis of historical aviation activity level due to aviation activity within paragraph 1(1)(c) of Schedule 1 may submit an application under this article for a free allocation of allowances on or before 31st March 2023.

(8) An application made under paragraph (7) may not be made on the basis of historical aviation activity level due to any aviation activity other than aviation activity within paragraph 1(1)(c) of Schedule 1.^F164]

Processing of applications and calculation of aviation free allocation entitlement

34M.—(1) Where an application is made in accordance with article 34L, the regulator must submit to the UK ETS authority—

(a)the application and any related information the regulator holds; and

[^F165 (b)a calculation of the applicant's aviation free allocation entitlement for each scheme year in the 2021-2025 allocation period, applying paragraphs (2) to (6).^F165]

[^F165 (b)a calculation of the applicant’s aviation free allocation—

(i)for each scheme year in the 2021-2025 allocation period, or

(ii)where the application is made in accordance with article 34L(7), for the 2023, 2024 and 2025 scheme years in that allocation period,

applying paragraphs (2) to (6);^F165]

(2) The number of allowances that make up an applicant's aviation free allocation entitlement for each scheme year in the 2021-2025 allocation period is 0.000642186914222035 multiplied by the applicant's historical aviation activity figure multiplied by the reduction factor for the scheme year.

(3) The applicant's “historical aviation activity figure” is the sum of all persons' historical aviation activity levels that are—

(a)attributable to the applicant immediately before 1st January 2021 [^F166 in relation to flights departing from Great Britain and arriving in an aerodrome in Switzerland before that date^F166] ; and

(b)relied on for the purposes of the application.

(4) In determining whether and to what extent a person's historical aviation activity level is attributable to the applicant, it is permissible to have regard to whether the person's historical aviation activity level is relied on for the purposes of any other application under article 34L and, if so, to the information included in that application.

(5) For the purpose of this article, the reduction factor for a scheme year set out in column 1 of table B1 is the value set out in the corresponding entry in column 2.

Table B1 _cross-notes

Column 1 Scheme year	Column 2 Reduction factor
2021	0.978
2022	0.956
2023	0.934
2024	0.912
2025	0.89

(6) The result of each calculation referred to in paragraph (2) must be expressed as the nearest integer, taking 0.5 as nearest to the previous integer.

[^F167 (6A) The regulator must recalculate the aviation free allocation entitlement for the 2023, 2024 and 2025 scheme years in relation to each person who had made an application under article 34L (“ A ”) before article 34L(7) came into force, to take into account any historical aviation activity level attributable to A due to aviation activity within paragraph 1(1)(c) of Schedule 1 immediately before 1st January 2021.

(6B) The regulator may, by notice submitted to A, request A to produce such information specified in the notice, within the reasonable period so specified, as may be necessary to enable the regulator to make the recalculation required under paragraph (6A).

(6C) The regulator must, as soon as reasonably practicable and in any event before 30th June 2023, submit the recalculation made under paragraph (6A) to the UK ETS authority, with—

(a)sufficient information to identify A; and

(b)any other information related to the recalculation which the regulator holds.

(6D) Paragraph (6C) does not apply if A fails, without reasonable excuse, to provide any information requested under paragraph (6B) within the period specified in the notice, or such later period as may be agreed with the regulator.^F167]

(7) The UK ETS authority must—

(a)approve the applicant's aviation free allocation entitlement [^F168 or an increase in that entitlement following recalculation under paragraph (6A)^F168] , making any corrections to the calculation referred to in paragraph (1)(b) [^F169 or the recalculation referred to in paragraph (6A)^F169] that the UK ETS authority considers appropriate;

(b)inform the regulator accordingly.

Aviation allocation table for 2021-2025 allocation period

34N.—(1) The UK ETS authority must compile an aviation allocation table for the 2021-2025 allocation period as soon as reasonably practicable after 31st March 2021.

(2) The aviation allocation table must contain an entry for each person with an aviation free allocation entitlement, as approved by the UK ETS authority under article 34M.

(3) The person's entry must set out—

(a)the person's full name and Eurocontrol Central Route Charges Office identification number;

(b)the person's aviation free allocation entitlement for each scheme year in the 2021-2025 allocation period.

[^F170 (4) The UK ETS authority must update the aviation allocation table to take account of any approval of the UK ETS authority under article 34Q (transfers of allocations) or article 34R (errors in aviation allocation table) [^F171 of this Order or under article 29 of the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2021 (aviation: recalculation of aviation free allocation entitlement of certain applicants)^F171] [^F172 , article 42 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024 or article 34M of this Order (as applied by article 43 of that Order)^F172] .^F170]

[^F170 (4) The UK ETS authority must update the aviation allocation table to take account of any approval of the UK ETS authority under—

(a)article 34M(7)—

(i)of the applicant’s aviation free allocation entitlement following an application made in reliance on article 34L(7);

(ii)of an increase in a person’s aviation free allocation following a recalculation by the regulator under article 34M(6A); or

(b)article 34Q (transfers of allocations) or article 34R (errors in aviation allocation table).^F170]

(5) To avoid doubt, the UK ETS authority may update the aviation allocation table under paragraph (4) so as to increase or reduce the number of allowances to be allocated to a person for a scheme year after allowances have already been allocated to the person for the scheme year under article 34O. (See article 34T in relation to the return of allowances where the number of allowances to be allocated to a person for a scheme year is reduced after allowances for the scheme year have been allocated.)

(6) The UK ETS authority must notify the registry administrator of the aviation allocation table as soon as reasonably practicable after it is compiled and of an updated aviation allocation table as soon as reasonably practicable after it is updated.

(7) The UK ETS authority must publish the aviation allocation table as soon as reasonably practicable after it is compiled and must publish an updated aviation allocation table as soon as reasonably practicable after it is updated.

(8) Paragraph (7) is subject to article 75C (national security).

Aviation: allocation of allowances for 2021-2025 allocation period

34O.—(1) The registry administrator must allocate allowances in accordance with this article.

(2) Subject to paragraphs (3) to (8), allowances must be allocated in accordance with the aviation allocation table—

(a)for the 2021 scheme year, as soon as reasonably practicable after the aviation allocation table is published;

(b)for any other scheme year, on or before 28th February in that year.

(3) Allowances must not be allocated to a person unless and until the person has an aircraft operator holding account; they must be allocated by transferring them to that account.

(4) The regulator may, by notice to the registry administrator, require the registry administrator to withhold allowances that would otherwise have been allocated to a person for the 2022 scheme year or a subsequent scheme year if, in relation to the year before, the person was not an aircraft operator.

(5) If allowances for a scheme year are withheld from a person in accordance with paragraph (4) but the person becomes an aircraft operator in relation to that scheme year—

(a)the regulator must as soon as reasonably practicable, by further notice to the registry administrator, withdraw the notice under paragraph (4); and

(b)the allowances must be allocated as soon as reasonably practicable after the registry administrator receives the further notice.

(6) Where, after allowances for a scheme year have been allocated to a person, an update to the aviation allocation table results in an increase in the number of allowances to be allocated to the person for the scheme year, the increased number of allowances must be allocated as soon as reasonably practicable.

(7) Where a number of allowances (“N”) has been allocated in accordance with this article for a scheme year in relation to which the person to whom they were allocated was not an aircraft operator, the regulator may give notice to the registry administrator requiring the registry administrator to deduct allowances from any allocation to be made to the person under this article until the sum of—

(a)the allowances so deducted; and

(b)allowances allocated for that scheme year that have been returned in accordance with a notice given under article 34U or 34V because the person was not an aircraft operator in relation to that scheme year,

is equal to N.

(8) Allowances may also be withheld under article 34W (notice to withhold allowances).

Permanent cessation of aviation activity

34P.—(1) This paragraph applies if the regulator is satisfied that—

(a)a person has ceased to perform aviation activity; and

(b)there is no realistic prospect that the person will resume aviation activity.

(2) Where paragraph (1) applies—

(a)the regulator must inform the UK ETS authority; and

(b)the UK ETS authority must update the aviation allocation table to record that the person has permanently ceased to perform aviation activity.

Transfers of aviation free allocation entitlement

34Q.—(1) This article applies where a person with an aviation free allocation entitlement has been subject to a business reorganisation affecting aviation activity that was relevant to the approval of the UK ETS authority under article 34M.

(2) The relevant transferee in relation to the aviation activity may apply to the regulator for a transfer of some or all the transferor's aviation free allocation entitlement.

(3) An application under paragraph (2) must—

(a)include evidence of the business reorganisation;

(b)identify what part of the aviation free allocation entitlement (expressed as a whole number of allowances) should be transferred to the applicant, justified by reference to the business reorganisation;

(c)include confirmation that each person who is a transferor or transferee in relation to aviation activity affected by the business reorganisation is aware of the application.

(4) Where an application is made in accordance with paragraph (3), the regulator must submit to the UK ETS authority—

(a)the application and any related information the regulator holds; and

(b)a calculation as to what part of the entitlement to free allocation (expressed as a whole number of allowances) should be transferred to the applicant, applying paragraphs (5) and (6).

(5) The aviation free allocation entitlement to be transferred is what would have been the transferee's aviation free allocation entitlement under article 34M in respect of aviation activity affected by the business reorganisation had the business reorganisation taken place before 1st January 2021, except that—

(a)for each complete scheme year before the business reorganisation took place, the aviation free allocation entitlement to be transferred is zero;

(b)for the scheme year in which the business reorganisation took place, what would have been the transferee's aviation free allocation entitlement is to be calculated as if article 34M(6) did not apply, then adjusted on a pro rata basis according to when the business reorganisation took place, with the result expressed as the nearest integer, taking 0.5 as nearest to the previous integer.

(6) In determining what part of the entitlement to free allocation should be transferred to the applicant, it is permissible to have regard to any application under this article and any representations made by a person who, in relation to aviation activity affected by the business reorganisation, is a transferor or transferee.

(7) The UK ETS authority must—

(a)approve the transfer of some or all of the transferor's free allocation entitlement to the transferee with effect from a specified date, making any corrections to the calculation referred to in paragraph (4)(b) that the UK ETS authority considers appropriate; and

(b)inform the regulator accordingly.

(8) The regulator must give notice to the applicant, and any person who has made representations for the purposes of paragraph (6), of the outcome of the application.

Errors in aviation allocation table

34R.—(1) This article applies where the regulator considers that, as a result of a relevant error—

(a)the number of allowances set out in the aviation allocation table as a person’s aviation free allocation entitlement for a scheme year is materially greater, or materially less, than the number that would otherwise have been set out in the table but for the relevant error; or

(b)there has been a failure to include an entry for a person with an aviation free allocation entitlement in the aviation allocation table.^F173]

(2) In this article, “ relevant error ” means—

(a)an error in an application under article 34L or 34Q [^F174 or under article 43 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024^F174] ;

(b)an error of the regulator or the UK ETS authority in the exercise of functions under this Order (including under this article) [^F175 or article 42 or 43 of the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024^F175] .

(3) The regulator must calculate the number of allowances that, in the regulator's opinion, make up the person's correct aviation free allocation entitlement for the scheme year.

(4) The regulator must send to the UK ETS authority—

(a)details of the relevant error;

(b)the calculation referred to in paragraph (3).

(5) If the UK ETS authority considers that [^F176 there is a relevant error and, as a result of the relevant error, the circumstances referred to in paragraph (1)(a) or (b) apply in relation to the person^F176] , the UK ETS authority must—

(a)approve the person's aviation free allocation entitlement for the scheme year, making any corrections to the calculation referred to in paragraph (3) that the UK ETS authority considers appropriate; and

(b)inform the regulator accordingly.

(6) The regulator must give notice to the person of—

(a)the relevant error;

(b)the person's aviation free allocation entitlement for the scheme year as approved by the UK ETS authority under paragraph (5).

CHAPTER 3 Common provisions

Return of allowances: installations

34S.—(1) This article applies where—

(a)allowances are allocated under article 34E to a person in respect of an installation for a scheme year in accordance with an allocation table; and

(b)the final annual number of allowances set out in the allocation table to be allocated in respect of the installation for the scheme year is subsequently reduced in consequence of an update to the allocation table to take account of any approval of the UK ETS authority under a provision referred to in [^F177 article 34C(1)(a) to (f), (j) or (l)^F177] .

(2) The regulator may give a notice under article 34U or 34V (or both).

(3) For the purposes of this Chapter, the person to whom the allowances are allocated is “not entitled” to any allowances which would not have been allocated in respect of the installation if the allocation table had been updated before the allocation of allowances referred to in paragraph (1)(a).

Return of allowances: aviation

34T.—(1) This article applies where—

(a)allowances are allocated under article 34O to a person for a scheme year in accordance with the aviation allocation table; and

(b)[^F178 any of the following applies^F178] —

(i)the number of allowances set out in the aviation allocation table to be allocated to that person for the scheme year is subsequently reduced in consequence of an update to the aviation allocation table; ^F179...

(ii)the person was not an aircraft operator in relation to the scheme year.

[^F180 (iii)in relation to allowances allocated for the 2024 or 2025 scheme year, the number of allowances allocated to the person for the scheme year exceeds the person’s aviation emissions for the scheme year.^F180]

(2) The regulator may give a notice under article 34U or 34V (or both).

(3) For the purposes of this Chapter, the person to whom the allowances are allocated is “not entitled” to any allowances which—

(a)would not have been allocated if the aviation allocation table had been updated before the allocation of allowances referred to in paragraph (1)(a); ^F181...

(b)are allocated for a scheme year in relation to which the person is not an aircraft operator [^F182 ; or^F182]

[^F183 (c)in relation to allowances allocated for the 2024 or 2025 scheme year, exceed the person’s aviation emissions for the scheme year for which the allowances are allocated.^F183]

Return of allowances: notice to registry administrator

34U.—(1) A notice under this article is a notice to the registry administrator requiring the registry administrator to transfer allowances equal to the number of allowances to which a person is not entitled from the person's operator holding account or aircraft operator holding account to a central account.

(2) The notice must set out—

(a)the number of allowances to which the person is not entitled;

(b)the reason why the person is not entitled to the allowances;

(c)the operator and installation from whose operator holding account, or the person from whose aircraft operator holding account, the transfer must be made.

(3) The registry administrator—

(a)must comply with the notice to the extent that there are sufficient allowances in the person's account;

(b)may suspend other transfers from the account until the notice is complied with.

(4) Paragraph (3)(a) does not apply until the period for bringing an appeal against the notice under article 70 has expired or, if an appeal is brought, until the appeal is determined or withdrawn.

(5) Where the regulator gives a notice under this article to the registry administrator, the regulator must also give a copy of the notice to the person who is not entitled to the allowances.

Return of allowances: notice to operator, etc.

34V.—(1) A notice under this article is a notice to a person requiring the person to return allowances equal to the number of allowances to which the person is not entitled.

(2) The notice must set out—

(a)the number of allowances to which the person is not entitled;

(b)the reason why the person is not entitled to the allowances;

(c)the process by which the allowances must be returned;

(d)the date by which the allowances must be returned.

(3) The person to whom the notice is given must comply with the notice.

(4) Where a notice is given under this article to a transferring operator in respect of allowances to which the transferring operator is not entitled that were allocated before the transfer of a greenhouse gas emissions permit under paragraph 9 of Schedule 6 takes effect, the notice may provide for the transferring operator to transfer allowances to the new operator and for the process by which the allowances must be returned by the new operator; and in such a case the notice must be given to the new operator as well as the transferring operator and both must comply with the notice.

(5) In paragraph (4), “new operator” and “transferring operator” have the meanings given in paragraph 7(5) of Schedule 6.

Notice to withhold allowances

34W. —(1) The regulator may, by notice (a “notice to withhold”) to the registry administrator, require the registry administrator to withhold allowances that would otherwise have been allocated in respect of an installation under article 34E or to a person with an entry in the aviation allocation table under article 34O in any of the following circumstances—

(a)if the regulator is investigating whether the installation has ceased operation;

(b)if the operator of the installation has applied to surrender the installation's permit under paragraph 11 of Schedule 6 but the application has not yet been determined;

(c)if a surrender notice under that paragraph or a revocation notice under paragraph 12 of that Schedule has been given to the operator of the installation but the surrender or revocation of the permit has not yet taken effect;

(d)if an appeal against a revocation notice given to the operator of the installation has been made and has not been determined or withdrawn;

(e)if the regulator is assessing a renunciation notice given by the operator of the installation under Article 24 of the Free Allocation Regulation;

(f)if, following an application for the transfer of the installation's permit under paragraph 7 of Schedule 6, the regulator—

(i)considers that, if the application is granted, there may be a merger or split (as defined in Article 2(17) and (18) of the Free Allocation Regulation); or

(ii)is assessing the reports referred to in Article 25(3) of that Regulation;

(g)in a case where allowances have not already been allocated in respect of the installation for a scheme year, if the regulator is investigating whether, as a result of a relevant error (as defined in article 34H), the final annual number of allowances set out in the allocation table to be allocated in respect of the installation for the scheme year exceeds the number that would otherwise have been set out in the table but for the relevant error;

[^F184 (ga)in relation to allowances that would otherwise have been allocated in respect of the installation for the 2023 scheme year, if the operator of the installation has made an application under Article 5a of the Activity Level Changes Regulation that has not been determined or has been granted an extension of time to make such an application that has not expired;^F184]

[^F185 (gb)if the regulator is investigating for the purposes of Article 2b(4)(b) of the Free Allocation Regulation whether the installation has produced electricity for sale for consumption outside the installation;^F185]

(h)if the regulator is investigating whether the person with an entry in the aviation allocation table has permanently ceased to perform aviation activity under article 34P;

(i)if the regulator is assessing an application under article 34Q for the transfer of some or all of the aviation free allocation entitlement of the person with an entry in the aviation allocation table;

(j)in a case where allowances have not already been allocated to a person for a scheme year under article 34O, if the regulator is investigating whether, but for a relevant error (as defined in article 34R), the number of allowances set out in the aviation allocation table as the person's aviation free allocation entitlement for the scheme year would be materially less.

(2) The notice to withhold must set out the installation referred to in [^F186 paragraph (1)(a) to (gb)^F186] or the person referred to in paragraph (1)(h) to (j).

(3) Where a notice to withhold is given, no allowances may be allocated in respect of the installation set out in the notice, or to the person set out in the notice, until a further notice under paragraph (4) is given.

(4) The regulator may by further notice to the registry administrator withdraw the notice to withhold at any time, and must do so as soon as reasonably practicable after the circumstances for giving the notice to withhold no longer apply and, where relevant, the UK ETS authority has updated the allocation table in consequence of those circumstances.

(5) Where the regulator gives a notice to withhold, the regulator must also give notice to the operator of the installation set out in the notice to withhold, or to the person set out in the notice to withhold, setting out the reasons for giving the notice.

(6) Where the regulator gives a further notice under paragraph (4), the regulator must also give notice to the operator of the installation set out in the notice to withhold, or to the person set out in the notice to withhold, setting out any explanation that the regulator considers appropriate.^F116]

PART 5 Charging

Charges_I36

35.—(1) The regulator[^F187 or the registry administrator^F187] may charge an applicant, operator, aircraft operator[^F188 , maritime operator^F188] or any other person an amount as a means of recovering costs incurred by the regulator[^F187 or the registry administrator^F187] in performing activities in accordance with or by virtue of this Order.

(2) The activities referred to in paragraph (1) include—

(a)giving advice in relation to an application under or by virtue of this Order or any other advice in relation to the operation of the UK ETS;

(b)considering an application under or by virtue of this Order;

(c)issuing, varying, transferring, cancelling, surrendering or revoking a permit;

(d)issuing or varying an emissions monitoring plan;

(e)giving any notice or other document provided for by or under this Order;

(f)receiving any notice or other document provided for by or under this Order;

(g)monitoring compliance with this Order;

(h)making a determination of emissions or aviation emissions under article 45 [^F189, a determination of maritime emissions under article 45A or a determination of the emissions figure for surrender under article 45B^F189] ;

[^F190 (i)estimating the value of a parameter under article 34H(4) of this Order or Article 3(4) of the Activity Level Changes Regulation;

(j)administering an account in the registry.^F190]

(3) A charge under paragraph (1) may include an annual or other periodic charge to an operator[^F191 , aircraft operator or maritime operator^F191] that does not relate to any specific activity.

(4) The regulator[^F192 or the registry administrator^F192] may apply different charges for different categories of person in relation to the same activity.

(5) Payment of a charge is not received until the regulator[^F193 or, as the case may be, the registry administrator^F193] has cleared funds for the full amount due and a charge, if unpaid, may be recovered by the regulator[^F193 or, as the case may be, the registry administrator^F193] as a civil debt.

(6) The regulator[^F194 or the registry administrator^F194] may require a charge to be paid before it carries out the activity to which the charge relates.

(7) If the regulator[^F195 or the registry administrator^F195] does not require a charge to be paid in accordance with paragraph (6), it is payable on demand.

(8)[^F196 Neither the regulator nor the registry administrator is^F196] required to reimburse a charge where—

(a)an activity is not completed; or

(b)the person liable to pay the charge does not remain within the scheme for all of the period in relation to which the charge is payable or has been calculated.

[^F197 (9) In this article, a reference to this Order includes a reference to the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation and the Activity Level Changes Regulation.^F197]

[^F198Charging scheme: regulators _I37

36. —(1) The regulator must publish a document (a “charging scheme”) setting out the charges payable in accordance with article 35(1) or how they will be calculated.

(2) Before publishing a charging scheme, the regulator must—

(a)bring the proposals to the attention of persons likely to be affected by them;

(b)specify the period within which representations or objections to the proposals may be made.

(3) A charging scheme may not be published unless it has been approved by the appropriate national authority.

(4) Where a proposed charging scheme is submitted for approval under paragraph (3), the appropriate national authority—

(a)must consider any representations or objections made under paragraph (2)(b);

(b)may make such modifications to the proposals as the appropriate national authority considers appropriate.

(5) If the regulator proposes to revise a charging scheme in a material way, paragraphs (2) to (4) apply to the revised charging scheme.

(6) Paragraphs (2) to (5) do not apply in relation to a charging scheme published by the Secretary of State.

(7) In this article, “ appropriate national authority ” means—

(a)where the regulator is the Environment Agency, the Secretary of State;

(b)where the regulator is the chief inspector, the Department of Agriculture, Environment and Rural Affairs.

(c)where the regulator is SEPA, the Scottish Ministers;

(d)where the regulator is NRW, the Welsh Ministers.^F198]

[^F198Charging scheme: registry administrator

36A. —(1) The registry administrator must publish a document (a “charging scheme”) setting out the charges payable in accordance with article 35(1) or how they will be calculated.

(2) Before publishing a charging scheme, the registry administrator must—

(a)bring the proposals to the attention of persons likely to be affected by them;

(b)specify the period within which representations or objections to the proposals may be made.

(3) A charging scheme may not be published unless it has been approved by the UK ETS authority.

(4) Where a proposed charging scheme is submitted for approval under paragraph (3), the UK ETS authority—

(a)must consider any representations or objections made under paragraph (2)(b);

(b)may make such modifications to the proposals as the UK ETS authority considers appropriate.

(5) If the registry administrator proposes to revise a charging scheme in a material way, paragraphs (2) to (4) apply to the revised charging scheme.^F198]

Remittance of charges_I38

[^F199 37.—(1) The regulator must pay any charge received in accordance with a charging scheme under article 36 to the appropriate national authority (as defined in paragraph (7) of that article).

(2) Paragraph (1) does not apply to a charge received by the Secretary of State.

(3) The registry administrator must pay any charge received in accordance with a charging scheme under article 36A to the UK ETS authority.^F199]

PART 6 Monitoring compliance

Authorised persons_I39

38.—(1) The regulator may authorise a person to exercise, on behalf of the regulator and in accordance with the terms of the authorisation, the regulator's powers set out in this Part.

(2) In this Part, “ authorised person ” means a person authorised under—

(a)paragraph (1); or

(b)^M22section 108(1) of the Environment Act 1995 .

Inspections_I40

39.—(1) The regulator[^F200 or an authorised person^F200] may, at a reasonable time, inspect any premises and any thing in or on those premises in order to monitor compliance with this Order [^F201, the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation^F201] .

(2) Reasonable prior notice must be given before exercising the powers in this article.

(3) A person in control of the premises to which the regulator or authorised person reasonably requires access must allow the regulator or authorised person to have such access.

(4) The regulator or authorised person may, when inspecting premises—

(a)make any such examination and investigation as may be necessary;

(b)install or maintain monitoring equipment or other apparatus;

(c)request the production of any record;

(d)take measurements, photographs, recordings or copies of any thing;

(e)take samples of any articles or substances found in, or on, the premises and of the air, water or land in, on, or in the vicinity of, those premises;

(f)request any person at the premises to provide facilities or assistance to the extent that is within that person's control.

(5) Except to the extent agreed by the person in control of a place or premises, the power referred to in paragraph (1) does not apply to—

(a)a prohibited place [^F202within the meaning of Part 1 of the National Security Act 2023^F202] ; or

(b)any other premises to which the Crown restricts access on the ground of national security.

Powers of entry, etc._I41

40.—(1) The regulator or an authorised person may—

(a)enter any premises with a warrant issued in accordance with article 41, together with any equipment or material as may be required;

(b)when entering premises by virtue of sub-paragraph (a)—

(i)be accompanied by an authorised person and, if considered appropriate, a constable;

(ii)direct that any part of the premises be left undisturbed for so long as may be necessary;

(c)require any person believed to be able to give information relevant to an examination or investigation—

(i)to attend at a place and time specified by the regulator or authorised person;

(ii)to answer questions (in the absence of any person other than those whom the regulator or authorised person allows to be present and a person nominated by the person being asked questions);

(iii)to sign a declaration of truth of the answers given by that person;

(d)require the production of—

(i)records required to be kept under this Order [^F203, the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation^F203] ;

(ii)other records which the regulator or authorised person considers it necessary to see for the purpose of an examination or investigation;

(iii)entries in a record referred to in this sub-paragraph;

(e)inspect and take copies of the records and entries referred to in sub-paragraph (d).

(2) The powers in paragraph (1) may only be exercised where the regulator or an authorised person reasonably believes there has been a failure to comply with the requirements of this Order [^F204, the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation^F204] .

(3) Except to the extent agreed by the person in control of a place or premises, the powers referred to in paragraph (1) do not apply in relation to—

(a)a prohibited place [^F205within the meaning of Part 1 of the National Security Act 2023^F205] ; or

(b)any other premises to which the Crown restricts access on the ground of national security.

(4) It is an offence for a person—

(a)^F206to fail to comply with a requirement imposed pursuant to this article; ...

(b)to prevent any other person from—

(i)appearing before the regulator or an authorised person; or

(ii)answering a question to which the regulator or authorised person requires an [^F207answer; or^F207]

[^F208 (c)intentionally to obstruct the regulator, or an authorised person, in the exercise of a power referred to in paragraph (1).^F208]

(5) A person guilty of an offence under paragraph (4) is liable—

(a)on summary conviction in England and Wales, to a fine;

(b)on summary conviction in Scotland or in Northern Ireland, to a fine not exceeding the statutory maximum;

(c)on conviction on indictment, to a fine.

Warrants_I42

41.—(1) A judge may issue a warrant in relation to any premises for the purpose of article 40(1)(a) where satisfied that—

(a)there are reasonable grounds for the exercise of the power in that sub-paragraph; and

(b)one or more of the conditions in paragraph (2) are fulfilled in relation to the premises.

(2) The conditions referred to in paragraph (1)(b) are that—

(a)the exercise of the power by consent in relation to the premises has been refused;

(b)a refusal of consent to the exercise of the power is reasonably expected;

(c)the premises are unoccupied;

(d)the occupier is temporarily absent from the premises and the case is one of urgency; or

(e)a request for admission to the premises would defeat the purpose of the entry.

(3) A warrant in accordance with this article continues to have effect until the purpose for which it was issued has been fulfilled.

(4) In paragraph (1), “ judge ” means—

(a)in England or Wales, a justice of the peace;

(b)in Northern Ireland, a lay magistrate;

(c)in Scotland, a justice of the peace or sheriff.

Admissible evidence_I43

42.—(1) An answer given by a person in compliance with article 40(1)(c)(ii) is admissible in evidence—

(a)in England, Wales and Northern Ireland, against that person in any proceedings;

(b)in Scotland, against that person in criminal proceedings.

(2) In criminal proceedings in which the person referred to in paragraph (1) is charged with an offence, no evidence relating to the person's answer may be adduced and no question relating to it may be asked by, or on behalf of, the prosecution unless evidence relating to it has been adduced by, or on behalf of, the person.

(3) Paragraph (2) does not apply to an offence under—

(a)^M23section 5 of the Perjury Act 1911 ;

(b)^M24section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 ; or

(c)^M25article 10 of the Perjury (Northern Ireland) Order 1979 .

Legal professional privilege_I44

43. Nothing in this Part requires any person to produce a document which that person would be entitled to withhold the production of on grounds of legal professional privilege.

PART 7 Enforcement

CHAPTER 1 Enforcement notices [^F209, deficit notices^F209] and determination of emissions by regulator

Enforcement notices_I45

case 44. —(1) Where the regulator considers that a person has contravened, is contravening or is likely to contravene a relevant requirement, the regulator may give notice (an “enforcement notice”) to the person.

(2) In paragraph (1), “ relevant requirement ” means—

(a)a requirement imposed on the person by or under—

(i)this Order [^F210, except for Schedule 5A^F210] ;

(ii)the Monitoring and Reporting Regulation 2018;

[^F211 (iii)the Verification Regulation 2018;

(iv)the Free Allocation Regulation;

(v)the Activity Level Changes Regulation.^F211]

(b)a condition of a permit;

(c)a condition of an emissions monitoring plan.

[^F212 (2A) Where the registry administrator considers that a person has contravened, is contravening or is likely to contravene a requirement imposed on the person by or under Schedule 5A, the registry administrator may give notice (an “ enforcement notice ”) to the person. ^F212]

(3) An enforcement notice must set out—

(a)the relevant requirement that the regulator[^F213 , or the requirement imposed by or under Schedule 5A that the registry administrator,^F213] considers has been contravened, is being contravened or is likely to be contravened;

(b)details of the contravention or likely contravention;

(c)the steps that must be taken to remedy the contravention or to ensure that a contravention does not occur;

(d)the period within which the steps must be taken;

(e)information about rights of appeal.

(4) The person to whom the enforcement notice is given must comply with the requirements of the notice within the period set out in the notice.

(5) The regulator[^F214 or the registry administrator^F214] may withdraw an enforcement notice at any time by giving notice of the withdrawal to the person to whom the enforcement notice is given.

[^F215Deficit 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;

[^F216 (c) a person who is a maritime operator in relation to a scheme year (the “relevant scheme year”) fails to surrender allowances in accordance with paragraph 15 of Schedule 2A. ^F216]

(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—

[^F217 (a)the relevant scheme year and—

(i)the installation’s reportable emissions;

(ii)the person’s aviation emissions; or

(iii)the person’s maritime emissions less any surrender deduction,

in that year;

(b)the number of allowances (if any) surrendered in compliance with article 27, the requirements of a surrender or revocation notice, article 34 or paragraph 15 of Schedule 2A (including any surrendered after the date by which allowances were required to be surrendered);

(i)the installation’s reportable emissions;

(ii)the person’s aviation emissions; or

(iii)the person’s maritime emissions less any surrender deduction,

in the relevant scheme year and the number referred to in sub-paragraph (b);^F217]

(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—

(a)to the operator of an installation, if the operator holding account for the installation has been closed under paragraph 27 of Schedule 5A;

(b)to a person who is an aircraft operator in relation to a scheme year, if the person’s aircraft operator holding account has been closed under paragraph 28 of that Schedule;

[^F218 (ba)to a person who is a maritime operator in relation to a scheme year, if the person’s maritime operator holding account has been closed under paragraph 28A of that Schedule;^F218]

(c)in respect of allowances which a transferring operator failed to surrender in a scheme year as a result of an error of the kind referred to in paragraph 10(1) of Schedule 6 (transfer of permits: underreporting discovered after transfer).

(9) In this article—

“new operator” and “transferring operator” have the meanings given in paragraph 7(1) of Schedule 6;

“ transfer date ” has the meaning given in paragraph 9(6) of that Schedule. ^F215]

Determination of reportable emissions or aviation emissions by regulator_I46

45.—(1) The regulator must make a determination of emissions of an installation or an aircraft operator in either of the following circumstances—

(a)if the operator of the installation fails to submit a report of the installation's reportable emissions in accordance with a condition of a permit included under paragraph 4(2)(b) of Schedule 6 or paragraph 11(2)(b) of Schedule 7;

(b)if the aircraft operator fails to submit a report of aviation emissions in accordance with article 33.

(2) Where a verifier states in a verification report under the Verification Regulation 2018 that there are non-material misstatements in the annual emissions report of the operator of an installation or of an aircraft operator that have not been corrected by the operator or the aircraft operator before the verification report is issued—

(a)the regulator must—

(i)assess the misstatements;

(ii)if the regulator considers it appropriate, make a determination of emissions of the installation or the aircraft operator; and

(iii)give notice to the operator or the aircraft operator as to whether or not corrections are required to the annual emissions report and, if corrections are required, set out the corrections in the notice; and

(b)the operator or the aircraft operator must make the information referred to in sub-paragraph (a)(iii) available to the verifier.

(3) The regulator may make a determination of emissions of an installation or of an aircraft operator in any of the following circumstances—

^F219(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)if the operator of the installation fails to submit a report in accordance with paragraph 11(4)(b) of Schedule 6;

(c)if the operator of the installation fails to submit a report in accordance with paragraph 12(5)(b) of Schedule 6;

(d)if the regulator considers that the determination of emissions is necessary for the purpose of imposing, or considering whether to impose, a civil penalty under article 47.

^F220(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) A regulator who makes a determination of emissions must give notice of the determination to the operator, the aircraft operator or the person on whom the civil penalty may be imposed.

(6) A notice of a determination of emissions determines for the purposes of this Order (including for calculating a civil penalty under article 47) the installation's reportable emissions or the aviation operator's aviation emissions for the period to which the determination relates.

(7) Where, after making a determination of emissions (including a rectified determination of emissions, or a further rectified determination of emissions, made under this paragraph), the regulator considers that there is an error in the determination, the regulator must—

(a)withdraw any notice of the determination given under paragraph (5);

(b)make a rectified determination of the emissions; and

(c)give notice of the rectified determination in accordance with paragraph (5),

and paragraph (6) applies to a notice of the rectified determination as it does to the notice of the previous determination.

(8) For the purposes of this article, emissions must be determined on the basis of a set of assumptions designed to ensure that no under-estimation occurs.

[^F221Determination of maritime emissions by regulator

45A. —(1) The regulator must make a determination of emissions of a maritime operator that fails to submit a report of its maritime emissions (the “annual emissions report”) in accordance with paragraph 14 of Schedule 2A.

(2) Where a verifier states in a verification report under paragraph 59 of Schedule 2A that there are non-material misstatements in the annual emissions report of the maritime operator that have not been corrected by the maritime operator before the verification report is issued—

(a)the regulator must—

(i)assess the misstatements;

(ii)if the regulator considers it appropriate, make a determination of emissions of the maritime operator;

(iii)give notice to the maritime operator as to whether or not corrections are required to the annual emissions report and, if corrections are required, set out the corrections in the notice; and

(b)the maritime operator must make the information referred to in sub-paragraph (a)(iii) available to the verifier.

(3) The regulator may make a determination of emissions of the maritime operator if the regulator considers that the determination of maritime emissions is necessary for the purpose of imposing, or considering whether to impose, a civil penalty until article 47.

(4) A regulator who makes a determination under this article must give notice of the determination to the maritime operator or the person on whom the civil penalty referred to in paragraph (3) may be imposed.

(5) A notice of a determination of maritime emissions determines for the purposes of this Order (including for calculating a civil penalty under article 47) the maritime operator’s maritime emissions for the period to which the determination relates.

(6) Where, after making a determination under this article (including a rectified determination of emissions, or a further rectified determination of emissions, made under this paragraph), the regulator considers that there is an error in the determination, the regulator must—

(a)withdraw any notice of the determination given under paragraph (4);

(b)make a rectified determination; and

(c)give notice of the rectified determination in accordance with paragraph (4),

and paragraph (5) applies to a notice of the rectified determination as it does to the notice of the previous determination.

(7) The obligation to give notice of a rectified determination under paragraph (6)(c) does not apply where that person was not a maritime operator in the scheme year to which the determination relates.

(8) For the purposes of this article, emissions must be determined on the basis of a set of assumptions designed to ensure that no under-estimation occurs.^F221]

[^F221Determination of emissions figure for surrender by regulator

45B.—(1) For the purposes of this article, the emissions figure for surrender is the maritime operator’s maritime emissions less its surrender deduction in the scheme year to which the determination relates.

(2) The regulator must make a determination of a maritime operator’s emissions figure for surrender in a scheme year where—

(a)a maritime operator entitled to a surrender deduction failed to calculate the surrender deduction in its annual emissions report correctly or at all; or

(b)the maritime operator’s surrender deduction has been altered as a result of a determination of maritime emissions under article 45A.

(3) A regulator who makes a determination under this article must give a notice of determination of the emissions figure for surrender to the maritime operator.

(4) A notice of a determination of emissions figure for surrender determines for the purposes of this Order (including for calculating a civil penalty under article 47) the maritime operator’s maritime emissions less the surrender deduction for the period to which the determination relates.

(5) Where, after making a determination under this article (including a rectified determination, or a further rectified determination, made under this paragraph), the regulator considers that there is an error in the determination, the regulator must—

(a)withdraw any notice of the determination given under paragraph (3);

(b)make a rectified determination; and

(c)give notice of the rectified determination in accordance with paragraph (3),

and paragraph (4) applies to a notice of the rectified determination as it does to the notice of the previous determination.

(6) The obligation to give notice of a rectified determination under paragraph (5)(c) does not apply where that person was not a maritime operator in the scheme year to which the determination relates.^F221]

CHAPTER 2 Civil penalties

Carbon price_I47

46. —(1) This article applies for the purpose of determining the price (the “carbon price”) per tonne of carbon dioxide equivalent for a scheme year.

(2) The carbon price for the 2021 scheme year is the sum of the relevant amount for each auction of allowances held in the period beginning on 1st January 2021 and ending on 11th November 2021 under regulations made by the Treasury under the Finance Act 2020 divided by the sum of the allowances sold at all those auctions.

(3) In paragraph (2), the relevant amount for an auction is the auction clearing price (that is to say, the price per allowance that, in accordance with the auction rules, each successful bidder must pay, irrespective of the original bid) multiplied by the number of allowances sold at the auction.

(4) The carbon price for the 2022 scheme year or any subsequent scheme year (the “relevant scheme year”) is the average end of day settlement price, calculated over the relevant period, of the December futures contract for the relevant scheme year, as traded on the relevant carbon market exchange.

(5) For the purposes of paragraph (4), the “average” end of day settlement price is calculated by dividing the sum of the end of day settlement price for each day in the relevant period for which an end of day settlement price is published by the number of days in the relevant period for which an end of day settlement price is published.

(6) In paragraphs (4) and (5)—

“ end of day settlement price ”, in relation to a futures contract, means the end of day settlement price per tonne of carbon dioxide equivalent published by the carbon market exchange on which the futures contract is traded;

“ futures contract ” means a futures contract for allowances;

“ relevant carbon market exchange ”, in relation to a relevant scheme year, means the largest carbon market exchange as determined by volume of sales in the relevant period of the December futures contract for the relevant scheme year traded on the exchange;

“ relevant period ” means—

(a)

in relation to the carbon price for the 2022 scheme year, the period beginning on 1st January 2021 and ending on 11th November 2021;

(b)

in relation to the carbon price for the 2023 scheme year and any subsequent scheme year, the 12-month period ending on 11th November in the year preceding the relevant scheme year.

(7) The UK ETS authority must publish the carbon price for the 2021 scheme year on or before 30th November 2021.

(8) The UK ETS authority must publish the carbon price for subsequent scheme years on or before 30th November in the year preceding the scheme year.

Penalty notices_I48

47.—(1) Where the regulator considers that a person is liable to a civil penalty under any of articles 50 to 68 the regulator may impose a civil penalty on the person.

(2) But where the regulator considers that a person is liable to a civil penalty under any of the following, the regulator must impose a civil penalty on the person–—

(a)article 52 (failure to surrender allowances), but only if the person is liable to the excess emissions penalty referred to in article 52(2);

(b)article 54 (hospitals and small emitters: exceeding emissions target), except where paragraph (3) of that article applies;

(c)article 59 (ultra-small emitters: reportable emissions exceeding maximum amount).

[^F222 (d)article 65A (failure to comply with deficit notice), but the regulator is not required to impose the daily penalty under paragraph (2)(b) of that article.^F222]

(3) A civil penalty is imposed on a person by giving a notice (a “penalty notice”) to the person.

(4) Where the civil penalty to which the person is liable consists of a non-escalating penalty only (or where the civil penalty consists of both a non-escalating penalty and a daily penalty, but the regulator decides not to impose a daily penalty), the penalty notice must set out—

(a)the grounds for liability;

(b)the amount of the non-escalating penalty (and, where relevant, how the amount is calculated);

(c) the date by which the non-escalating penalty must be paid (the “due date”), which must not be less than 28 days after the day on which the notice is given;

(d)the person to whom payment must be made (which must be either the regulator or the appropriate national authority);

(e)how payment may be made;

(f)information about rights of appeal.

(5) Where the civil penalty to which the person is liable consists of both a non-escalating penalty and a daily penalty and the regulator considers that the regulator may wish to impose a daily penalty, the regulator must, before giving a penalty notice to the person, first give a notice (an “initial notice”) to the person.

[^F223 (5A) Where the person is liable to a civil penalty under article 53 or 65A, an initial notice may not be given until at least 28 days have expired since—

(a)in the case of a civil penalty under article 53, the day on or before which the person is required to transfer or, as the case may be, surrender allowances;

(b)in the case of a civil penalty under article 65A, the deficit surrender date set out in the deficit notice (see article 44A(3)(d)).^F223]

(6) The initial notice must set out—

(a)the grounds for liability;

(b)the maximum amount of the non-escalating penalty that may be imposed;

(c)that the daily penalty that may be imposed begins to accrue on the day on which the initial notice is given;

(d)the maximum daily rate of the daily penalty and the maximum amount [^F224(if any)^F224] of the daily penalty that may be imposed.

(7) Where, after an initial notice is given to a person, the regulator considers that the total amount of the daily penalty to which the person is liable can be calculated (including where the daily penalty reaches its maximum amount), the regulator may give a penalty notice to the person.

[^F225 (7A) A penalty notice imposing a civil penalty that consists of a daily penalty under [^F226 article 53(2)(b), 64A(2)(b) or 65A(2)(b)^F226] (for which there is no maximum) may be given at such intervals as the regulator considers appropriate.^F225]

(8) The penalty notice must set out—

(a)the grounds for liability;

(b)the amount of the civil penalty (including how the amount is calculated), which may include—

(i)a non-escalating penalty; and

(ii)a daily penalty;

(c) the date by which the civil penalty must be paid (the “due date”), which must not be less than 28 days after the day on which the notice is given;

(d)the person to whom payment must be made (which must be either the regulator or the appropriate national authority);

(e)how payment may be made;

(f)information about rights of appeal.

(9) The person to whom a penalty notice is given must pay the civil penalty set out in the notice to the person set out in the notice on or before the due date.

(10) A civil penalty imposed by a penalty notice is recoverable by the regulator as a civil debt.

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

(a)inform the appropriate national authority of a penalty notice given by the regulator;

(b)pay all sums received or recovered under a penalty notice to the appropriate national authority.

(12) In this article and article 48—

“ appropriate national authority ” means—

(a)

in the case of a penalty notice given by the chief inspector, the Department of Agriculture, Environment and Rural Affairs;

(b)

in the case of a penalty notice given by SEPA, the Scottish Ministers;

(c)

in the case of a penalty notice given by NRW, the Welsh Ministers;

(d)

in any other case, the Secretary of State;

“ daily penalty ” means a daily penalty set out in articles 51(3)(b), [^F227 53(2)(b), ^F227] 55(2)(b), [^F228 60A(2)(b), ^F228] 61(2)(b), 62(2)(b), 63(2)(b), 64(2)(b), [^F229 64A(2)(b), ^F229][^F230 64B(2)(b), 64C(2)(b), 64D(2)(b), 64E(2)(b) ^F230] 65(2)(b) [^F231 , 65A(2)(b) ^F231] or 66(2)(b);

“ non-escalating penalty ” means a civil penalty under articles 50 to 68 that is not a daily penalty.

(13) This article is subject to article 48.

Penalty notices: supplementary_I49

48. —(1) Subject to paragraph (3), a penalty notice imposing a civil penalty under any of articles 50 to 68 (the “relevant provision”) may set out—

(a)a non-escalating penalty of an amount lower than the amount referred to in the relevant provision;

(b)where the civil penalty consists of both a non-escalating penalty and a daily penalty—

(i)a daily penalty based on a daily rate of an amount lower than the amount referred to in the relevant provision; or

(ii)no daily penalty.

(2) Subject to paragraphs (3) and (4), the regulator may, by giving notice to the person to whom a penalty notice is given—

(a)extend the due date for payment set out in the penalty notice;

(b)amend the penalty notice by substituting a lower non-escalating penalty or a daily penalty based on a lower daily rate;

(c)withdraw the penalty notice.

(3) Paragraphs (1) and (2) do not apply to—

(a)a penalty notice imposing the excess emissions penalty referred to in article 52;

(b)a penalty notice imposing a civil penalty under article 54, except where paragraph (3) of that article applies;

(c)a penalty notice imposing a civil penalty under article 59.

[^F232 (d)a penalty notice imposing a civil penalty under article 65A, but if the penalty imposed consists of both a non-escalating penalty and a daily penalty, paragraphs (1) and (2) apply to the notice in relation to the daily penalty only.^F232]

(4) But the regulator may withdraw a penalty notice referred to in paragraph (3) if there is an error in the notice (including an error in the basis on which the civil penalty imposed by the notice is calculated).

Regulator must publish names of persons subject to civil penalty under article 52_I50

49.—(1) The regulator must publish the name of every person on whom the excess emissions penalty referred to in article 52 is imposed as soon as reasonably practicable after—

(a)the expiry of the period for bringing an appeal against the penalty notice imposing the penalty; or

(b)if an appeal is brought, the determination or withdrawal of the appeal.

(2) But paragraph (1) does not apply if, following an appeal, the person is found not to be liable to a civil penalty.

[^F233 (3) This article is subject to article 75C (national security).^F233]

Installations: carrying out regulated activity without permit contrary to article 26_I51

50.—(1) Where a regulated activity that is not authorised by a permit is carried out at an installation in a scheme year, contrary to article 26, the operator of the installation is (after the end of the scheme year) liable to a civil penalty.

(2) Subject to paragraph (3), the civil penalty is CA + (RE x CP), where—

CA is an estimate of the costs avoided by the operator in the scheme year as a result of carrying out the regulated activity without the authorisation of a permit;
RE is an estimate of the installation's reportable emissions in the part of the scheme year during which a regulated activity that was not authorised by a permit was carried out;
CP is the carbon price for the scheme year.

(3) When setting the amount of the civil penalty to be imposed, the regulator may increase the amount calculated under paragraph (2) by a factor designed to ensure that the amount of the civil penalty exceeds the value of any economic benefit that the operator has obtained as a result of failing to comply with article 26.

(4) The regulator must—

(a)estimate CA and RE under paragraph (2); and

(b)exercise the regulator's functions under paragraph (3),

in accordance with a direction given by the relevant national authority under section 52 of CCA 2008.

(5) This article is subject to paragraph 7(6)(b) of Schedule 8.

Installations: failure to comply with conditions of permit, etc._I52

51.—(1) The operator of an installation is liable to the civil penalty referred to in paragraph (3) where the operator fails to comply (or to comply on time) with—

(a)a condition of a greenhouse gas emissions permit;

(b)a condition of a hospital or small emitter permit;

(c)a requirement of a surrender notice set out in paragraph 11(4)(b)(i) or (ii) of Schedule 6;

(d)a requirement of a revocation notice set out in paragraph 12(5)(b)(i) or (ii) of that Schedule.

(2) But an operator is not liable to the civil penalty referred to in paragraph (3) where the failure to comply with a condition of a permit gives rise to liability for a civil penalty under—

(a)article 52;

(b)article 56.

[^F234 (c)article 57.^F234]

(3) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the operator fails to comply with the condition or requirement, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

Failure to surrender allowances_I53

52. —(1) Subject to paragraphs (4) to (9), the operator of an installation[^F235 , an aircraft operator, or a maritime operator ^F235] is liable to the civil penalty (the “excess emissions penalty”) referred to in paragraph (2) where—

(a)in the case of the operator, the operator fails to surrender sufficient allowances, contrary to—

(i)article 27;

(ii)the requirement of a surrender notice set out in paragraph 11(4)(b)(iii) of Schedule 6;

(iii)the requirement of a revocation notice set out in paragraph 12(5)(b)(iii) of that Schedule;

(b)in the case of the aircraft operator, the aircraft operator fails to surrender sufficient allowances, contrary to article 34;

[^F236 (c)in the case of a maritime operator, the maritime operator fails to surrender sufficient allowances, contrary to paragraph 15 of Schedule 2A.^F236]

(2) The excess emissions penalty is £100 multiplied by the inflation factor for each allowance that the operator[^F237 , the aircraft operator, or the maritime operator^F237] fails to surrender.

^F238(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) This paragraph applies where—

(a)the regulator becomes aware that an installation's reportable emissions (as determined by the regulator under article 45) in a scheme year exceed the installation's verified reportable emissions for that year; and

(b)the operator of the installation failed to surrender allowances equal to the difference—

(i)on or before 30th April in the year following the scheme year referred to in sub-paragraph (a); or

(ii)where the end date set out in a surrender notice under paragraph 11 of Schedule 6 or a revocation notice under paragraph 12 of that Schedule falls in the scheme year referred to in sub-paragraph (a), on or before the date set out in the notice for the surrender of allowances.

(5) In paragraph (4), “ verified reportable emissions ” means reportable emissions—

(a)verified in accordance with a condition of a permit included under paragraph 4(2)(b) of Schedule 6 (including for the purpose of complying with the requirements of a surrender notice under paragraph 11, or a revocation notice under paragraph 12, of that Schedule); or

(b)previously determined by the regulator under article 45.

(6) Where paragraph (4) applies, the operator is liable to the civil penalty referred to in paragraph (10) (and not the excess emissions penalty) in respect of the failure to surrender allowances referred to in paragraph (4)(b).

(7) This paragraph applies where the regulator becomes aware that—

(a)an aircraft operator's aviation emissions (as determined by the regulator under article 45) in a scheme year exceed the aircraft operator's verified aviation emissions for that year; and

(b)the aircraft operator failed to surrender allowances equal to the difference on or before 30th April in the year following the scheme year referred to in sub-paragraph (a).

(8) In paragraph (7), “ verified aviation emissions ” means aviation emissions—

(a)verified under article 33(1);

(b)considered verified under article 33(2); or

(c)previously determined by the regulator under article 45.

(9) Where paragraph (7) applies, the aircraft operator is liable to the civil penalty referred to in paragraph (10) (and not the excess emissions penalty) in respect of the failure to surrender allowances referred to in paragraph (7)(b).

[^F239 (9A) This paragraph applies where the regulator becomes aware that—

(a)a maritime operator’s maritime emissions less any surrender deduction (as determined by the regulator under article 45A or 45B) in a scheme year exceed the maritime operator’s verified maritime emissions less any surrender deduction for that year; and

(b)the maritime operator failed to surrender allowances equal to the difference on or before 30th April in the year following the scheme year referred to in sub-paragraph (a).

(9B) In paragraph (9A), “ verified maritime emissions less any surrender deduction ” means maritime emissions and, where appliable, the surrender deduction—

(a)verified under paragraph 14(2) of Schedule 2A; or

(b)previously determined by the regulator under article 45A or 45B.

(9C) Where paragraph (9A) applies, the maritime operator is liable to the civil penalty referred to in paragraph (10) (and not the excess emissions penalty) in respect of the failure to surrender allowances referred to in paragraph (9A)(b).^F239]

(10) The civil penalty is £20 multiplied by the inflation factor for each allowance that the operator[^F240 , the aircraft operator, or the maritime operator^F240] failed to surrender.

(11) For the purposes of this article, the inflation factor is [^F241CPI₂ /CPI_1^F241] or 1, whichever is greater, where—

CPI₂ is the consumer prices index for the [^F242month preceding the month that includes the day on or before which the allowance was required to be surrendered^F242] ;
CPI₁ is the consumer prices index for March 2021.

(12) In paragraph (11), “ consumer prices index ” means—

(a)^M26the all items consumer prices index published by the Statistics Board ; or

(b)if that index is not published for a month, any substituted index or index figures published for that month by the Statistics Board.

Installations: failure to transfer or surrender allowances where underreporting discovered after transfer_I54

53.—(1) A person is liable to a civil penalty where the person fails—

(a)to effect a transfer (or to effect a transfer on time) of allowances, contrary to paragraph 10(3) of Schedule 6 (transfer of permits: underreporting discovered after transfer);

(b)to surrender (or to surrender on time) allowances, contrary to paragraph 10(4) of that Schedule.

[^F243 (2) The civil penalty is—

(a)CP x 1.5 for each allowance that the person fails to transfer or surrender, where CP is the carbon price for the scheme year after the scheme year to which the report referred to in sub-paragraph (1) of paragraph 10 of Schedule 6 relates; and

(b)a daily penalty at a daily rate of £1,000 for each day that sub-paragraph (3) or, as the case may be, (4) of that paragraph has not been complied with, beginning with the day on which the initial notice is given (see article 47(5)).^F243]

Hospitals and small emitters: exceeding emissions target_I55

54.—(1) Where an installation's reportable emissions in a scheme year for which the installation is a hospital or small emitter exceed the installation's emissions target for that year, contrary to paragraph 19 of Schedule 7, the operator of the installation is liable to a civil penalty.

(2) The civil penalty is (RE-ET) x CP, where—

RE is the installation's reportable emissions in the scheme year;
ET is the installation's emissions target for the scheme year;
CP is the carbon price for the scheme year.

(3) For the purposes of article 47(2)(b), this paragraph applies where the regulator considers that the installation's emissions target for the scheme year was incorrectly calculated.

(4) In this article, “ emissions target ” has the meaning given in paragraph 1 of Schedule 7.

Hospitals and small emitters: failure to pay civil penalty for exceeding emissions target_I56

55. —(1) Where the operator of an installation fails to pay a civil penalty (the “first penalty”) under article 54 on or before the due date set out in the penalty notice imposing the first penalty, the operator is liable to a further civil penalty.

(2) The further civil penalty is—

(a)10% of the first penalty; and

(b)a daily penalty at a daily rate of £150 for each day that the operator fails to pay the first penalty beginning with the day on which the initial notice is given, up to a maximum of £13,500.

Hospitals and small emitters: under-reporting of emissions_I57

56.—(1) The operator of an installation is liable to a civil penalty where the installation has unreported emissions in a scheme year for which the installation is a hospital or small emitter, that is to say reportable emissions in the scheme year that—

(a)are not reported in the emissions report submitted for the scheme year under paragraph 11(2)(b) of Schedule 7; but

(b)are determined by the regulator under article 45.

(2) The civil penalty is £5,000 + [^F244(UE x £10 x the inflation factor)^F244] , where—

UE is the unreported emissions in the scheme year (in tonnes of carbon dioxide equivalent);
^F245 ....

[^F246 (3) In this article, “ inflation factor ” has the meaning given in article 52(11), except that CPI ₂ is the consumer prices index (as defined in article 52(12)) for the month preceding the month that includes the day on or before which the emissions report was required to be submitted. ^F246]

Hospitals and small emitters: failure to notify when ceasing to meet criteria_I58

57.—(1) This article applies where—

(a)either—

(i)a hospital-qualifying installation ceases to be an installation that primarily provides services to a hospital in a scheme year for which the installation is a hospital or small emitter; or

(ii)the reportable emissions of an installation (other than a hospital-qualifying installation) in a scheme year for which the installation is a hospital or small emitter exceed the maximum amount; and

(b) the operator of the installation fails to comply (or to comply on time) with a requirement to give notice on or before 31st March in the following year (the “default year”) under a condition of a hospital or small emitter permit included under paragraph 11(3)(a) or (4) of Schedule 7.

(2) Where the operator fails to give notice on or before 31st March in the default year, but does give notice on or before 31st October in that year, the operator is liable to a civil penalty of £2,500.

(3) Where the operator fails to give notice on or before 31st October in the default year—

(a)if there is no penalty year, the operator is liable to a civil penalty of [^F247£2,500^F247] ;

[^F248 (b)if there is a penalty year, subject to paragraph (4A), the operator is liable (after the end of the last penalty year), to a civil penalty of the sum of the avoided compliance costs for all penalty years.^F248]

(4) The avoided compliance costs, for each penalty year, are [^F249((RE – FA) x CP) – PP^F249] , where—

RE is the installation's reportable emissions (determined as if the modification made to Article 38(2) of the Monitoring and Reporting Regulation 2018 by [^F250paragraph 13(4)(a)(i)^F250] of Schedule 7 did not apply) in the penalty year;
[^F251 FA is—
(a)
where—
(i)
an application in respect of the installation was made under the Free Allocation Regulation for free allocation in the same allocation period as the penalty year is in; and

(ii)
the UK ETS authority informed the regulator under Article 15a(4) of that Regulation that the application was valid,

the number of tonnes of carbon dioxide equivalent represented by the final annual number of allowances that would have been allocated under Part 4A in respect of the installation for the penalty year if the installation had not been a hospital or small emitter for the penalty year, disregarding any adjustment to free allocation that might have been made under the Activity Level Changes Regulation;

(b)
in any other case, zero;^F251]
CP is the carbon price for the penalty year;
PP is, where a penalty notice imposing a civil penalty under article 54 in respect of the penalty year has previously been given to the operator, the amount of the civil penalty.

[^F252 (4A) When setting the amount of the civil penalty to be imposed under paragraph (3)(b), the regulator may increase the sum of the avoided compliance costs for all penalty years (before any reduction under article 48) by 10% of the total or £2,500, whichever is higher.^F252]

(5) In this article—

“ hospital-qualifying installation ” has the meaning given in paragraph 1 of Schedule 7;

“ maximum amount ” has the meaning given in that paragraph;

“ penalty year ” means a scheme year for which the installation—

(a)

is a hospital or small emitter; but

(b)

would not have been a hospital or small emitter if, by reason of the matters referred to in paragraph (1)(a)(i) or (ii), the regulator had, in the default year, given a conversion notice as required by paragraph 23(1) to (3) of Schedule 7 to the operator of the installation.

Installations: failure to apply to surrender permit_I59

58. The operator of an installation is liable to a civil penalty of £5,000 where the operator fails to apply (or to apply on time) to surrender a permit, contrary to paragraph 11(1) of Schedule 6.

Ultra-small emitters: reportable emissions exceeding maximum amount_I60

59.—(1) Subject to paragraph (3), where an installation's reportable emissions in a scheme year for which the installation is an ultra-small emitter exceed the maximum amount, the operator of the installation is liable to a civil penalty.

(2) The civil penalty is (RE – maximum amount) x CP, where—

RE is the installation's reportable emissions in the scheme year;
CP is the carbon price for the scheme year.

(3) A civil penalty under this article may be imposed only in respect of—

(a)the first scheme year in [^F253the period beginning with 1st January 2021 and ending with 31st December 2025, or in the 2026-2030 period,^F253] in which the installation's reportable emissions exceed the maximum amount; and

(b)^F254if the following scheme year is in the same ... period, that scheme year.

(4) In this article, “ maximum amount ” has the meaning given in paragraph 1 of Schedule 8.

Ultra-small emitters: failure to notify where reportable emissions exceed maximum amount_I61

60.—(1) Where—

(a) an installation's reportable emissions in a scheme year (the “excess year”) for which the installation is an ultra-small emitter exceed the maximum amount; and

(b) the operator of the installation fails to give notice to the regulator under paragraph 6 of Schedule 8 on or before 31st March in the following year (the “default year”) or at all,

the operator is liable to a civil penalty.

(2)[^F255 Subject to paragraph (5), the civil penalty is^F255] —

^F256(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)[^F257 CA + ((RE – FA) x CP)^F257] for each scheme year (or part of a scheme year) falling within the penalty period (if any), where—

CA is an estimate of the costs avoided by the operator in the scheme year (or part of the scheme year) as a result of carrying out a regulated activity without the authorisation of the relevant permit;
RE is an estimate of the installation's reportable emissions in the scheme year (or part of the scheme year) during which a regulated activity that was not authorised by a permit was carried out;
[^F258 FA is—
(a)
where—
(i)
an application in respect of the installation was made under the Free Allocation Regulation for free allocation in the same allocation period as the penalty year is in;

(ii)
the UK ETS authority informed the regulator under Article 15a(4) of that Regulation that the application was valid; and

(iii)
paragraph 7(5) of Schedule 8 does not apply (ultra-small emitter becoming hospital or small emitter),
the number of tonnes of carbon dioxide equivalent represented by the final annual number of allowances that would have been allocated under Part 4A in respect of the installation for the scheme year (or part of the scheme year) if the installation had not been included in the ultra-small emitter list for 2021-2025 or, as the case may be, the ultra-small emitter list for 2026-2030, disregarding any adjustment to free allocation that might have been made under the Activity Level Changes Regulation;

the number of tonnes of carbon dioxide equivalent represented by the final annual number of allowances that would have been allocated under Part 4A in respect of the installation for the scheme year (or part of the scheme year) if the installation had not been included in the ultra-small emitter list for 2021-2025 or, as the case may be, the ultra-small emitter list for 2026-2030, disregarding any adjustment to free allocation that might have been made under the Activity Level Changes Regulation;

(b)
in any other case, zero;^F258]
CP is the carbon price for the scheme year.

[^F259 (2A) For the purpose of determining the value of FA under paragraph (2)(b) in a case where part of a scheme year falls within the penalty period, the final annual number of allowances that would have been allocated under Part 4A in respect of the installation for that part of the scheme year is the final annual number of allowances that would have been allocated in respect of an installation for the scheme year multiplied by D/Y, where—

D is the number of days in the scheme year in the penalty period;

Y is the number of days in the scheme year.^F259]

(3) The penalty period is the period—

(a)beginning on 1st January in the year following the default year; and

(b)ending on the earlier of the following—

(i)the day before the day on which a permit for the installation comes into force; and

(ii)the last day of the same allocation period as the excess year is in.

(4) But there is no penalty period if—

(a)1st January in the year following the default year is not in the same allocation period as the excess year; or

(b)a permit for the installation is in force on that date.

(5) When setting the amount of the civil penalty to be imposed, the regulator may increase the amount calculated under paragraph (2)(b) by a factor designed to ensure that the amount of the civil penalty exceeds the value of any economic benefit that the operator has obtained as a result of carrying out a regulated activity that was not authorised by the relevant permit.

(6) The regulator must—

(a)estimate CA and RE under paragraph (2); and

(b)exercise the regulator's functions under paragraph (5),

in accordance with a direction given by the relevant national authority under section 52 of CCA 2008.

(7) In this article—

“ maximum amount ” has the meaning given in paragraph 1 of Schedule 8;

“ relevant permit ” means—

(a)

where a hospital or small emitter permit for the installation comes into force before the last day of the same allocation period as the excess year is in, a hospital or small emitter permit;

(b)

in any other case, a greenhouse gas emissions permit.

[^F260Installations: failure to submit information under article 27A

60A.—(1) The operator of an installation is liable to a civil penalty where the operator fails to comply (or to comply on time) with the requirements of article 27A.

(2) The civil penalty is—

(a)£5,000; and

(b)a daily penalty at a daily rate of £500 for each day that the operator fails to comply with the requirements of article 27A, beginning with the day on which the initial notice is given, up to a maximum of £45,000.^F260]

Aviation: failure to apply or make revised application for emissions monitoring plan_I62

61.—(1) An aircraft operator is liable to a civil penalty where the aircraft operator fails—

(a)to apply (or to apply on time) to the regulator for an emissions monitoring plan, contrary to article 28; or

(b)to make a revised application (or to make a revised application on time) for an emissions monitoring plan, where required to do so under article 30(3).

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the application is not submitted or, as the case may be, the revised application is not submitted, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

Aviation: failure to comply with condition of emissions monitoring plan_I63

62.—(1) An aircraft operator is liable to a civil penalty where the aircraft operator fails to comply (or to comply on time) with a condition of an emissions monitoring plan, contrary to article 32(2).

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the person fails to comply with the condition, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

Aviation: failure to monitor aviation emissions_I64

63.—(1) An aircraft operator is liable to a civil penalty where the aircraft operator fails to monitor aviation emissions in accordance with article 32(1).

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the person fails to monitor aviation emissions in accordance with article 32(1), beginning with the day on which the initial notice is given, up to a maximum of £45,000.

Aviation: failure to report aviation emissions_I65

64.—(1) An aircraft operator is liable to a civil penalty where the aircraft operator fails to submit (or to submit on time) a verified report of aviation emissions to the regulator, contrary to article 33(1).

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the report is not submitted, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

[^F261Failure 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.^F261]

[^F262Maritime: failure to apply or make revised application for emissions monitoring plan

64B.—(1) A maritime operator is liable to a civil penalty where the maritime operator fails—

(a)to apply (or to apply on time) to the regulator for an emissions monitoring plan, contrary to paragraph 9 of Schedule 2A; or

(b)to make a revised application (or to make a revised application on time) for an emissions plan, where required to do so under paragraph 11 of Schedule 2A.

(2) The civil penalty is—

(a)£20,000; and

[^F262Maritime: failure to comply with condition of emissions monitoring plan

64C.—(1) A maritime operator is liable to a civil penalty where the maritime operator fails to comply (or to comply on time) with a condition of an emissions monitoring plan, contrary to paragraph 13(2) of Schedule 2A.

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the person fails to comply with the condition, beginning with the day on which the initial notice is given, up to a maximum of £45,000.^F262]

[^F262Maritime: failure to monitor maritime emissions

64D.—(1) A maritime operator is liable to a civil penalty where the maritime operator fails to monitor maritime emissions in accordance with paragraph 13 of Schedule 2A.

(2) The civil penalty is—

(a)£20,000; and

(b)a daily penalty at a daily rate of £500 for each day that the person fails to monitor maritime emissions in accordance with paragraph 13 of Schedule 2A, beginning with the day on which the initial notice is given, up to a maximum of £45,000.^F262]

[^F262Maritime operator: failure to report maritime emissions

64E.—(1) A maritime operator is liable to a civil penalty where the maritime operator fails to submit (or to submit on time) a verified report of maritime emissions to the regulator, contrary to paragraph 14 of Schedule 2A.

(2) The civil penalty is—

(a)£20,000; and

(a)a daily penalty at a daily rate of £500 for each day that the report is not submitted, beginning with the day on which the initial notice is given, up to a maximum of £45,000.^F262]

^F263Failure to comply with enforcement notice ......_I66

^F26465.—(1) A person is liable to a civil penalty where the person fails to comply (or to comply on time) with the requirements of an enforcement notice given ... under article 44.

(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, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

[^F265Failure to comply with deficit notice

65A.—(1) A person is liable to a civil penalty where the person fails to surrender (or to surrender on time) sufficient allowances, contrary to the requirements of a deficit notice given under article 44A.

(2) The civil penalty is—

(a)CP x 1.5 for each allowance not surrendered on or before the deficit surrender date set out in the deficit notice, where CP is the carbon price for the scheme year after the relevant scheme year set out in the notice; and

(b)a daily penalty at a daily rate of £1,000 for each day that the requirements of the deficit notice have not been complied with, beginning with the day on which the initial notice is given (see article 47(5)).^F265]

Failure to comply with information notice_I67

66. —(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 “information notice”) given under article 75.

(2) The civil penalty is—

(a)£5,000; and

(b)a daily penalty at a daily rate of £500 for each day that the person fails to comply with the requirements of the information notice, beginning with the day on which the initial notice is given, up to a maximum of £45,000.

Providing false or misleading information, etc._I68

67. A person is liable to a civil penalty of £50,000 where the person provides false or misleading information, or makes a statement that is false or misleading in a material respect, where the information is provided, or the statement is made—

(a)in an application under this Order;

(b)in compliance with a notice given to the person under this Order;

(c)in a notice that the person is required to give under this Order;

(d)in compliance with a condition of a permit or an emissions monitoring plan;

(e)in a report of aviation emissions under article 33;

[^F266 (f)in a report of maritime emissions under paragraph 14 of Schedule 2A.^F266]

Inspection: refusal to allow access to premises_I69

68. A person in control of premises is liable to a civil penalty of £50,000 where the person does not allow the regulator or authorised person (within the meaning of Part 6) access to the premises contrary to article 39(3).

PART 8 Appeals

Interpretation_I70

69. In this Part—

“ appeal body ” has the meaning given in article 71;

“ decision ” includes a deemed refusal under this Order;

“ notice ” includes—

(a)

in the case of a notice determining an application for a permit or the transfer of a permit, the provisions of any permit attached to the notice; and

(b)

in the case of a notice determining an application for an emissions monitoring plan, the conditions included in the plan issued by the notice.

Right of appeal_I71

70.—(1) Subject to paragraph (3), the following may appeal to the appeal body—

(a)a person who is aggrieved by a decision of the regulator[^F267 or the registry administrator^F267] determining an application made by the person under this Order;

[^F268 (b)a person who is aggrieved by a notice given—

(i)to the person under a provision referred to in paragraph (2);

(ii)to the registry administrator—

(aa)under article 34U in respect of the transfer of allowances from the person's operator holding account or aircraft operator holding account;

(bb)under article 34W(1) in respect of the withholding of allowances that would otherwise have been allocated in respect of an installation of which the person is the operator under article 34E or to the person under article 34O.^F268]

(2) Those provisions are—

(a)article 30(1) (refusal of application for an emissions monitoring plan);

(b)article 31(4), (5) or (6) (variation of an emissions monitoring plan);

[^F269 (ba)article 34H(4) (notice of regulator's estimate of value of parameter);

(bb)article 34V (return of allowances: notice to operator, etc.);^F269]

(c)[^F270 article 44(1) or (2A)^F270] (enforcement notices);

[^F271 (ca)article 44A (deficit notices);^F271]

(d)article 45(5) (determination of reportable emissions by regulator);

[^F272 (da)article 45A(4) (determination of maritime emissions by regulator);

(db)article 45B(3) (determination of emissions figure for surrender by regulator);^F272]

(e)article 47(3) or (7) (penalty notices);

(f)article 75(1) (information notices);

[^F273 (fa)paragraph 11 of Schedule 2A (refusal of application by a maritime operator for an emissions monitoring plan);

(fb)paragraph 12 of Schedule 2A (variation of an emissions monitoring plan issued to a maritime operator);^F273]

(g)paragraph 1(12) of Schedule 3 (application to be treated as being withdrawn);

[^F274 (ga)paragraph 11(5) of Schedule 5A (notice suspending operator holding account);

(gb)paragraph 12(4) of Schedule 5A (notice suspending operator holding account on transfer);

(gc)paragraph 13(4) of Schedule 5A (notice suspending aircraft operator holding account);

[^F275 (gca)paragraph 13A(4) of Schedule 5A (notice suspending maritime operator holding account);^F275]

(gd)paragraph 14(4)(b) of Schedule 5A (notice refusing to open trading account);

(ge)paragraph 16(7)(b) of Schedule 5A (notice refusing to appoint authorised representative);

(gf)paragraph 17(4)(b) of Schedule 5A (notice refusing to change account permission);

(gg)paragraph 18(2) of Schedule 5A (notice suspending access to registry of authorised representative);

(gh)paragraph 19(2) of Schedule 5A (notice removing authorised representative);

(gi)paragraph 25(3) of Schedule 5A (notice suspending account);

(gj)paragraph 29(4) of Schedule 5A (notice closing trading account);^F274]

(h)paragraph 6(4) or (5) of Schedule 6 (variation of permits);

(i)paragraph 10(2) of Schedule 6 (transfer of permits: underreporting discovered after transfer);

[^F276 (ia)paragraph 10A(2) of Schedule 6 (installation to be treated as ceasing operation: regulator’s notice);^F276]

(j)paragraph 12(4) of Schedule 6 (revocation of permits);

(k)paragraph 23(1) or (2) of Schedule 7 (conversion notices);

(l)paragraph 7(2) of Schedule 8 (end of ultra-small emitter status);

(m)paragraph 1(3)(b) or (4)(b) of Schedule 11 (permits under GGETSR 2012).

[^F277 (n)Article 8(6)(b) of the Free Allocation Regulation (notice rejecting monitoring methodology plan);

[^F278 (na)Article 2a(2) of the Activity Level Changes Regulation (sub-installation to be treated as ceasing operation: regulator’s notice);^F278]

(o)Article 3(5) of the Activity Level Changes Regulation (notice of regulator's estimate of value of parameter in activity level report).^F277]

[^F279 (p)Article 12(4)(b) of the _dfnMonitoring and Reporting Regulation 2018 (notice rejecting monitoring plan).^F279]

(3) An appeal under paragraph (1) may not be made to the extent that the decision implements—

(a)a direction given under—

(i)^M27section 40 of the Environment Act 1995 ;

(ii)section 52 of CCA 2008;

(iii)^M28article 11 of the Natural Resources Body for Wales (Establishment) Order 2012 ;

(iv)^M29regulation 40 of the Pollution Prevention and Control (Industrial Emissions) Regulations (Northern Ireland) 2013 ;

(b)a direction given by an appeal body under this Order.

[^F280 (4) To avoid doubt, no appeal may be brought under paragraph (1)(a) in respect of—

(a)a calculation of the regulator under article 34M(1)(b) or 34Q(5)(b);

(b)a preliminary assessment of the regulator under paragraph 5(3) of Schedule 7 or paragraph 3(3) of Schedule 8.^F280]

Appeal body_I72

^M3071.—(1) In an appeal against a decision of SEPA, the appeal body is the Scottish Land Court .

^M31(2) In an appeal against a decision of the chief inspector, the appeal body is the Planning Appeals Commission .

^M32(3) In an appeal against any other decision, the appeal body is the First-tier Tribunal .

[^F281 (4) For the purposes of determining the appeal body to which an appeal against a decision or notice of the registry administrator must be made, the decision or notice must be treated as the decision or notice of the person (or if more than one, any one of them) exercising the functions of the registry administrator in accordance with article 8A(2) to make the decision or give the notice, as set out in the decision or notice.^F281]

Effect of appeals_I73

72.—(1) Subject to [^F282paragraphs (2) to (6)^F282] , the bringing of an appeal under article 70 (right of appeal) suspends the effect of the decision or notice pending the final determination or withdrawal of the appeal.

(2) The bringing of an appeal does not suspend the effect of—

(a)a decision refusing an application;

(b)a deemed refusal;

(c)a notice under—

(i)article 31(4), (5) or (6) (variation of an emissions monitoring plan);

[^F283 (ia)article 34W(1) (notice to withhold allowances);^F283]

(ii)[^F284 article 44(1) or (2A)^F284] (enforcement notices);

[^F285 (iiza)paragraph 12(4), (5) and (6) of Schedule 2A (variation of an emissions monitoring plan issued to a maritime operator);^F285]

[^F286 (iia)paragraph 11(5) of Schedule 5A (notice suspending operator holding account);

(iib)paragraph 12(4) of Schedule 5A (notice suspending operator holding account on transfer);

(iic)paragraph 13(4) of Schedule 5A (notice suspending aircraft operator holding account);

[^F287 (iica)paragraph 13A(4) of Schedule 5A (notice suspending maritime operator holding account);^F287]

(iid)paragraph 14(4)(b) of Schedule 5A (notice refusing to open trading account);

(iie)paragraph 16(7)(b) of Schedule 5A (notice refusing to appoint authorised representative);

(iif)paragraph 17(4)(b) of Schedule 5A (notice refusing to change account permission);

(iig)paragraph 18(2) of Schedule 5A (notice suspending access to registry of authorised representative);

(iih)paragraph 19(2) of Schedule 5A (notice removing authorised representative);

(iii)paragraph 25(3) of Schedule 5A (notice suspending account);

(iij)paragraph 29(4) of Schedule 5A (notice closing trading account);^F286]

(iii)paragraph 6(4) or (5) of Schedule 6 (variation of permits);

(iv)paragraph 23(1) or (2) of Schedule 7 (end of hospital or small emitter status);

(v)paragraph 7(2) of Schedule 8 (end of ultra-small emitter status).

[^F288 (vi)Article 8(6)(b) of the Free Allocation Regulation (notice rejecting monitoring methodology plan).^F288]

[^F289 (vii)Article 12(4)(b) of the _dfnMonitoring and Reporting Regulation 2018 (notice rejecting monitoring plan).^F289]

(3) Where a permit has been granted or varied (following an application for a permit or for the transfer of a permit), the bringing of an appeal against the provisions of the permit or the terms of the variation does not suspend the effect of those provisions or terms.

(4) Where an emissions monitoring plan has been issued following an application under article 28(1) [^F290or paragraph 9(1) of Schedule 2A^F290] , the bringing of an appeal against the conditions included in the plan does not suspend the effect of those conditions.

(5) The bringing of an appeal against a determination of reportable emissions or aviation emissions under article 45(5) [^F291, or the determination of maritime emissions or emissions figure for surrender under articles 45A(4) or 45B(3),^F291] suspends the effect of the decision only for the purpose of assessing whether there has been compliance with article 27 or 34 (surrender of allowances).

[^F292 (6) The bringing of an appeal against a notice under article 34U (return of allowances: notice to registry administrator) does not affect the registry administrator's power under paragraph (3)(b) of that article (power to suspend transfers from account).^F292]

Determination of appeals_I74

73.—(1) In determining an appeal under article 70, the appeal body may—

(a)affirm the decision;

(b)quash the decision or vary any of its terms;

(c)substitute a deemed refusal with a decision of the appeal body;

(d)give directions as to the exercise of the regulator's [^F293or the registry administrator's^F293] functions under this Order.

(2) The appeal body may not make a determination that would result in a decision which could not otherwise have been made under this Order.

Procedure for appeals_I75

74.—(1) Schedule 9 (which makes provision in relation to appeals to the Scottish Land Court) has effect.

(2) Schedule 10 (which makes provision in relation to appeals to the Planning Appeals Commission) has effect.

PART 9 Miscellaneous

Information notices_I76

75. —(1) The UK ETS authority, a national authority[^F294 , a regulator or the registry administrator ^F294] may, by giving a notice (an “information notice”) to a person, require the person to provide information for purposes connected with the exercise of functions under—

(a)this Order;

(b)the Monitoring and Reporting Regulation 2018;

(c)the Verification Regulation 2018.

[^F295 (d)the Free Allocation Regulation;

(e)the Activity Level Changes Regulation.^F295]

(2) The information notice must set out—

(a)the information to be provided;

(b)the form in which the information must be provided;

(c)the period within which or the time when the information must be provided;

(d)the place where the information must be provided.

(3) The information that a person may be required to provide includes information that, although it is not in the person's possession or it would not otherwise come into the person's possession, is information that it is reasonable to require the person to obtain or compile for the purpose of complying with the information notice.

[^F296National authority may require regulator, etc. to provide information

75A.—(1) The UK ETS authority or the relevant national authority may, by notice to a regulator or the registry administrator, require the regulator or registry administrator to provide any information that the UK ETS authority or relevant national authority considers necessary or expedient for the exercise of the authority's functions.

(2) The regulator or the registry administrator must comply with a notice under paragraph (1) so far as reasonably practicable.

Restriction on disclosing information

75B.—(1) This article applies to the following persons—

(a)the UK ETS authority;

(b)a national authority;

(c)a regulator;

(d)the registry administrator.

(2) A person to whom this article applies must not disclose information held or obtained under UK ETS legislation to another person.

(3) But paragraph (2) does not apply to the disclosure of information by the person in any of the following circumstances—

(a)if the disclosure is required by law;

(b)if the disclosure is necessary or expedient—

(i)for the exercise of the person's functions under UK ETS legislation;

(ii)for the purpose of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties;

(iii)in the case of a disclosure by a national authority—

(aa)for the purpose of monitoring and evaluating the effectiveness of the UK ETS;

(bb)for the purpose of preparing and publishing national energy and emissions statistics or the national inventory referred to in Article 4(1)(a) of the United Nations Framework Convention on Climate Change;

[^F297 (cc)for the purpose of relevant policy development or implementation by a national authority, a Minister of the Crown (as defined in section 8(1) of the Ministers of the Crown Act 1975), His Majesty’s Revenue and Customs or a Northern Ireland department;

(dd)for the purpose of supporting the Committee on Climate Change in performing its functions under the Climate Change Act 2008, the Climate Change (Scotland) Act 2009, the Environment (Wales) Act 2016 or the Climate Change Act (Northern Ireland) 2022.^F297]

(iv)in the case of a disclosure by the Environment Agency, for the exercise of the Environment Agency's functions under the Emissions Performance Standard Regulations 2015;

(v)in the case of a disclosure by the chief inspector, for the exercise of the chief inspector's functions under the Emissions Performance Standard Monitoring and Enforcement Regulations (Northern Ireland) 2016;

(vi)in the case of a disclosure by NRW, for the exercise of NRW's functions under the Emissions Performance Standard (Enforcement) (Wales) Regulations 2015;

(c)if the disclosure is made with the consent of the person from or on behalf of whom the information was obtained;

(d)if the disclosure is to another person to whom this article applies;

[^F298 (e)in the case of a disclosure by the UK ETS authority, if the disclosure is permitted under article 75BA (power to publish UK ETS information).^F298]

[^F299 (3A) In paragraph (3)(b)(iii)(cc), “ relevant policy development or implementation ” means the development or implementation of policies—

(a)to limit, or encourage activities that reduce or remove, greenhouse gas emissions;

(b)to counter carbon leakage;

(c)to mitigate the effects of climate change.

(3B) In paragraph (3A)(b), “ carbon leakage ” means the movement of production and associated emissions from the United Kingdom to another country due to differences in climate regulation between the United Kingdom and that other country. ^F299]

(4) In this article, “ UK ETS legislation ” means any of the following—

(a)this Order;

(b)the Monitoring and Reporting Regulation 2018;

(c)the Verification Regulation 2018;

(d)the Free Allocation Regulation;

(e)the Activity Level Changes Regulation.

[^F300Power 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). ^F300]

National security

75C.—(1) The UK ETS authority may not publish any information under article 34D (allocation tables: publication, etc.) or 34N (aviation allocation table) [^F301 , [^F302 paragraph 31 or 34 of Schedule 5A (information about accounts and transfers of allowances)^F302] or paragraph 22A of Schedule 7 (publication of emissions targets and reportable emissions)^F301] if the publication of the information would be contrary to the interests of national security.

(2) The regulator may not publish any information under article 49 (publication of names of persons subject to civil penalty under article 52) if the publication of the information would be contrary to the interests of national security.

(3) The UK ETS authority and the regulator must exercise functions under this article, and the registry administrator must exercise functions under a relevant provision, in accordance with a direction given by the Secretary of State under section 52 of CCA 2008 as to what is or is not contrary to the interests of national security.

(4) Except where the regulator is the Secretary of State, the regulator must notify the Secretary of State of any information excluded from publication under paragraph (2).

(5) The registry administrator must notify the Secretary of State of any matter excluded from a notice under a relevant provision on the grounds that its inclusion in the notice would be contrary to the interests of national security.

(6) In this article, “ relevant provision ” means any of the following provisions of Schedule 5A—

(a)paragraph 11(6) (operator holding accounts);

(b)paragraph 12(5) (transfer of operator holding accounts);

(c)paragraph 13(5) (aircraft operator holding accounts);

[^F303 (ca)paragraph 13A(5) (maritime operator holding account);^F303]

(d)paragraph 14(5) (trading accounts);

(e)paragraph 16(8) (appointment of authorised representatives);

(f)paragraph 17(5) (change in account permission of authorised representatives);

(g)paragraph 18(3) (suspension of access to registry of authorised representatives);

(h)paragraph 19(3) (removal of authorised representatives);

(i)paragraph 25(4) (suspension of accounts);

(j)paragraph 29(5) (closure of trading accounts).^F296]

Crown application_I77

76.—(1) This Order applies to the Crown.

(2) Articles 39 and 40 and Part 2 of Schedule 3 make specific provision relevant to their application to the Crown.

Transitional provisions_I78

77.—(1) Schedule 11 (which makes transitional provision for installations) has effect.

(2) An application for a GGETSR emissions plan under regulation 32A of GGETSR 2012 that has not been determined under GGETSR 2012 may be treated by the regulator as an application made under article 28.

(3) An application for the variation of a GGETSR emissions plan that has not been determined under GGETSR 2012 may be treated by the regulator as an application made under article 31.

[^F304 (4) The Monitoring and Reporting Regulation 2018 and the Verification Regulation 2018 are to be read as if references, however expressed, to a report submitted or information obtained under Commission Implementing Regulation 2018/2067 in relation to a year or other period before 2021 were to a report submitted or other information obtained under that Regulation as it had effect in EU law or under the Verification Regulation 2012.

(5) A person referred to in paragraph (6) may—

(a)use information held or obtained for the purposes of the EU ETS in the exercise of the person's functions under UK ETS legislation;

(b)disclose such information in the exercise of the person's functions under UK ETS legislation—

(i)to another person referred to in paragraph (6);

(ii)to any other person, if the disclosure is necessary or expedient for the exercise of the person's functions under UK ETS legislation.

(6) The persons are—

(a)the Secretary of State;

(b)the Environment Agency;

(c)the chief inspector;

(d)SEPA;

(e)NRW.

(7) In this article, “ UK ETS legislation ” means any of the following—

(a)this Order;

(b)the Monitoring and Reporting Regulation 2018;

(c)the Verification Regulation 2018;

(d)the Free Allocation Regulation;

(e)the Activity Level Changes Regulation.^F304]

Richard Tilbrook

Clerk of the Privy Council

Article 4(1)

case SCHEDULE 1 Aviation activity

Aviation activity_I79

1.—(1) An aviation activity consists of any of the following activities other than excluded flights—

(a)a flight departing from an aerodrome situated in the United Kingdom and arriving in an aerodrome situated—

(i)in the United Kingdom;

(ii)in an EEA State;

(iii)in Gibraltar;

(iv)on an offshore structure in the UK sector of the continental shelf or an offshore structure in the continental shelf of an EEA state;

[^F305 (v)in Switzerland;^F305]

(b)a flight arriving in an aerodrome situated in the United Kingdom from an aerodrome situated in Gibraltar.

[^F306 (c)a flight departing from an aerodrome situated in Great Britain and arriving in an aerodrome situated in Switzerland.^F306]

(2) In this paragraph a reference to a flight departing from an aerodrome situated in the United Kingdom and arriving in an aerodrome situated in an EEA state does not include a reference to a flight departing from an aerodrome situated in the United Kingdom and arriving in an aerodrome situated in an outermost region.

(3) In this paragraph, “ continental shelf of an EEA state ” means an area beyond the territorial sea of an EEA state, within which rights with respect to the seabed and subsoil and their natural resources are exercisable by that EEA state.

Excluded flights_I80

2.—(1) For the purposes of this Order, subject to sub-paragraph (2), all of the following are excluded flights—

(a)flights performed exclusively for the transport, on official mission, of a reigning Monarch and their immediate family, Heads of State, Heads of Government and Government Ministers, of a country other than the United Kingdom;

(b)military flights;

(c)customs and police flights performed by both civil registered and military aircraft;

(d)search and rescue flights;

(e)firefighting flights;

(f)humanitarian flights;

(g)emergency medical service flights;

(h)flights performed exclusively under the visual flight rules set out in Annex 2 to the Chicago Convention;

(i)flights terminating at the aerodrome from which the aircraft has taken off and during which no intermediate landing has been made;

(j)training flights performed exclusively for the purpose of obtaining a licence, or a rating in the case of cockpit flight crew, provided that the flights do not serve for the transport of passengers or cargo;

(k)flights performed exclusively for the purpose of scientific research partially or totally performed in-flight;

(l)flights performed exclusively for the purpose of checking, testing or certifying aircraft or equipment whether airborne or ground-based;

(m)flights performed by aircraft with a certified maximum take-off mass of less than 5,700 kilograms.

(2) Excluded flights referred to in sub-paragraph (1)(a), (j), (k) and (l) do not include flights for the positioning or ferrying of the aircraft.

(3) In this paragraph—

“ emergency medical service flights ” means flights for the exclusive purpose of facilitating emergency medical assistance, where immediate and rapid transportation is essential, by carrying medical personnel, medical supplies, including equipment, blood, organs, drugs, or ill and injured persons and other persons directly involved;

“ firefighting flights ” means flights performed exclusively to combat wildfires;

“Government Ministers” are the members of the government as listed in the national official journal of the country concerned, excluding members of regional or local governments of a country;

“ humanitarian flights ” means flights operated exclusively for humanitarian purposes which carry relief personnel and relief supplies such as food, clothing, shelter, medical and other items during or after an emergency or disaster, or are used to evacuate persons from a place where their life or health is threatened by such emergency or disaster to a safe haven in the same State or another State willing to receive such persons;

“immediate family” comprises exclusively the spouse, any partner considered as equivalent to the spouse, the children and the parents;

“ military flights ” means flights directly related to the conduct of military activities and performed by military aircraft;

“ official mission ” means a mission in which the person concerned is acting in an official capacity;

“ search and rescue flights ” means flights offering search and rescue services, including the performance of distress monitoring, communication, coordination and search and rescue functions, initial medical assistance or medical evacuation, through the use of public and private resources, including cooperating aircraft, vessels and other craft and installations.

Article 4(1)

SCHEDULE 2 Meaning of installation and regulated activity

Interpretation_I81

1.—(1) In this Schedule—

“ combustion unit ” means a stationary technical unit in which fuels are combusted (and includes all types of boiler, burner, turbine, heater, furnace, incinerator, calciner, kiln, oven, dryer, engine, fuel cell, chemical looping combustion unit, flare and thermal or catalytic post-combustion unit);

“ hazardous waste ” means—

(a)

^M33 in relation to an installation in Northern Ireland or UK coastal waters adjacent to Northern Ireland, hazardous waste for the purposes of regulation 6 of the Hazardous Waste Regulations (Northern Ireland) 2005 ;

(b)

^M34 in relation to an installation in Scotland or UK coastal waters adjacent to Scotland, special waste within the meaning of regulation 2 of the Special Waste Regulations 1996 ;

(c)

^M35 in relation to an installation in Wales or UK coastal waters adjacent to Wales, hazardous waste for the purposes of regulation 6 of the Hazardous Waste (Wales) Regulations 2005 ;

(d)

^M36 in any other case, hazardous waste for the purposes of regulation 6 of the Hazardous Waste (England and Wales) Regulations 2005 ;

^M37 “ municipal waste ” has the meaning given in section 21(3) of the Waste and Emissions Trading Act 2003 .

(2) For the purposes of this Schedule, a combustion unit or installation that uses only biomass as a fuel includes a combustion unit or installation that uses fossil fuels only during start-up or shut-down of operations.

Meaning of installation_I82

2. —(1) Subject to sub-paragraph (2), in this Order, “ installation ” means a stationary technical unit or units where one or more regulated activities are carried out.

(2) “ Installation ” does not include any of the following (which are outside the scope of the UK ETS)—

(a)an installation that uses only biomass as a fuel;

(b)an installation, or part of an installation, the primary purpose of which is research and development (including the testing of new products and processes);

(c)an installation, the primary purpose of which is the incineration of hazardous or municipal waste;

(d)a relevant Northern Ireland electricity generator.

(3) In sub-paragraph (2), a reference to an installation is a reference to what would be an installation, but for that sub-paragraph.

(4) References in this Order to an installation include references to part of an installation.

Meaning of regulated activity, etc.

3. —(1) In this Order, “ regulated activity ” means [^F307 any of the following ^F307] —

(a)^F308an activity set out in an entry in column 1 of table C that results in emissions of the gases set out in the corresponding entry in column 2; ...

(b)where such an activity is carried out on a site, the combustion of fuels in any combustion unit (including a combustion unit referred to in sub-paragraph (5)(a) or (b)) operated on the site that results in emissions of such gases, except for a combustion unit to which sub-paragraph (2) applies.

[^F309 (c)where the activity set out in column 1 of the first row of table C (combustion of fuels, etc.) is carried out on an upstream site, upstream GHG removal on or after the relevant date in any stationary technical unit on the site that results in emissions of carbon dioxide.^F309]

(2) This sub-paragraph applies to a combustion unit if—

(a)the primary purpose of the unit is the incineration of hazardous or municipal waste; and

(b)the unit does not exclusively serve the stationary technical unit or units where the activity referred to in sub-paragraph (1)(a) is carried out.

(3) But sub-paragraph (2) does not apply to a combustion unit that is a flare.

Table C_I83

Column 1	Column 2
Activities	Greenhouse gases
Combustion of fuels on a site where combustion units with a total rated thermal input exceeding 20 megawatts are operated	Carbon dioxide
Refining of mineral oil	Carbon dioxide
Production of coke	Carbon dioxide
Metal ore (including sulphide ore) roasting or sintering, including palletisation	Carbon dioxide
Production of pig iron or steel (primary or secondary fusion) including continuous casting, with a capacity exceeding 2.5 tonnes per hour	Carbon dioxide
Production or processing of ferrous metals (including ferro-alloys) on a site where combustion units with a total rated thermal input exceeding 20 megawatts are operated (and “processing” includes processing in rolling mills, re-heaters, annealing furnaces, smitheries, foundries, coating and pickling)	Carbon dioxide
Production of primary aluminium	Carbon dioxide
Production of primary aluminium	Perfluorocarbons
Production of secondary aluminium on a site where combustion units with a total rated thermal input exceeding 20 megawatts are operated	Carbon dioxide
Production or processing of non-ferrous metals (including production of alloys, refining and foundry casting) on a site where combustion units with a total rated thermal input (including fuels used as reducing agents) exceeding 20 megawatts are operated	Carbon dioxide
Production of cement clinker in rotary kilns with a production capacity exceeding 500 tonnes per day or in other furnaces with a production capacity exceeding 50 tonnes per day	Carbon dioxide
Production of lime or calcination of dolomite or magnesite in rotary kilns or in other furnaces with a production capacity exceeding 50 tonnes per day	Carbon dioxide
Manufacture of glass including glass fibre with a melting capacity exceeding 20 tonnes per day	Carbon dioxide
Manufacture of ceramic products by firing, in particular roofing tiles, bricks, refractory bricks, tiles, stoneware or porcelain, with a production capacity exceeding 75 tonnes per day	Carbon dioxide
Manufacture of mineral wool insulation material using glass, rock or slag with a melting capacity exceeding 20 tonnes per day	Carbon dioxide
Drying or calcination of gypsum or production of plaster boards and other gypsum products on a site where combustion units with a total rated thermal input exceeding 20 megawatts are operated	Carbon dioxide
Production of pulp from timber or other fibrous materials	Carbon dioxide
Production of paper or cardboard with a production capacity exceeding 20 tonnes per day	Carbon dioxide
Production of carbon black involving the carbonisation of organic substances such as oils, tars, cracker and distillation residues on a site where combustion units with a total rated thermal input exceeding 20 megawatts are operated	Carbon dioxide
Production of nitric acid	Carbon dioxide
Production of nitric acid	Nitrous oxide
Production of adipic acid	Carbon dioxide
Production of adipic acid	Nitrous oxide
Production of glyoxal and glyoxylic acid	Carbon dioxide
Production of glyoxal and glyoxylic acid	Nitrous oxide
Production of ammonia	Carbon dioxide
Production of bulk organic chemicals by cracking, reforming, partial or full oxidation or by similar processes, with a production capacity exceeding 100 tonnes per day	Carbon dioxide
Production of hydrogen (H₂) and synthesis gas by reforming or partial oxidation with a production capacity exceeding 25 tonnes per day	Carbon dioxide
Production of soda ash (Na₂CO₃) and sodium bicarbonate (NaHCO₃)	Carbon dioxide
Capture of greenhouse gases from [^F310a regulated activity^F310] for the purpose of transport and geological storage in a storage site	Carbon dioxide
Transport of greenhouse gases by pipelines for geological storage in a storage site	Carbon dioxide
Geological storage of greenhouse gases in a storage site	Carbon dioxide

(4) For the purpose of calculating the production or other capacity set out in an entry in column 1 of table C, where more than one activity referred to in the entry is carried out on a site, the capacities of all such activities must be added together.

(5) For the purpose of calculating the total rated thermal input of combustion units operated on a site, the rated thermal input of all combustion units on the site must be added together, except for—

(a)combustion units with a rated thermal input below 3 megawatts;

(b)combustion units that use only biomass as a fuel.

(6) Where the carrying out of an activity referred to in paragraph (a) of sub-paragraph (1) (that is to say, an activity set out in an entry in column 1 of table C) falls within both—

(a)an entry that does not refer to a threshold expressed as total rated thermal input; and

(b)an entry that refers to such a threshold,

for the purpose of this Order, the reference to the activity in that paragraph must be treated as a reference to the activity falling within the entry referred to in paragraph (a) of this sub-paragraph.

[^F311 (6A) In this paragraph—

“ relevant date ” means 1st January 2025 or, if the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024 is made on or after 16th November 2024, the first day of the fourth month after the month in which that Order is made;

“ upstream GHG removal ” means the removal of constituent greenhouse gases from petroleum (whether by a chemical or physical process);

“ upstream site ” means the site of—

(a)

a project carried out by virtue of a licence granted under section 2 of the Petroleum (Production) Act 1934, section 3 of the Petroleum Act 1998 or section 2 of the Petroleum (Production) Act (Northern Ireland) 1964;

(b)

a facility (other than a liquefied natural gas import or export facility or a facility operated by a gas transporter) where constituent greenhouse gases are removed from petroleum for the purpose of enabling it to be introduced into a pipeline system operated by a gas transporter or to be conveyed to an electricity generating station, a gas storage facility, a liquefied natural gas import or export facility or any place outside the United Kingdom.

(6B) In sub-paragraph (6A)—

“ gas storage facility ” means a gas storage facility as defined in section 12(6) of the Gas Act 1995 or a gas storage facility as defined in Article 3(1) of the Gas (Northern Ireland) Order 1996 ;

“ gas transporter ” means a gas transporter as defined in section 7(1) of the Gas Act 1986 or the holder of a licence under Article 8(1)(a) of the Gas (Northern Ireland) Order 1996 ;

“ liquefied natural gas import or export facility ” means an LNG import or export facility as defined in section 12(6) of the Gas Act 1995 or an LNG facility as defined in Article 3(1) of the Gas (Northern Ireland) Order 1996 ;

“ petroleum ” has the same meaning as in Part 1 of the Petroleum Act 1998 and includes petroleum that has undergone any processing. ^F311]

(7) In this Order, “ specified emissions ” means, in relation to a regulated activity referred to in sub-paragraph (1), the emissions of the gases referred to in that sub-paragraph.

Article 34ZA

[^F312SCHEDULE 2A MARITIME

PART 1 PRELIMINARY

Introductory

1. The UK ETS applies to maritime activities as set out in this Schedule.

Interpretation

2.—(1) In this Schedule—

“annual emissions report” is to be interpreted in accordance with paragraph 14(1);

“ BDN ” means bunker delivery note;

“ control activities ” means any acts carried out or measures implemented by the maritime operator to mitigate inherent risks;

“ control risk ” means the susceptibility of a parameter in the annual emissions report to misstatements that could be material, individually or when taken together with other misstatements, and will not be prevented or detected and corrected on a timely basis by the control system;

“ control system ” means the maritime operator’s risk assessment and entire set of control activities, including its continuous management, that a maritime operator has established, documented, implemented and maintained in line with Part 5 and its emissions monitoring plan;

“ emission factor ” means the average emission rate of a greenhouse gas relative to the activity data of a source stream, assuming complete oxidation for combustion and complete conversion for all other chemical reactions;

“ greenhouse gas ” means carbon dioxide (CO ₂ ), nitrous oxide (N ₂ O) or methane (CH ₄ );

“in-port activity” is to be interpreted in accordance with paragraph 7(3);

“ ISM Code ” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by the International Maritime Organization by Assembly Resolution A.741(18) (as amended);

“ ISM company ” means—

(a)

where a person who is not the registered owner of a ship has assumed responsibility for the operation of the ship and has agreed with the registered owner to take over all the duties and responsibilities imposed by the ISM Code, that person; or

(b)

in all other cases, the registered owner of the ship;

“ offshore installation ” means a structure, floating or fixed, used to support offshore industrial activities including those related to exploration and exploitation of resources by the renewable or hydrocarbon energy sector, aquaculture, ocean mining or similar activities;

“ offshore ship ” means the following ships certified to perform activities offshore or at offshore installations—

(a)

accommodation ship;

(b)

anchor handling tug supply ship;

(c)

cable layer;

(d)

cable repair ship;

(e)

commissioning service operation vessel;

(f)

crew or supply vessel;

(g)

diving support vessel;

(h)

dredger;

(i)

drilling ship;

(j)

floating production storage and offloading of oil;

(k)

floating storage and offloading of gas;

(l)

floating storage and offloading of oil;

(m)

gas processing vessel;

(n)

hopper dredger;

(o)

mining vessel;

(p)

offshore construction vessel;

(q)

offshore supply ship;

(r)

offshore support vessel;

(s)

pipe burying vessel;

(t)

pipe carrier;

(u)

pipe layer;

(v)

pipe layer crane vessel;

(w)

platform supply ship;

(x)

production testing vessel;

(y)

research survey vessel;

(z)

service operation vessel;

(aa)

standby safety vessel;

(ab)

trenching support vessel;

(ac)

well stimulation vessel;

(ad)

wind turbine installation vessel;

(ae)

work or repair vessel;

“port of call” is to be interpreted in accordance with paragraph 6;

“ registered owner ” means in relation to a ship the person named as the owner on the certificate of registry issued by the authority responsible for the registration of ships in the country of primary registration;

“ship” is to be interpreted in accordance with paragraph 5(2);

“ uncertainty ” means a parameter, associated with the result of the determination of a quantity, that characterises the dispersion of the values that could reasonably be attributed to the particular quantity, including the effects of systematic as well as of random factors, expressed as a percentage, and describes a confidence interval around the mean value comprising 95 % of inferred values taking into account any asymmetry of the distribution of values;

“ verification ” means the activities carried out by a verifier to issue a verification report pursuant to Part 8;

“ verifier ” means a legal person—

(a)

carrying out verification activities pursuant to Part 8; and

(b)

accredited by the national accreditation body pursuant to Part 8 at the time a verification report is issued.

“voyage” is to be interpreted in accordance with paragraph 7(2).

PART 2 KEY CONCEPTS AND OBLIGATIONS

Meaning of “maritime operator”

3.—(1) In this Order, a person is a maritime operator in relation to a scheme year, where in respect of that year that person—

(a)performs a maritime activity in a ship; and

(b)in respect of that ship is—

(i)unless sub-paragraph (2) applies, its registered owner; or

(ii)where sub-paragraph (2) applies, its ISM company.

(2) This sub-paragraph applies if—

(a)the registered owner of that ship is not its ISM company;

(b)that ship’s ISM company has agreed in writing with the registered owner of the ship that the ISM company is responsible for complying with the obligations that would otherwise be imposed by or under this Order on the registered owner of the ship as its maritime operator if this sub-paragraph did not apply to the ship;

(c)evidence of that agreement has been provided to the satisfaction of the regulator; and

(d)no notice has been given under paragraph 4(1) which relates to a change in the written agreement to the effect that that ISM company is no longer responsible for complying with the obligations imposed by or under this Order.

(3) Where the person that performed a maritime activity is not known, the registered owner will be deemed to have performed that maritime activity.

Notification of change of responsibility

4.—(1) An ISM company that has assumed responsibility for obligations imposed by or under this Order in accordance with paragraph 3(2)(b), must notify the regulator in writing where there is a change to its written agreement with the registered owner of a ship that affects its responsibility for compliance with those obligations.

(2) A notification under sub-paragraph (1) must be made within 14 days of the change to the written agreement taking effect.

Ships to which this Schedule applies

5.—(1) This Schedule applies to a ship of a gross tonnage of 5000 or more calculated in accordance with the tonnage determination regulations contained in Annex I to the International Convention on Tonnage Measurement of Ships, adopted by the International Maritime Organization (IMO) in London on 23rd June 1969, except—

(a)a ship in the armed services of the United Kingdom or another country (including a naval auxiliary ship);

(b)a ship, the principal use of which is for law enforcement (for example for border enforcement purposes or for customs purposes);

(c)a ship, the principal use of which is for government surveillance and protection of the marine environment;

(d)a ship, the principal use of which is for assisting marine navigation or safe passage;

(e)a ship, the principal use of which is for fish-catching and fish processing;

(f)a ship, the principal use of which is to carry out, or facilitate the carrying out of, publicly funded research;

(g)a ship, the principal use of which is to undertake coastguard or search and rescue activities;

(h)a ship, the principal use of which is responding to medical emergencies;

(i)a ship exclusively propelled by non-mechanical means;

(j)a wooden ship of a primitive build;

(k)a ship that operates a Scottish ferry service;

(l)up to and including 31st December 2026, an offshore ship.

(2) In this Order, “ ship ” means, except in sub-paragraph (1), a ship to which this Order applies by virtue of that sub-paragraph.

(3) In this paragraph, “ Scottish ferry service ” means a transport service by water that—

(a)ordinarily carries passengers;

(b)operates between two or more points in Scotland where the route for the transport service crosses through (in whole or in part) the Scottish marine region for—

(i)the Solway;

(ii)the Clyde;

(iii)Argyll;

(iv)the West Highlands;

(v)the Outer Hebrides

(vi)the North Coast;

(vii)the Orkney Islands;

(viii)the Shetland Isles;

(ix)the Moray Firth; and

(c)operates either—

(i)according to a published timetable; or

(ii)with crossings so regular or frequent that they constitute a recognisable systematic series.

(4) Sub-paragraph (3)(b)(i) to (ix) is to be interpreted in accordance with the Scottish Marine Regions Order 2015.

Meaning of “port of call”

6. —(1) In this Schedule, except where sub-paragraph (2) applies, the expression “ port of call ” means any port that a ship arrives or is present at and at which—

(a)passengers or crew embark, or disembark, that ship; or

(b)cargo is loaded onto, or unloaded from, that ship.

(2) This sub-paragraph applies where a ship arrives or is present at a port and—

(a)arrival or presence at the port is exclusively for the purpose of—

(i)refuelling the ship;

(ii)obtaining supplies in connection with the operation of the ship;

(iii)relieving the ship’s crew, other than relieving of crew of an offshore ship;

(iv)going into dry dock;

(v)obtaining repairs to the ship or its equipment;

(vi)sheltering from adverse weather conditions;

(vii)obtaining assistance where the ship is in distress; or

(b)arrival or presence at the port is rendered necessary as a result of—

(i)a medical emergency;

(ii)search and rescue activities;

(iii)the provision of assistance to a ship in distress.

(3) In this paragraph, a port includes an offshore installation that has an assigned United Nations Code for Trade and Transport Locations (UN/LOCODE) at the date this Order is made.

Meaning of “maritime activity”

7. —(1) In this Order, a “maritime activity” consists of the following—

(a)a voyage, as defined in sub-paragraph (2);

(b)an in-port activity, as defined in sub-paragraph (3).

(2) A “ voyage ” means any movement of a ship that—

(a)commences at the last berth at a port of call within the United Kingdom’s jurisdiction;

(b)ends at the first berth at that port of call or another port of call within the United Kingdom’s jurisdiction;

(c)does not arrive at a port of call outside the United Kingdom’s jurisdiction; and

(d)is not an excluded activity.

(3) An “in-port activity” consists of the following but does not include an excluded activity—

(a)movements of a ship within a port of call within the United Kingdom’s jurisdiction that do not form part of a voyage; and

(b)a ship being at berth at a port of call within the United Kingdom’s jurisdiction.

(4) In this paragraph—

“ at berth ” means, in relation to a ship, being securely moored or anchored in a port while that ship is loading, unloading or hotelling, including the time spent when not engaged in cargo operations;

“ excluded activity ” means a voyage or an in-port activity that is excluded pursuant to paragraph 8.

Excluded activities

8.—(1) For the purposes of this Order, an activity is excluded if performed for the exclusive purpose of—

(a)the transport, on official mission, of—

(i)a reigning monarch and their immediate family, or head of state, of a country other than the United Kingdom;

(ii)a minister of a national government of a country other than the United Kingdom;

(b)military activities;

(c)search and rescue;

(d)firefighting;

(e)providing humanitarian aid or assistance;

(f)carrying out a government function not otherwise falling within the activities listed above.

(2) In this paragraph—

“ humanitarian aid or assistance ” means activities performed for humanitarian purposes which transport relief personnel and relief supplies such as food, clothing, shelter, medical and other items during or after an emergency or disaster, or are used to evacuate persons from a place where their life or health is threatened by such emergency or disaster to a safe haven;

“ immediate family ” means, in relation to a person, their spouse or their partner where equivalent to a spouse, their children and parents;

“ search and rescue ” includes the performance of distress monitoring, communication, coordination and search and rescue functions, initial medical assistance or medical evacuation, through the use of public and private resources, including cooperating aircraft, ships and other craft and installations.

Applications for emissions monitoring plans

9. —(1) A maritime operator must, and any other person may, apply to the regulator for a plan setting out how the applicant’s maritime emissions are to be monitored for the purposes of this Order (“an emissions monitoring plan”).

(2) A maritime operator must comply with the requirement in sub-paragraph (1) before the end of the period of 42 days commencing with the day it performs its first maritime activity.

(3) An application under sub-paragraph (1) must include the information required for inclusion in the emissions monitoring plan in accordance with Parts 3 to 5.

Issue of emissions monitoring plans

10.—(1) If a maritime operator or other person applies for an emissions monitoring plan in accordance with paragraph 9, the regulator must issue the emissions monitoring plan unless—

(a)the regulator is not satisfied that the application includes the information required for inclusion in the emissions monitoring plan in accordance with Parts 3 to 5; and

(b)the applicant has not agreed to amendments of the application required to satisfy the regulator that the application does so comply.

(2) The regulator may include any condition that the regulator considers necessary to give proper effect to this Order.

Refusal of application for emissions monitoring plans

11.—(1) If the regulator refuses an application for an emissions monitoring plan the regulator must give notice to the applicant.

(2) A notice under sub-paragraph (1) must state—

(a)the reasons for the decision; and

(b)if amendments of the application are required in order for an emissions monitoring plan to be issued, the nature of those amendments.

(3) A maritime operator who is given a notice under sub-paragraph (1) must make a revised application to the regulator before the end of the period of 31 days beginning with the day that the notice was given.

(4) Paragraph 10 and this paragraph apply to a revised application to which sub-paragraph (5) applies as they apply to the original application, but for the purposes of such a revised application, the references to the period of 2 months in paragraph 2 of Schedule 3 are to be read as references to a period of 24 days.

(5) This paragraph applies to—

(a)a revised application under sub-paragraph (3);

(b)where the regulator refuses an application for an emissions monitoring plan by a person who is not a maritime operator, a revised application made by the person before the end of the period of 31 days beginning with the day on which the notice under sub-paragraph (1) is given.

Variation of emissions monitoring plans

12.—(1) A maritime operator—

(a)may apply to the regulator to vary its emissions monitoring plan;

(b)must apply to the regulator to vary its emissions monitoring plan where required to do so by a condition of the emissions monitoring plan.

(2) A variation applied for under sub-paragraph (1) is given effect by the regulator giving notice to the maritime operator.

(3) Sub-paragraphs (1) and (2) do not affect the operation of any condition of an emissions monitoring plan that allows a maritime operator to make a variation without applying to the regulator.

(4) The regulator may, by giving notice to a maritime operator, make any variation of the maritime operator’s emissions monitoring plan that the regulator considers necessary in consequence of a report made by the maritime operator under paragraph 26.

(5) The regulator may, by giving notice to a maritime operator, vary the maritime operator’s emissions monitoring plan where the maritime operator has failed to comply with a requirement in the emissions monitoring plan to make or apply for such a variation.

(6) The regulator may, by giving notice to a maritime operator, vary the maritime operator’s emissions monitoring plan by modifying, adding or removing a condition if the regulator considers it necessary to do so to give proper effect to this Order.

(7) In this paragraph references to a maritime operator include any person who has been issued with an emissions monitoring plan.

Monitoring of emissions and emissions monitoring plan condition

13.—(1) Each maritime operator must monitor its maritime emissions in accordance with—

(a)the requirements of Part 4;

(b)the emissions monitoring plan issued to the person under paragraph 10.

(2) Each maritime operator must comply with any condition included in its emissions monitoring plan under paragraph 10(2) or 12(6).

Reporting of emissions

14. —(1) A person who is a maritime operator in relation to a scheme year must prepare a report of its maritime emissions for that scheme year (an “annual emissions report”) in accordance with—

(a)the requirements of Part 7;

(b)the emissions monitoring plan issued to the person under paragraph 10.

(2) The annual emissions report must be verified as satisfactory in accordance with the requirements of Part 8.

(3) The annual emissions report and the verification report must be submitted to the regulator by the maritime operator on or before 31st March in the year following the scheme year to which it relates.

(4) Where a voyage commences in one scheme year but ends in another scheme year, the respective emissions must be accounted for under the scheme year in which they occurred.

Surrender of allowances by maritime operators

15.—(1) A person who is a maritime operator in relation to a scheme year must surrender an amount of allowances equal to—

(a)50% of its maritime emissions arising in that scheme year (expressed in tonnes of carbon dioxide equivalent) from voyages—

(i)starting at a port of call in Northern Ireland and ending at a port of call in Great Britain;

(ii)starting at a port of call in Great Britain and ending at a port of call in Northern Ireland;

(b)100% of maritime emissions arising in that scheme year (expressed in tonnes of carbon dioxide equivalent) from any other maritime activity.

(2) The obligation to surrender referred to in sub-paragraph (1) must be satisfied—

(a)on or before 30th April 2028 in relation to maritime emissions in the 2026 scheme year;

(b)in relation to maritime emissions in any other scheme year, on or before 30th April in the following year.

Maritime monitoring and reporting principles

16. A maritime operator must carry out their obligations relating to monitoring and reporting of maritime emissions under this Order in accordance with the following principles—

(a)a maritime operator must determine emissions using the appropriate monitoring methodology set out in Part 4;

(b)monitoring and reporting must be complete and cover all maritime emissions;

(c)a maritime operator must apply appropriate measures to prevent any data gaps within the scheme year;

(d)monitoring and reporting must be consistent and comparable over time and, to that end, a maritime operator must use the same monitoring methodologies and data sets subject to variations approved by the regulator;

(e)a maritime operator must obtain, record, compile, analyse and document monitoring data, including assumptions, references, emission factors and activity data, in a transparent manner that enables the reproduction of the determination of maritime emissions by the verifier and the regulator;

(f)a maritime operator must ensure that the determination of maritime emissions is neither systematically nor knowingly inaccurate, and must identify and reduce any source of inaccuracies;

(g)a maritime operator must enable reasonable assurance of the integrity of the maritime emission data to be monitored and reported;

(h)a maritime operator must exercise due diligence to ensure that the calculation and measurement of maritime emissions are of the highest achievable accuracy;

(i)a maritime operator must endeavour to take account of the recommendations included in the verification reports issued under paragraph 59 in their subsequent monitoring and reporting.

PART 3 CONTENTS OF THE EMISSIONS MONITORING PLAN

17.—(1) An emissions monitoring plan must contain the following information—

(a) the name of the emissions monitoring plan holder;

(b) details of a contact person;

(d) a description of the procedures used to monitor voyages and in-port activities;

(e) a description of the procedures for monitoring fuel consumption, including—

(i) the procedures for the measurement of fuel uplifts and fuel in tanks;

(ii) the procedures for recording, retrieving, transmitting and storing information regarding measurements, as applicable;

(iii) a procedure to ensure that the total uncertainty of fuel measurements is consistent with the requirements of this Schedule;

(iv) details of the procedures, systems and responsibilities used to determine and update emission factors;

(v) a description of the method to be used to determine surrogate data for closing data gaps;

(vi) a procedure for the collection and recording of information required to support an emissions reduction claim including details of fuel type, purchase, delivery, sustainability criteria and avoidance of double counting;

(f) in respect of each ship in which the emissions monitoring plan holder is performing or intends to perform maritime activities—

(i) the name of the ship;

(ii) the IMO ship identification number;

(iii) the type of ship;

(iv) the flag state;

(v) the gross tonnage;

(vi) where the emissions monitoring plan holder is the bareboat charterer of the ship, the state of registration of that bareboat charter;

(vii) a description of the emission sources on board the ship including any main engines, auxiliary engines, gas turbines, boilers and inert gas generators, and the fuel types used;

(viii) which of the monitoring methods A, B, C or D referred to in paragraph 21 is to be used (or which combination of those methods where more than one is used);

(ix) where applicable, the method chosen for the determination of density of fuel used;

(x) a description of the measuring equipment used;

(xi) single emission factors used for each fuel type;

(xii) details of any procedure for the ship that differ from the generic procedures the emissions monitoring plan holder set out in paragraphs (d) and (e);

(g) a description of the procedures, systems and responsibilities used to manage and update the list of ships and emission sources on them.

(2) An emissions monitoring plan holder must check regularly, and at least annually, whether their emissions monitoring plan reflects the nature and functioning of their operations and whether the monitoring methodology can be improved.

PART 4 MONITORING ARRANGEMENTS

Monitoring on a per-voyage basis

18. Except where paragraph 19 applies, a maritime operator must monitor the following for each voyage—

(a)port of departure;

(b)date and hour of departure;

(c)port of arrival;

(d)date and hour of arrival;

(e)total amount of each type of fuel consumed;

(f)emission factor for each type of fuel consumed;

(g)amount of each greenhouse gas emitted.

Simplified monitoring for voyages

19.—(1) Where this paragraph applies in respect of a ship, a maritime operator is not required to monitor on a per-voyage basis for that ship, and instead may monitor the following for the scheme year—

(a)the number of voyages;

(b)total amount of each type of fuel consumed;

(c)emission factor for each type of fuel consumed;

(d)amount of each greenhouse gas emitted.

(2) This paragraph applies where, in a scheme year, that ship—

(a)is scheduled to perform more than 300 voyages while under the responsibility of the maritime operator; and

(b)does not perform any journey that is not a voyage for the purpose of this Schedule.

Monitoring in-port activities

20. A maritime operator must monitor the following relating to its in-port activities—

(a)total amount of each type of fuel consumed;

(b)emission factor for each type of fuel consumed;

(c)amount of each greenhouse gas emitted.

Monitoring methods for maritime emissions

21.—(1) The maritime operator must indicate in the emissions monitoring plan which monitoring method is to be used to determine the maritime emissions for each ship under its responsibility and ensure that once a method has been chosen, it is consistently applied.

(2) The methods A, B, C and D described in paragraphs 22 to 25, based on the calculation approach or the measurement approach, can be used.

(3) Under the calculation approach (methods A, B and C), maritime emissions must be calculated using the formulae set out in Part 6. For that purpose, the actual fuel consumption for each voyage must be determined using any of methods A, B or C described in paragraphs 22 to 24 and used for the purpose of the calculation.

(4) Sources of uncertainty and associated levels of uncertainty must be considered when selecting any of methods A, B or C. The maritime operator must regularly perform suitable control activities, including cross-checks between the bunkering quantity as provided by the BDN and the bunkering quantity indicated by on-board measurement, and take corrective action if a notable deviation is observed.

(5) Under the measurement approach (method D), direct maritime emissions measurements are used.

(6) Any combination of methods A, B, C and D, once approved by the regulator, may be used if it enhances the overall accuracy of the measurement.

(7) Where the term ‘relevant’ is used in relation to fuels or emission sources in paragraphs 22 to 25, this means the fuel or emission source for which the method has been selected.

Method A: BDN and periodic stocktakes of fuel tanks

22.—(1) In this Schedule, a reference to method A is to be construed in accordance with this paragraph.

(2) This method is based on the quantity and type of fuel as indicated on the BDN combined with periodic stocktakes of fuel tanks based on tank readings. The fuel at the beginning of the period, plus deliveries, minus fuel available at the end of the period and de-bunkered fuel between the beginning of the period and the end of the period together constitute the fuel consumed over the period.

(3) The period means the time between two port calls or time within a port. For the fuel used during a period, the fuel type and the sulphur content need to be specified.

(4) This method must not be used when BDN are not available on board ships, especially when cargo is used as a fuel, for example, liquefied natural gas (LNG) boil-off.

(5) The periodic stocktake of fuel tanks on board is based on fuel tank readings. It uses tank tables relevant to each fuel tank to determine the volume at the time of the fuel tank reading. The uncertainty associated with the BDN must be specified in the emissions monitoring plan. Fuel tank readings must be carried out by appropriate methods such as automated systems, soundings and dip tapes. The method for tank sounding and uncertainty associated must be specified in the emissions monitoring plan.

(6) Where the amount of fuel uplift or the amount of fuel remaining in the tanks is determined in units of volume, expressed in cubic meters, the maritime operator must convert that amount from volume to mass by using actual density values.

(7) For the purpose of sub-paragraph (6), the maritime operator must determine the actual density by using one of the following—

(a)on-board measurement systems;

(b)the density measured by the fuel supplier at fuel uplift and recorded on the fuel invoice or BDN;

(c)the density measured in a test analysis conducted in a fuel test laboratory, accredited in accordance with EN ISO/IEC 17025 as updated from time to time, where available.

(8) The actual density must be expressed in kg/cubic meter and determined for the applicable temperature for a specific measurement. In cases for which actual density values are not available, a standard density factor for the relevant fuel type must be applied.

Method B: Bunker fuel tank monitoring on board

23.—(1) In this Schedule, a reference to method B is to be construed in accordance with this paragraph.

(2) This method is based on fuel tank readings for all fuel tanks on board. The tank readings must occur daily when the ship is at sea and each time the ship is bunkering or de-bunkering.

(3) The cumulative variations of the fuel tank level between two readings constitute the fuel consumed over the period.

(4) The period means the time between two port calls or time within a port. For the fuel used during a period, the fuel type and the sulphur content need to be specified.

(5) Fuel tank readings must be carried out by appropriate methods such as automated systems, soundings and dip tapes. The method for tank sounding and uncertainty associated must be specified in the emissions monitoring plan.

(7) For the purpose of sub-paragraph (6), the maritime operator must determine the actual density by using one of the following—

(a)on-board measurement systems;

(b)the density measured by the fuel supplier at fuel uplift and recorded on the fuel invoice or BDN;

(c)the density measured in a test analysis conducted in a fuel test laboratory, accredited in accordance with EN ISO/IEC 17025 as updated from time to time, where available.

Method C: Flow meters for applicable combustion processes

24.—(1) In this Schedule, a reference to method C is to be construed in accordance with this paragraph.

(2) This method is based on measured fuel flows on board. The data from all flow meters linked to relevant maritime emission sources must be combined to determine all fuel consumption for a specific period.

(3) The period means the time between two port calls or time within a port. For the fuel used during a period, the fuel type and the sulphur content need to be monitored.

(4) The calibration methods applied and the uncertainty associated with flow meters used must be specified in the emissions monitoring plan.

(5) Where the amount of fuel consumed is determined in units of volume, expressed in cubic meters, the maritime operator must convert that amount from volume to mass by using actual density values.

(6) For the purpose of sub-paragraph (5), the maritime operator must determine the actual density by using one of the following—

(a)on-board measurement systems;

(b)the density measured by the fuel supplier at fuel uplift and recorded on the fuel invoice or BDN;

(c)the density measured in a test analysis conducted in a fuel test laboratory, accredited in accordance with EN ISO/IEC 17025 as updated from time to time, where available.

(7) The actual density must be expressed in kg/cubic meter and determined for the applicable temperature for a specific measurement. In cases for which actual density values are not available, a standard density factor for the relevant fuel type must be applied.

Method D: Direct maritime emissions measurement

25.—(1) In this Schedule, a reference to method D is to be construed in accordance with this paragraph.

(2) The direct maritime emissions measurements may be used for voyages and in-port activities. For ships for which CO₂ reporting is based on this method applied to all emission sources on board the ship, the fuel consumption must be calculated using the measured CO₂ emissions and the applicable emission factors of the relevant fuels and emission sources.

(3) This method is based on the determination of maritime emissions flows in exhaust gas stacks (funnels) by multiplying the greenhouse gas concentrations of the exhaust gas with the exhaust gas flow.

(4) The application of this method to determine emissions of one greenhouse gas does not prevent a maritime operator from applying any other monitoring method described in paragraphs 22 to 24 to monitor any other greenhouse gas.

(5) The calibration methods applied and the uncertainty associated with the devices used must be specified in the emissions monitoring plan.

Reporting on improvement to the monitoring methodology

26. —(1) Where the verification report states outstanding non-conformities or recommendations for improvements, in accordance with paragraph 59, the maritime operator must submit to the regulator for approval a report by 30th June of the year in which that verification report is issued by the verifier (the “improvement report”).

(2) Except where sub-paragraphs (4) or (5) apply, that improvement report must describe how and when the maritime operator has rectified or plans to rectify the non-conformities identified by the verifier and to implement recommended improvements.

(3) The regulator may set an alternative date for submission of the improvement report, but no later date than 30th September of the same year.

(4) Where recommended improvements would not lead to an improvement of the monitoring methodology, the maritime operator must provide a justification of why that is the case.

(5) Where the recommended improvements would incur unreasonable costs, the maritime operator must provide evidence of the unreasonable nature of the costs.

(6) Sub-paragraphs (1) to (5) do not apply where the maritime operator has already resolved all non-conformities and recommendations for improvement and has submitted an application to vary its emissions monitoring plan to the regulator in accordance with paragraph 12 before the date set pursuant to sub-paragraph (1).

PART 5 DATA MANAGEMENT AND CONTROL

Control system

27.—(1) The maritime operator must—

(a)carry out a risk assessment to identify sources of risks of errors in the data flow from primary data to final data in the annual emissions report;

(b)establish, document, implement and maintain an effective control system to ensure that any reports resulting from data flow activities—

(i)do not contain misstatements;

(ii)are in conformity with the emissions monitoring plan;

(iii)comply with this Schedule;

(c)make the risk assessment referred to in paragraph (a) available—

(i)to the regulator upon request;

(ii)for the purposes of verification.

(2) For the purposes of sub-paragraph (1), the maritime operator must—

(a)establish, document, implement and maintain written procedures, separately from the emissions monitoring plan, for data flow activities as well as for control activities;

(b)include references to and a description of those procedures in the emissions monitoring plan;

(c)make any written documentation of the procedures available—

(i)to the regulator upon request;

(ii)for the purposes of verification.

(3) Control activities referred to in sub-paragraph (2) include, where applicable—

(a)quality assurance of the relevant measurement equipment;

(b)quality assurance of information technology systems ensuring that the relevant systems are designed, documented, tested, implemented, controlled and maintained in a way that ensures processing reliable, accurate and timely data in accordance with the risks identified in accordance with sub-paragraph (1);

(c)segregation of duties in the data flow activities and control activities, as well as management of necessary competencies;

(d)internal reviews and validation of data;

(e)corrections and corrective action;

(f)control of out-sourced processes;

(g)keeping records and documentation including the management of document versions.

Quality assurance of relevant measurement equipment

28.—(1) For the purposes of paragraph 27(3)(a) the maritime operator must ensure that all relevant measuring equipment is—

(a)calibrated, adjusted and checked at regular intervals including prior to use;

(b)checked against measurement standards traceable to international measurement standards, where available, and proportionate to the risks identified.

(2) Where components of the measuring systems cannot be calibrated, the maritime operator must—

(a)identify those components in the emissions monitoring plan;

(b)propose alternative control activities.

(3) When the equipment is found not to comply with the performance requirements, the maritime operator must promptly take necessary corrective action.

Internal reviews and validation of data

29. For the purposes of paragraph 27(3)(d), the maritime operator must review and validate data resulting from the data flow activities referred to in paragraph 27(2) and must include the following—

(a)a check as to whether the data are complete;

(b)a comparison of the data that the maritime operator has obtained, monitored and reported over several years;

(c)a comparison of data and values resulting from different monitoring methods when more than one monitoring method is applied.

Corrections and corrective action

30. For the purposes of paragraph 27(3)(e), the maritime operator must ensure that corrective action is taken and affected data is corrected without undue delay where data flow activities or control activities are found not to function effectively, or not to respect the rules set in the documentation of procedures for those activities.

Control of out-sourced processes

31. For the purposes of paragraph 27(3)(f), where the maritime operator outsources one or more data flow activities or control activities referred to in paragraph 27(1), it must—

(a)check the quality of the outsourced data flow activities and control activities in accordance with this Schedule;

(b)indicate appropriate requirements for the outputs of the outsourced processes as well as the methods used in those processes;

(c)check the quality of the outputs and methods referred to in sub-paragraph (b);

(d)ensure that the outsourced activities are carried out in such a manner that those are responsive to the inherent risks and control risks identified in the risk assessment referred to in paragraph 27(1).

Effectiveness of control system

32.—(1) The maritime operator must monitor the effectiveness of the control system including by—

(a)carrying out internal reviews;

(b)taking into account any relevant findings of the verifier during the verification of annual emissions report.

(2) When the maritime operator finds the control system ineffective or not commensurate with the risks identified, it must—

(a)seek to improve the control system;

(b)update the emissions monitoring plan or the underlying written procedures for data flow activities, risk assessments and control activities, as appropriate.

Data gaps

33.—(1) Where data relevant for the determination of a ship’s maritime emissions for one or more voyages are missing, the maritime operator must use surrogate data calculated in accordance with the alternative method or methods indicated in the emissions monitoring plan.

(2) Where data relevant for the determination of a ship’s maritime emissions for one or more voyages are missing, for which the emissions monitoring plan does not list alternative monitoring methods or alternative data sources for corroborating data or for closing the data gap, the maritime operator must use an appropriate estimation method for determining conservative surrogate data for the respective time period and missing parameter.

(3) Where, for technical reasons, it is temporarily not feasible to apply the approach to monitoring set out in the emissions monitoring plan, the maritime operator must—

(a)apply a method based on alternative data sources listed in the emissions monitoring plan for the purpose of performing corroborative checks; or

(b)if such an alternative is not contained in the emissions monitoring plan, an alternative method which provides surrogate data or a conservative estimation until the conditions for application of the emissions monitoring plan have been restored.

(4) The maritime operator must take all necessary measures to achieve a prompt application of the emissions monitoring plan.

(5) Where an estimation method is used in accordance with sub-paragraph (2), or where a temporary deviation from the emissions monitoring plan occurs in accordance with sub-paragraph (3), the maritime operator must without undue delay—

(a)develop a written procedure for avoiding this type of data gap in the future;

(b)vary the emissions monitoring plan.

Records and documentation

34.—(1) The maritime operator must keep records of data and information in line with its emissions monitoring plan.

(2) The documented and archived monitoring data must allow for the verification of the annual emissions reports.

(3) Data reported by the maritime operator contained in an electronic reporting and data management system set up by the regulator may be considered to be retained by the maritime operator, if the maritime operator can access those data.

(4) The maritime operator must ensure that relevant documents are available when and where they are needed to perform the data flow activities and control activities.

(5) The maritime operator must, upon request, make those documents available to the regulator and to the verifier verifying the annual emissions report.

PART 6 CALCULATION OF MARITIME EMISSIONS

Formulae to be used when calculating maritime emissions

35.—(1) For the purposes of calculating maritime emissions, a maritime operator must use the following formula—

(2) In the application of the formula referred to in sub-paragraph (1)—

(a)a maritime operator must calculate CO₂ emissions by adding the CO₂ emissions of all fuels i used, applying the following formula—

(b)a maritime operator must calculate CH₄ emissions by adding the CH₄ emissions resulting from the combustion of all fuels i used together with the emissions caused by CH₄ slippage, applying the following formula—

(c)a maritime operator must calculate N₂O emissions by adding the N₂O emissions of all fuels i used applying the following formula—

(3) The terms used in the equations are to be interpreted in accordance with Table C1.

Table C1

Explanation of terms used in relation to the equations

Term	Explanation
ME _ETS	Maritime emissions to be reported under this Schedule, expressed in tonnes CO ₂ equivalent, where “CO ₂ equivalent” means the metric measure used to compute the emissions from CO ₂ , CH ₄ and N ₂ O on the basis of their global warming potential, by converting amounts of CH ₄ and N ₂ O to the equivalent amount of carbon dioxide with the same global warming potential.
CO ₂ ETS	Total aggregated CO ₂ emitted.
CH ₄ ETS	Total aggregated CH ₄ emitted.
N ₂ O _ETS	Total aggregated N ₂ O emitted.
GWP _CH4	Global warming potential of CH ₄ over 100 years which is 28tCO _2(e) /tCH ₄ .
GWP _N20	Global warming potential of N ₂ O over 100 years which is 265tCO _2(e) /tN ₂ O.
i	Index corresponding to the fuels used on board the ship in the scheme year.
j	Index corresponding to emission sources on board the ship. For the purpose of this Schedule, the sources include the main engines, auxiliary engines, gas turbines, boilers and inert gas generators.
M _i	Fuel consumption, as total mass of the specific fuel i used (total for all emission sources).
M _{i, j}	Fuel consumption, as mass of the specific fuel i used in emission source j.
C _j	Tank to Wake emission factor of slipped fuel (slippage coefficient) as a percentage of the mass of the fuel i used by the emission source j [%]. C_j includes fugitive and slipped emissions. Fugitive and slipped emissions are emissions caused by the amount of fuel that does not reach the combustion chamber of the emission source or that is not consumed by the emission source because they are un-combusted, vented or leaked from the system.
M _i,NC	Total mass of fuel i not combusted but released into the atmosphere. For the purpose of determining such amount, a maritime operator must apply the following formula—
CH ₄ S	Amount of CH₄ non combusted released into the atmosphere. For the purpose of determining such amount, a maritime operator must apply the following formula—
EF _CO2,i	Tank to Wake CO ₂ emission factor by fuel i, as defined in Table C2.
EF _CH4,i	Tank to Wake CH ₄ emission factor by fuel i, as defined in Table C2.
EF _N2O,i	Tank to Wake N ₂ O emission factor by fuel i, as defined in Table C2.

(4) For the purposes of calculating maritime emissions, fuel consumption must be calculated separately for—

(a)voyages;

(b)in-port activities.

Default values for emission factors

36.—(1) The default values, as contained in Table C2 below sub-paragraph (5), for emission factors for fuels and emission sources used on board the ship must be applied for the purpose of this Schedule.

(2) In Table C2—

“TBM” stands for “to be measured”;

“N/A” stands for “not available”;

“—” means “not applicable”.

(3) Where an entry in Table C2 indicates either TBM or N/A, the highest default value of the fuel class in the same column must be used. Where, for a particular fuel class, all entries in the same column indicate either TBM or N/A, the default value of the least favourable fossil fuel type must be used. This rule does not apply to column 6 where TBM or N/A refers to non-available values for the emission source.

(4) For non-fossil fuels not listed in Table C2, the maritime operator must determine the emission factors in accordance with Part 9.

(5) Where there is fuel blending, each fuel must be considered separately.

Table C2

Default emission factors

1	2	3	4	5	6
Fuel class	Type of fuel	EF_CO2	EF_CH4	EF_N2O	C _j as % of the mass of the fuel used by the emission source
Fossil	HFO ISO 8217 Grades RME to RMK	3.114	0.00005	0.00018	—
	LFO ISO 8217 Grades RMA to RMD	3.151	0.00005	0.00018	—
	MDO MGO ISO 8217 Grades DMX to DMB	3.206	0.00005	0.00018	—
	LNG	2.750	0	0.00011	3.1 for LNG Otto (dual fuel medium speed) 1.7 for LNG Otto (dual fuel slow speed) 0.2 for LNG Diesel (dual fuel slow speed) 2.6 for Lean-Burn Spark-Ignited (LBSI)
	LPG (Butane)	3.03	TBM	TBM	N/A
	LPG (Propane)	3.00	TBM	TBM	N/A
	H ₂ (fossil)	0	0	— for fuel cells TBM for Internal Combustion Engine (ICE)	—
	NH ₃ (fossil)	0	N/A	TBM	N/A
	Methanol (fossil)	1.375	TBM	TBM	—
Biofuels	Ethanol	1.913	TBM	TBM	—
	Bio-diesel	2.834	TBM	TBM	—
	Hydrotreated Vegetable Oil (HVO)	3.115	0.00005	0.00018	—
	Liquified Bio-methane as transport fuel (Bio-LNG)	2.750	0	0.00011	3.1 for LNG Otto (dual fuel medium speed) 1.7 for LNG Otto (dual fuel slow speed) 0.2 for LNG Diesel (dual fuel slow speed) 2.6 for Lean-Burn Spark-Ignited (LBSI)
	Bio-methanol	1.375	TBM	TBM	—
	Other	3.115	0.00005	0.00018	—
	Bio-H ₂	0	0	0 for fuel cells TBM for ICE	—
Renewable Fuels of Non-Biological Origin (RFNBO) – e-fuels	e-diesel	3.206	0.00005	0.00018	—
	e-methanol	1.375	TBM	TBM	—
	e-LNG	2.750	0	0.00011	3.1 for LNG Otto (dual fuel medium speed) 1.7 for LNG Otto (dual fuel slow speed) 0.2 for LNG diesel (dual fuel slow speed) 2.6 for Lean-Burn Spark-Ignited (LBSI)
	e-H ₂	0	0	0 for fuel cells TBM for ICE	—
	e-NH ₃	0	N/A	TBM	N/A
	e-LPG	N/A	N/A	N/A	N/A
	e-DME	N/A	N/A	N/A	—
Notes Column 1 identifies the class of the fuels. Column 2 identifies the name of the relevant types of fuel for each class. Column 3 contains the emission factor EF for carbon dioxide in gCO₂/gfuel. Column 4 contains the emission factor EF for methane in gCH₄/gfuel. Column 5 contains the emission factor EF for nitrous oxide in gN₂O/gfuel. Column 6 identifies the part of the fuel lost as fugitive and slipped emissions (C_j) measured as % of mass of fuel used by the specific emission source. For fuels such as LNG for which fugitive and slipped emissions exist, the amount of fugitive and slipped emissions as presented in the table is expressed in % of the mass of fuel used. The values of C_j in the table are calculated at 50% of the full engine load.

Emissions reduction claims

37.—(1) A person who is a maritime operator in relation to a scheme year may submit to the regulator an emissions reduction claim with respect to the carbon dioxide emissions from a fuel that—

(a)is an eligible fuel in accordance with a direction given by the relevant national authority to the regulator under section 52 of the CCA 2008;

(b)was purchased either—

(i)in the scheme year to which the emissions reduction claim relates, or

(ii)no more than three months before the start of the scheme year to which the emissions reduction claim relates;

(c)has been delivered to a point of no return before 31st March in the year following the scheme year to which the emissions reduction claim relates;

(d)has not been used by the person making the emissions reduction claim—

(i)to obtain an emissions reduction in the UK ETS in relation to another scheme year;

(ii)to obtain an emissions reduction or financial benefit in any scheme other than the UK ETS;

(e)has not been sold to a third party.

(2) Where the conditions in sub-paragraphs (1)(a) to (e) are met, the emission factor of the eligible fuel is zero.

(3) An emissions reduction claim must be verified in accordance with Part 8.

(4) The amount of fuel in respect of which the person in sub-paragraph (1) may make an emissions reduction claim must not exceed the total amount of fuel used by that person in respect of its maritime activities in that scheme year.

PART 7 REPORTING REQUIREMENTS

Contents of the annual emissions report

38.—(1) The annual emissions report that a maritime operator is required to submit in accordance with paragraph 14 must contain the following information—

(a)information relating to each ship whose emissions are being reported, including—

(i)the name of the ship;

(ii)the IMO ship identification number;

(iii)the flag state and the state of registration of the bareboat charter (if applicable);

(iv)information on each monitoring method used and the related level of uncertainty;

(v)total amount of each type of fuel consumed;

(vi)aggregated maritime emissions from all in-port activities;

(vii)aggregated maritime emissions from all voyages other than those in sub-paragraph (viii);

(viii)aggregated maritime emissions from all voyages between Great Britain and Northern Ireland;

(ix)total aggregated maritime emissions from all maritime activities;

(b)total aggregated maritime emissions from all maritime activities performed by all ships whose emissions are being reported;

(c)details of any emissions reduction claim arising from eligible fuels;

(d)details of any applicable surrender deduction under paragraph 15(1)(a);

(e)total maritime emissions less any surrender deduction.

(2) In this paragraph, “ aggregated maritime emissions ” means that data is separately provided for carbon dioxide, methane and nitrous oxide.

PART 8 VERIFICATION AND ACCREDITATION

CHAPTER 1 GENERAL PROVISIONS

Introductory

39. Verification of the maritime operator’s annual emissions report must be carried out in accordance with this Part.

Interpretation

40. In this Part—

“ accreditation ” means attestation by the national accreditation body that a verifier meets the requirements set by paragraph 67(2), and the requirements of this Part and is thus qualified to carry out the verification activities pursuant to this Part;

“ analytical procedures ” means the analysis of fluctuations and trends in the data including an analysis of the relationships that are inconsistent with other relevant information or that deviate from predicted amount;

“ assessment team ” means one or more assessors appointed by the national accreditation body to assess a verifier pursuant to this Part;

“ assessor ” means a person assigned by the national accreditation body to assess a verifier pursuant to this Part, individually or as part of an assessment team;

“ competence ” means the ability to apply knowledge and skills to carry out an activity;

“ detection risk ” means the risk of a verifier not detecting a material misstatement;

“ independent reviewer ” means a person assigned by the verifier specifically to carry out internal review activities, who belongs to the same entity but has not carried out any of the verification activities subject to review;

“ inherent risk ” means the susceptibility of a parameter in the annual emissions report to misstatements that could be material, individually or taken together, before taking into consideration the effect of any related control activities;

“ internal verification documentation ” means all internal documentation that a verifier has compiled to record documentary evidence and justification of activities carried out to verify an annual emissions report pursuant to this Part;

“ lead assessor ” means an assessor who is given overall responsibility for the assessment of a verifier pursuant to this Part;

“ level of assurance ” means the degree of assurance that the verifier provides on the verification report based on the objective of reducing the verification risk according to the circumstances of the verification engagement;

“ material misstatement ” means a misstatement that, in the opinion of the verifier, individually or when taken together with other misstatements, exceeds the materiality level or could affect the treatment of the maritime operator’s annual emissions report by the regulator;

“ materiality level ” means the quantitative threshold or cut-off point above which the verifier considers misstatements, individually or taken together, to be material;

“ misstatement ” means an omission, misrepresentation or error in the reported data, apart from the uncertainty permissible under this Part;

“ national accreditation body ” means the United Kingdom Accreditation Service ;

“ non-conformity ” means—

(a)

for the purpose of verifying an annual emissions report, one of the following—

(i)

the maritime emissions and other relevant information are not reported in line with the monitoring methodology described in the emissions monitoring plan issued by the regulator;

(ii)

the reported data do not fulfil the requirements under this Part;

(b)

for the purpose of accreditation, any act or omission by the verifier that is contrary to requirements under this Part;

“ reasonable assurance ” means a high but not absolute level of assurance, expressed positively in the verification opinion, as to whether the annual emissions report subject to verification is free of material misstatements;

“site”, for the purposes of verifying the annual emissions report means a location where the monitoring process is defined and managed, including locations where relevant data and information are controlled and stored;

“ technical expert ” means a person who provides detailed knowledge and expertise on a specific matter as required for the performance of verification activities for the purposes of paragraphs 45 to 61 and accreditation activities for the purposes of paragraphs 71 to 88;

“ UK ETS auditor ” means an individual member of a verification team responsible for verifying an annual emissions report, other than the UK ETS lead auditor;

“ UK ETS lead auditor ” means a UK ETS auditor in charge of directing and supervising the verification team, who is responsible for performing and reporting on the verification of an annual emissions report;

“ verification risk ” means the risk (a function of inherent, control and detection risk) of the verifier expressing an inappropriate verification opinion when the annual emissions report is not free of material misstatements.

General obligations for the verifiers

41.—(1) The verifier must carry out the verification and the activities required by this Part with the aim of providing a verification report that concludes with reasonable assurance that the maritime operator’s annual emissions report is free from material misstatements.

(2) The verifier must plan and perform the verification with an attitude of professional scepticism, recognising that circumstances may exist that cause the information in the maritime operator’s annual emissions report to contain material misstatements.

(3) The verifier must carry out verification in the public interest and be independent of the maritime operator and the regulator.

(4) During the verification, the verifier must assess whether—

(a)the maritime operator’s annual emissions report is complete and meets the requirements laid down in Part 7;

(b)the maritime operator has acted in compliance with the requirements of the emissions monitoring plan issued by the regulator;

(c)the data in the maritime operator’s annual emissions report are free from material misstatements;

(d)information can be provided in support of the maritime operator’s data flow activities, control system and associated procedures to improve the performance of their monitoring and reporting.

(5) For the purpose of sub-paragraph (4)(c), the verifier must obtain clear and objective evidence from the maritime operator to support the reported aggregated maritime emissions, any surrender deduction under paragraph 15(1)(a), and any emissions reduction claim made pursuant to paragraph 37, taking into account all other information provided in the maritime operator’s annual emissions report.

(6) If the verifier discovers that a maritime operator is not complying with paragraphs 13 or 14 that irregularity must be included in the verification report.

(7) If the emissions monitoring plan has not been issued by the regulator, is incomplete or if significant variations have been made during the scheme year which have not been accordingly approved by the regulator, the verifier must advise the maritime operator to apply to the regulator for an emissions monitoring plan, or a variation to its emissions monitoring plan.

(8) Following the issue or variation of the emissions monitoring plan by the regulator, the verifier must continue, repeat or adapt the verification activities accordingly.

(9) If the emissions monitoring plan has not been issued or varied before the issue of the verification report, the verifier must report this in the verification report.

Presumption of conformity

42. A verifier that demonstrates conformity with the criteria laid down in ISO 14065:2020, in conjunction with ISO/IEC 17029:2019, will be presumed to comply with the requirements of paragraphs 43 to 70 of this Part in so far as the applicable standards cover those requirements.

CHAPTER 2 VERIFICATION OF ANNUAL EMISSIONS REPORTS

Pre-contractual obligations

43.—(1) Before accepting a verification engagement, a verifier must obtain a proper understanding of the maritime operator and assess whether it can undertake the verification.

(2) For this purpose the verifier must at least—

(a)evaluate the risks involved to undertake the verification of the maritime operator’s annual emissions report in accordance with this Part;

(b)undertake a review of the information supplied by the maritime operator to determine the scope of the verification;

(c)assess whether the engagement falls within the scope of its accreditation;

(d)assess whether it has the competence, personnel and resources required to select a verification team capable of dealing with the complexity of the maritime operator’s activities and fleet as well as whether it is capable of successfully completing the verification activities within the timeframe required;

(e)assess whether it is capable of ensuring that the potential verification team at its disposal holds all the competence, and persons required to carry out verification activities for that specific maritime operator;

(f)determine, for each verification engagement requested, the time allocation needed to properly carry out the verification.

(3) The maritime operator must provide the verifier with all relevant information that enables the verifier to carry out the activities referred to in sub-paragraph (2).

Time allocation

44.—(1) When determining the time allocation for a verification engagement referred to in paragraph 43(2)(f), the verifier must at least take into account—

(a)the complexity of the maritime operator’s activities and fleet;

(b)the level of information and the complexity of the issued emissions monitoring plan;

(c)the required materiality level;

(d)the complexity and completeness of the data flow activities and the control system of the maritime operator;

(e)the location of information and data related to maritime emissions.

(2) The verifier must ensure that the verification contract provides for the possibility for time to be charged in addition to the time agreed in the contract, where such additional time is found to be needed for the strategic analysis, risk analysis or other verification activities.

(3) Situations where the additional time may be needed include the following—

(a)during the verification where the data flow activities, control activities or logistics of the maritime operator seem to be more complex than initially anticipated;

(b)where misstatements, non-conformities, insufficient data or errors in the data sets are identified by the verifier during the verification.

(4) The verifier must record the time allocated in the internal verification documentation.

Information to be provided by maritime operators

45.—(1) A maritime operator must provide the verifier with the following supporting information prior to the strategic analysis and verification of the annual emissions report—

(a)the latest version of the emissions monitoring plan as well as any other relevant versions of the emissions monitoring plan previously issued by the regulator;

(b)the annual emissions report for the scheme year to be verified;

(c)where applicable, a copy of the verified annual emissions report and verification report from the previous year, if the verification was not carried out by the same verifier;

(d)a description of the maritime operator’s data flow activities;

(e)the maritime operator’s risk assessment referred to in paragraph 27 and an outline of the overall control system;

(f)the procedures mentioned in the emissions monitoring plan issued by the regulator, including procedures for data flow activities and control activities;

(g)if the emissions monitoring plan was varied during the scheme year, a record of all those variations;

(h)all relevant correspondence with the regulator, in particular information related to the notification of variations of the emissions monitoring plan;

(i)where applicable, information on databases and data sources used for monitoring and reporting purposes;

(j)where applicable, the approval from the regulator for carrying out a virtual site visit pursuant to paragraph 55;

(k)a list of all ships in which the maritime operator carried out maritime activities;

(l)any other relevant information necessary for planning and carrying out the verification.

(2) A maritime operator must provide the verifier with the following supporting information in relation to each ship listed in accordance with sub-paragraph (1)(k) prior to verification of the annual emissions report—

(a)a list of all voyages carried out by the ship in question during the scheme year;

(b)where data gaps occurred during the scheme year—

(i)the number of voyages for which data gaps occurred, and the circumstances and reasons for such data gaps;

(ii)the estimation method for surrogate data applied as referred to in paragraph 33 and, where applicable, in the emissions monitoring plan;

(iii)the amount of emissions calculated based on surrogate data;

(c)copies of the ship’s official logbook and of the oil record book (if separate);

(d)copies of bunkering documents;

(e)copies of any relevant certificates concerning fuels for the purposes of determining emission factors in accordance with paragraph 36;

(f)copies of any relevant documentation supporting an emissions reduction claim made under paragraph 37.

(3) If relevant to the monitoring method applied, the verifier may ask the maritime operator to provide—

(a)an overview of the IT landscape showing the data-flow for the relevant ship, including information on databases and where data is held and processed;

(b)evidence of the maintenance of measurement equipment and flow meters;

(c)evidence of the accuracy of measurement equipment and flow meters;

(d)an extract of fuel consumption activity data from flow meters;

(e)copies of evidence of fuel tank meter readings;

(f)an extract of activity data from direct emissions measurement systems;

(g)any other information relevant to the verification of the annual emissions report.

(4) If the verifier asks for any of the information in sub-paragraph (3), the maritime operator must provide that information.

(5) Before the verifier issues the verification report, the maritime operator must provide it with the final authorised and internally validated annual emissions report.

Strategic analysis

46.—(1) At the beginning of the verification, the verifier must assess the likely nature, scale and complexity of the verification tasks by carrying out a strategic analysis of all activities relevant to the maritime operator.

(2) The verifier must collect and review the information needed to assess that the verification team is sufficiently competent to carry out the verification, to determine that the time allocation indicated in the contract has been set correctly and to ensure that it is able to conduct the necessary risk analysis.

(3) The information referred to in sub-paragraph (2) must include—

(a)the information referred to in paragraph 45;

(b)the information obtained from the verification in previous years, if the verifier is carrying out the verification for the same maritime operator;

(c)the required materiality level.

(4) When reviewing the information referred to in sub-paragraph (3), the verifier must assess the following—

(a)the size and nature of the maritime operator, the distribution of information in different locations as well as the number and type of maritime activities;

(b)the emissions monitoring plan issued by the regulator as well as the specifics of the monitoring methodology laid down in that emissions monitoring plan;

(c)the nature, scale and complexity of emission sources and source streams as well as the equipment and processes that have resulted in maritime emissions data, including the measurement equipment described in the emissions monitoring plan and the origin and application of calculation factors and other primary data sources;

(d)the data flow activities, the control system and the control environment;

(e)the ships’ engines and fuel types used, as well as the number of voyages carried out by ships during the scheme year.

(5) When carrying out the strategic analysis, the verifier must check—

(a)whether the emissions monitoring plan presented to it is the most recent version issued by the regulator;

(b)whether there have been any variations to the emissions monitoring plan during the scheme year and whether these variations have been notified to and, if required, issued by the regulator pursuant to paragraph 12.

Risk analysis to be carried out by verifiers

47.—(1) The verifier must identify potential risks relating to the monitoring and reporting process by comparing reported maritime emissions with estimated data based on ship tracking data and characteristics such as the installed engine power, and must carry out further analysis where significant deviations are found.

(2) The verifier must identify potential risks relating to the different calculation steps by reviewing all data sources and methodologies used.

(3) The verifier must consider any effective risk control methods applied by the maritime operator to reduce levels of uncertainty associated with the accuracy specific to the monitoring methods used.

(4) The verifier must identify and analyse—

(a)the inherent risks;

(b)the control risks;

(c)the detection risks.

(5) When identifying and analysing the elements referred to in sub-paragraph (4), the verifier must at least consider—

(a)the findings from the strategic analysis referred to in paragraph 46(1);

(b)the information referred to in paragraph 45(1) and (2) and paragraph 46(3)(b);

(c)the materiality level referred to in paragraph 46(3)(c).

(6) If the verifier determines that the maritime operator has failed to identify the relevant inherent risks and control risks in its risk assessment, the verifier must inform the maritime operator of that determination.

(7) When performing the risk analysis, the verifier must consider any areas of higher verification risk including—

(a)the number of ships under the maritime operator’s responsibility during the scheme year;

(b)the number of maritime operator changes for ships under the maritime operator’s responsibility during the scheme year;

(c)the diversity of ships’ engines;

(d)the number of different flag States;

(e)the voyage data;

(f)fuel consumption;

(g)the fuel types used, including the diversity of fuel types used;

(h)the application of any surrender deduction pursuant to paragraph 15(1)(a);

(i)the application of any derogation pursuant to paragraph 19;

(j)the maritime emissions;

(k)the aggregation of the data in the annual emissions report.

(8) When identifying and analysing the areas listed in sub-paragraph (7), the verifier must consider the existence, completeness, accuracy, consistency, transparency and relevance of the information reported.

(9) Where appropriate, in light of the information obtained in the course of verification, the verifier must revise the risk analysis and modify or repeat the verification activities.

Verification plan

48.—(1) The verifier must draft a verification plan commensurate with the information obtained and the risks identified during the risk analysis.

(2) The verification plan must include—

(a)a verification programme describing the nature and scope of the verification activities and the time and manner in which they are to be carried out;

(b)a test plan setting out the scope and methods of testing the control activities as well as the procedures for control activities;

(c)a data sampling plan setting out the scope and methods of data sampling relating to data points underlying the aggregated maritime emissions, fuel consumption or other relevant information in the annual emissions report.

(3) The verifier must set up the test plan referred to sub-paragraph (2)(b) in a manner that allows it to determine the extent to which the relevant control activities may be relied on for the purposes of assessing compliance with the requirements mentioned in paragraph 41(4)(b) or (c).

(4) When determining the sampling size and sampling activities for testing the control activities under sub-paragraph (2)(b), the verifier must consider the following elements—

(a)the inherent risks;

(b)the control environment;

(c)the relevant control activities;

(d)the requirement to deliver a verification opinion with reasonable assurance.

(5) When determining the sampling size and sampling activities for sampling the data referred to in sub-paragraph (2)(c), the verifier must consider the following elements—

(a)the inherent risks and control risks;

(b)the results of the analytical procedures;

(c)the requirement to deliver a verification opinion with reasonable assurance;

(d)the materiality level;

(e)the materiality of the contribution of an individual data element for the overall data set.

(6) The verifier must set up and implement the verification plan such that the verification risk is reduced to an acceptable level to obtain reasonable assurance that the maritime operator’s report is free from material misstatements.

(7) The verifier must update the risk analysis and the verification plan, and adapt the verification activities during the verification when it finds additional risks that need to be reduced or when there is less actual risk than initially expected.

Verification process

49.—(1) The verifier must implement the verification plan and, on the basis of the risk analysis, verify whether the monitoring and reporting systems, as described in the emissions monitoring plan, exist in practice and are properly implemented.

(2) For the purpose of sub-paragraph (1), the verifier must consider carrying out the following types of processes—

(a)enquiry with relevant staff;

(b)document inspection;

(c)observation and walkthrough procedures.

(3) The verifier must verify the following—

(a)the data flow activities and the systems used in the data flow, including information technology systems;

(b)whether the control activities are appropriately documented, implemented, maintained and effective to mitigate the inherent risks;

(c)whether the procedures listed in the emissions monitoring plan are effective to mitigate the inherent risks and control risks;

(d)whether the procedures listed in the emissions monitoring plan are implemented, sufficiently documented and properly maintained.

(4) For the purposes of sub-paragraph (3)(a), the verifier must track the data flow following the sequence and interaction of the data flow activities from primary source data to the compilation of the annual emissions report.

(5) For the purposes of sub-paragraphs (3)(b) to (d), the verifier may use sampling methods specific to a ship provided that, based on the risk analysis, sampling is justified.

Analytical procedures

50.—(1) The verifier must use analytical procedures to assess the plausibility and completeness of data where the inherent risk, the control risk and the aptness of the maritime operator’s control activities show the need for such analytical procedures.

(2) In carrying out the analytical procedures referred to in sub-paragraph (1), the verifier must assess reported data to identify potential risk areas and to subsequently validate and tailor the planned verification activities. The verifier must at least—

(a)assess the plausibility of fluctuations and trends over time or between comparable items;

(b)identify immediate outliers, unexpected data and data gaps.

(3) In applying the analytical procedures referred to in sub-paragraph (1), the verifier must perform the following procedures—

(a)preliminary analytical procedures on aggregated data before carrying out the activities referred to in paragraph 49 in order to understand the nature, complexity and relevance of the reported data;

(b)substantive analytical procedures on the aggregated data and the data points underlying these data for the purposes of identifying potential structural errors and immediate outliers;

(c)final analytical procedures on the aggregated data to ensure that all errors identified during the verification process have been resolved correctly.

(4) Where the verifier identifies outliers, fluctuations, trends, data gaps or data that are inconsistent with other relevant information or that differ significantly from expected amounts or ratios, the verifier must obtain explanations from the maritime operator supported by additional relevant evidence.

(5) Based on the explanations and additional evidence provided, the verifier must assess the impact on the verification plan and the verification process to be performed.

Verification of reported data

51.—(1) The verifier must verify the data reported in the annual emissions report through the following—

(a)detailed testing, including by tracing the data back to the primary data source;

(b)cross-checking the data with external data sources, including ship-tracking data;

(c)performing reconciliations;

(d)checking thresholds as regards appropriate data;

(e)carrying out recalculations.

(2) As part of the data verification referred to in sub-paragraph (1), the verifier must verify—

(a)the completeness of the annual emissions report, including that all ships under the maritime operator’s responsibility during the scheme year and their corresponding emissions falling within this Schedule;

(b)the completeness of emission sources as described in the emissions monitoring plan;

(c)the completeness of data;

(d)the consistency between reported aggregated data and data from relevant documentation or primary sources;

(e)the consistency between aggregated fuel consumption and data on fuel purchased or otherwise supplied to the ship in question, if applicable;

(f)the reliability and accuracy of the data;

(g)the correctness of the calculations leading to the aggregated emissions data.

Verification of methods applied for missing data

52.—(1) Where methods laid down in the emissions monitoring plan issued by the regulator have been used to complete missing data pursuant to paragraph 33, the verifier must verify whether the methods used were appropriate for the specific situation and whether they have been applied correctly.

(2) Where the methods referred to in sub-paragraph (1) were not issued beforehand, the verifier must verify whether the approach used by the maritime operator to complete the missing data ensures that the emissions are not underestimated and that that approach does not lead to material misstatements.

Materiality level

53.—(1) For the purpose of verifying fuel consumption and maritime emissions data in the annual emissions report, the materiality level is 5% of the respective total reported for each item in the scheme year.

(2) For the purpose of verifying an annual emissions report, when the sum of all ships’ total aggregated emissions to be reported under this Schedule—

(a)exceeds 500 000 tonnes of CO₂ equivalent, the materiality level is 2% of the emissions data in the scheme year;

(b)does not exceed 500 000 tonnes of CO₂ equivalent, the materiality level is 5% of the emissions data in the scheme year.

Site visits

54.—(1) At one or more appropriate times during the verification process, the verifier must carry out a site visit in order to verify an annual emissions report, in particular based on the outcome of the risk analysis pursuant to paragraph 47.

(2) The verifier must also determine the activities to be performed and the time needed for the site visit.

(3) The maritime operator must provide the verifier with access to its sites, including to its relevant onshore locations and its ships.

Virtual site visits

55.—(1) For the purpose of verifying the annual emissions report, the verifier may, with the agreement of the maritime operator and subject to the approval of the regulator in accordance with sub-paragraph (4), carry out a virtual site visit instead of carrying out a physical site visit in accordance with paragraph 54.

(2) Before any virtual site visit, the verifier must undertake a risk analysis that includes considering measures to reduce the verification risk to an acceptable level to obtain reasonable assurance that the maritime operator’s annual emissions report is free from material misstatements.

(3) An application for the regulator’s approval for a virtual site visit must be submitted by a maritime operator on or before 28th February in the year after the scheme year to which the maritime operator’s report relates or such later date as the regulator may specify.

(4) On an application being submitted, the regulator must take the following into consideration in deciding whether or not to approve the virtual site visit—

(a)the information provided by the verifier on the outcome of the risk analysis;

(b)information on how the virtual site visit will be carried out;

(c)evidence that measures are taken to reduce the verification risk to an acceptable level;

(d)any proposal to carry out a physical site visit after the virtual site visit;

(e)any other information requested by the regulator to enable the regulator to decide whether or not to approve the virtual site visit.

(5) When approving a virtual site visit, the regulator may impose conditions on the approval (including a condition that a physical site visit be carried out within a period specified by the regulator) and the maritime operator must ensure that any conditions are complied with.

Addressing misstatements, non-conformities and non-compliance

56.—(1) Where the verifier identifies misstatements, non-conformities, or non-compliance with the monitoring and reporting requirements in this Schedule in the course of the verification of the annual emissions report, it must inform the maritime operator of this without undue delay and request relevant corrections within a reasonable deadline.

(2) The maritime operator must correct any misstatements or non-conformities communicated under sub-paragraph (1).

(3) The verifier must document in the internal verification documentation, marking them as resolved, all misstatements, non-conformities or non-compliance with the monitoring and reporting requirements that have been corrected in the course of the verification.

(4) Where the maritime operator does not correct the misstatements or non-conformities referred to in sub-paragraph (1), the verifier must, before issuing the verification report, ask the maritime operator to explain the main causes of the misstatements or non-conformities.

(5) The verifier must assess whether—

(a)the uncorrected misstatements, individually or together with other misstatements, have an impact on the total reported maritime emissions or other relevant information and whether that impact leads to material misstatements;

(b)the uncorrected non-conformity, individually or when combined with other non-conformities, has an impact on the reported data and whether that leads to material misstatement.

(6) The verifier must consider misstatements or non-conformities which, individually or together with other misstatements, are below the materiality level set in paragraph 53 as material misstatements where that is justified by their scale and nature or by the particular circumstances of their occurrence.

Conclusions of the verification

57. To complete the verification of the annual emissions report, the verifier must—

(a)confirm that all verification activities required under this Part have been carried out;

(b)perform final analytical procedures on the aggregated data to ensure that they are free of material misstatements;

(c)verify whether the information in the report satisfies the requirements of the monitoring and reporting requirements in this Schedule;

(d)assess whether the verification risk is at an acceptably low level to obtain reasonable assurance;

(e)ensure that sufficient evidence has been gathered to be able to give a verification opinion with reasonable assurance that the annual emissions report is free from material misstatements;

(f)ensure that the verification process is fully documented in the internal verification documentation and that a final judgment in the verification report can be given;

(g)before issuing the verification report, prepare the internal verification documentation and the draft report and submit them to the independent reviewer in accordance with paragraph 61;

(h)authorise a person to authenticate the report on the basis of the conclusions reached by the independent reviewer and the evidence of the internal verification documentation, and notify the maritime operator of this authorisation.

Recommendations for improvement

58.—(1) The verifier must communicate to the maritime operator recommendations for improvement in relation to uncorrected misstatements and non-conformities not leading to material misstatements.

(2) The verifier must communicate any other recommendations for improvement that it identifies relating to the following areas of the maritime operator’s performance—

(a)the maritime operator’s risk assessment;

(b)the development, documentation, implementation and maintenance of data flow activities and control activities as well as the evaluation of the control system;

(c)the development, documentation, implementation and maintenance of procedures for data flow activities and control activities as well as other procedures that a maritime operator has to establish pursuant to Part 5;

(d)the monitoring and reporting of emissions, including in relation to reducing risks and enhancing efficiency in the monitoring and reporting.

(3) When communicating recommendations to the maritime operator, the verifier must remain impartial in relation to the maritime operator, the ships and the monitoring and reporting system and must not jeopardise its impartiality by giving advice or developing parts of the monitoring and reporting process.

(4) During verification following a year in which recommendations for improvement were made in a verification report—

(a)the verifier must verify whether the maritime operator has implemented those recommendations for improvement and the manner in which that has been done;

(b)if the maritime operator has not implemented those recommendations, the verifier must assess whether that increases or may increase the risk of misstatements.

Verification report

59.—(1) On the basis of the information collected, the verifier must issue a verification report on each annual emissions report subject to verification.

(2) The verification report must include a verification opinion verifying the annual emissions report as satisfactory or unsatisfactory.

(3) For the purposes of sub-paragraph (2), the annual emissions report will be considered to have been verified as satisfactory only if it is free of material misstatements and must not be verified as satisfactory if—

(a)it contains material misstatements that were not corrected before the verification report was issued;

(b)the scope of verification is too limited pursuant to pursuant to paragraph 60 and the verifier could not obtain sufficient evidence to issue a verification opinion with reasonable assurance that the annual emissions report is free from material misstatements;

(c)non-conformities, individually or combined with other non-conformities, provide insufficient clarity and prevent the verifier from stating with reasonable assurance that the maritime operator’s annual emissions report is free from material misstatement.

(4) The verification report must contain the following elements—

(a)the name of the maritime operator and the IMO unique company and registered owner identification number;

(b)a title making it clear that it is a verification report;

(c)the identity of the verifier, including the name and business email address of a contact person;

(d)the objectives and scope of the verification;

(e)a reference to the annual emissions report and the scheme year subject to verification;

(f)details, including version number and date of issue, of any emissions monitoring plan issued by the regulator that is relevant to the verification as well as period of validity for each plan;

(g)the aggregated maritime emissions data submitted in accordance with paragraph 38;

(h)a reference to the verification standards used;

(i)a summary of the verifier’s procedures, including information on and dates of site visits, information on the reasons for conducting virtual site visits;

(j)the responsibilities of the maritime operator, regulator and verifier;

(k)a verification opinion;

(l)a description of uncorrected misstatements and non-conformities as referred to in paragraph 56, including their nature and scale, whether or not they have a material impact and the elements of the annual emissions report to which they relate, if any;

(m)any issues of non-compliance with the monitoring and reporting requirements in this Schedule which have become apparent during the verification;

(n)a description of any non-conformity issue as defined in sub-paragraph (a)(ii) of the definition of non-conformity in paragraph 40, which have become apparent during the verification;

(o)any data gaps and the corresponding amount of emissions;

(p)where applicable, recommendations for improvement;

(q)the names of the UK ETS lead auditor, the independent reviewer and, where applicable, the UK ETS auditor and the technical expert that were involved in the verification of the annual emissions report;

(r)the date of the verification report and signature of an authorised person on behalf of the verifier, including the name of that person.

(5) The verifier must describe the misstatements, non-conformities and non-compliances in sufficient detail in the verification report to allow the maritime operator as well as the regulator to understand, including the following aspects—

(a)the size and nature of the misstatement, non-conformity or non-compliance;

(b)why the misstatement has material effect, or not;

(c)to which element of the annual emissions report the misstatement refers, or to what element of the emissions monitoring plan the non-conformity refers;

(d)to which paragraph in this Schedule the non-compliance relates.

Limitation of scope

60. The verifier may conclude that the scope of the verification referred to in paragraph 59(3)(b) is too limited in any of the following situations—

(a)data are missing that prevent a verifier from obtaining the evidence required to reduce the verification risk to the level needed to obtain reasonable assurance;

(b)the emissions monitoring plan is not issued by the regulator;

(c)the emissions monitoring plan does not provide sufficient scope or clarity to conclude on the verification;

(d)the maritime operator has failed to make sufficient information available to enable the verifier to carry out the verification.

Independent review

61.—(1) The independent reviewer must review the internal verification documentation and the draft verification report to verify that the verification process has been conducted in accordance with this Part and that due professional care and judgment have been exercised.

(2) The independent reviewer must not have carried out any verification activities that are subject to their review.

(3) The scope of the independent review must encompass the complete verification process laid down in paragraphs 45 to 60 and must include an assessment of whether the evidence gathered is sufficient to enable the verifier to issue a verification report with reasonable assurance.

(4) Where circumstances occur which may cause changes in the verification report after the review, the independent reviewer must also review those changes and the supporting evidence.

(5) After the report has been authenticated in accordance with paragraph 57(h), the verifier must include the results of the independent review in the internal verification documentation.

CHAPTER 3 REQUIREMENTS FOR VERIFIERS

Continued competence process

62.—(1) The verifier must establish, document, implement and maintain a continued competence process to ensure that all personnel entrusted with verification activities are competent for the tasks that are allocated to them.

(2) For the purposes of the competence process referred to in sub-paragraph (1), the verifier must establish, document, implement and maintain the following aspects—

(a)general competence criteria for all personnel undertaking verification activities;

(b)specific competence criteria for each function within the verifier undertaking verification activities, in particular for the UK ETS lead auditor, the UK ETS auditor, the independent reviewer and the technical expert;

(c)a method for ensuring the continued competence and regular evaluation of the performance of all personnel undertaking verification activities;

(d)a process for ensuring ongoing training of the personnel undertaking verification activities;

(e)process for assessing whether the verification engagement falls within the scope of the verifier’s accreditation, and whether the verifier has the competence, personnel and resources required to select the verification team and successfully complete the verification activities within the timeframe required.

(3) In evaluating the competence of the personnel pursuant to sub-paragraph (2)(c), the verifier must assess that competence against the competence criteria referred to in sub-paragraph (2)(a) and (b).

(4) The process referred to in sub-paragraph (2)(e), must also include a process for assessing whether the verification team holds all the competence and personnel required to carry out verification activities for a specific maritime operator.

(5) The verifier must develop general and specific competence criteria which are in conformity with the criteria laid down in paragraphs 63(4), 64, 65 and 66.

(6) The verifier must monitor regularly, and at least annually, the performance of all personnel undertaking verification activities in order to confirm their continued competence.

(7) The verifier must regularly review the continued competence process referred to in sub-paragraph (1) to ensure that—

(a)the competence criteria referred to in paragraph (2)(a) and (b), are developed in accordance with the competence requirements under this Part;

(b)all issues that may be identified related to the setting of the general and specific competence criteria pursuant to paragraph (2)(a) and (b), are addressed;

(c)all the requirements in the competence process are updated and maintained as appropriate.

(8) The verifier must have a system for recording the results of the activities carried out in the competence process referred to in sub-paragraph (1).

(9) A sufficiently competent evaluator must assess the competence and performance of the UK ETS auditor and UK ETS lead auditor.

(10) The competent evaluator must monitor those auditors during the verification of an annual emissions report on the site of the maritime operator as appropriate, to determine whether they meet the competence criteria.

(11) If a member of personnel fails to demonstrate that the competence criteria for a specific task allocated to that member have been fully met, the verifier must identify and organise additional training or supervised work experience. The verifier must monitor that member until the member demonstrates to the verifier that the member meets the competence criteria.

Verification teams

63.—(1) For each particular verification engagement, the verifier must assemble a verification team capable of performing the verification activities referred to in paragraphs 43 to 61.

(2) The verification team must at least consist of a UK ETS lead auditor and, where the verifier’s conclusions during the assessment referred to in paragraph 43(2)(e) and the strategic analysis so require, a suitable number of UK ETS auditors and technical experts.

(3) For the independent review of the verification activities related to a particular verification engagement, the verifier must appoint an independent reviewer who is not part of the verification team.

(4) Team members must have a clear understanding of their specific role in the verification process and must be able to communicate effectively in the language required to perform their verification tasks and to examine the information submitted by the maritime operator.

(5) The verification team must include at least one person with the technical competence and understanding required to assess the specific technical monitoring and reporting aspects related to the maritime activities carried out by the maritime operator.

(6) Where the verification team consists of one person, that person must meet all the competence requirements for the UK ETS auditor and the UK ETS lead auditor and meet the requirements laid down in sub-paragraphs (4) and (5).

Competence requirements for UK ETS auditors and UK ETS lead auditors

64.—(1) UK ETS auditors must have the competence to perform the verification.

(2) For the purpose of sub-paragraph (1), UK ETS auditors must have, at least—

(a)knowledge of this Schedule, relevant standards and applicable guidelines;

(b)knowledge and experience of data and information auditing, including—

(i)data and information auditing methodologies, application of the materiality level and assessing the materiality of misstatements;

(ii)analysing inherent and control risks;

(iii)sampling techniques in relation to data sampling and checking control activities;

(iv)assessing data and information systems, IT systems, data-flow activities, control activities, control systems and procedures for control activities;

(c)the ability to perform the activities related to the verification of an annual emissions report as required by paragraphs 45 to 61.

(3) In addition, sector-specific knowledge and experience of relevant aspects as specified in sub-paragraph (5) must be taken into consideration by verifiers for the purposes of verifying annual emissions reports.

(4) A UK ETS lead auditor must meet the competence requirements for a UK ETS auditor and must have demonstrated competence to lead a verification team and to be responsible for carrying out the verification activities in accordance with this Part.

(5) For the purposes of paragraph (3), knowledge and experience of the following must be taken into consideration—

(a)possible synergies between monitoring and reporting in accordance with this Schedule and existing maritime-specific management systems (including the ISM Code) and other relevant sector-specific guidance (such as guidance on the development of the ship energy efficiency management plan (SEEMP));

(b)emission sources on board each ship;

(c)registration of voyages and procedures ensuring the completeness and accuracy of the list of voyages and of the list of ships (as submitted by the maritime operator);

(d)reliable external sources (including ship-tracking data) that could serve to cross-check information with data from ships;

(e)fuel consumption calculation methods, as applied by ships in practice;

(f)the application of uncertainty levels in accordance with Part 4 and relevant guidance;

(g)the application of emission factors for all fuels and emission sources used on board the ship, and for all maritime emissions covered by this Schedule;

(h)understanding of which fuels are eligible for an emissions reduction claim pursuant to paragraph 37 and which documents are required to support such a claim;

(i)fuel handling, fuel cleaning, tank systems;

(j)ship maintenance and quality control of metering equipment;

(k)bunkering documents, including BDN;

(l)operational logs, voyage abstracts and port abstracts, ship deck logs;

(m)commercial documentation, such as charter party agreements, bills of lading;

(n)existing statutory requirements;

(o)operation of the ship’s bunkering systems;

(p)determination of fuel density by ships in practice;

(q)machinery and technical systems used on board the ship to determine fuel consumption and other relevant information.

Competence requirements for independent reviewers

65.—(1) The independent reviewer must have the appropriate authority to review the draft conclusions on the draft verification report and internal verification documentation pursuant to paragraph 61.

(2) The independent reviewer must meet the competence requirements applying to UK ETS lead auditors, as referred to in paragraph 64(4).

(3) In order to assess whether the internal verification documentation is complete and whether enough evidence has been gathered in the course of the verification activities, the independent reviewer must have the necessary competence to—

(a)analyse the information provided and confirm its completeness and integrity;

(b)challenge missing or contradictory information;

(c)check data trails to assess whether the internal verification documentation is complete and provides sufficient information to support the draft conclusions on the draft verification report and conclusions examined in the internal review.

Use of technical experts

66.—(1) When carrying out verification activities, a verifier may use technical experts to provide detailed knowledge and expertise on a specific subject matter needed to support the UK ETS auditor and UK ETS lead auditor in carrying out their verification activities.

(2) Where the independent reviewer does not have the competence to assess a particular issue in the review process, the verifier must request the support of a technical expert.

(3) The technical expert must have the competence and expertise required to support the UK ETS auditor and the UK ETS lead auditor, or the independent reviewer, where necessary, effectively on the subject matter for which knowledge and expertise of such expert is requested and must also have a sufficient understanding of the issues referred to in paragraph 64.

(4) The technical expert must undertake specified tasks under the direction and full responsibility of the independent reviewer or of the UK ETS lead auditor of the verification team in which the technical expert is operating.

Procedures for verification activities

67.—(1) The verifier must establish, document, implement and maintain one or more procedures and processes for the verification activities described in paragraphs 45 to 61.

(2) When establishing and implementing such procedures and processes, the verifier must carry out the activities in accordance with ISO 14065:2020, in conjunction with ISO/IEC 17029:2019.

(3) The verifier must establish, document, implement and maintain a quality management system to ensure consistent development, implementation, improvement and review of the procedures and processes in accordance with the standard referred to in sub-paragraph (2).

(4) The quality management system referred to in sub-paragraph (3) must include the following—

(a)policies and responsibilities;

(b)management review;

(c)internal audits;

(d)corrective action;

(e)actions to address risk and opportunities and to take preventive action;

(f)control of documented information.

(5) In addition, the verifier must establish the following procedures, processes and arrangements in accordance with the standard referred to in sub-paragraph (2)—

(a)a process and policy for communication with the maritime operator;

(b)adequate arrangements to safeguard the confidentiality of information obtained;

(c)a process for dealing with appeals;

(d)a process for dealing with complaints (including indicative timescale);

(e)a process for issuing a revised verification report where an error in the verification report or annual emissions report is identified after the verifier has submitted the verification report to the maritime operator;

(f)a procedure or process for outsourcing verification activities to other organisations;

(g)a procedure or process to ensure the verifier takes full responsibility for verification activities performed by contracted individuals;

(h)processes ensuring the proper functioning of the quality management system as referred to in sub-paragraph (3), including—

(i)processes for the review of the management system at least once a year, not exceeding 15 months between management reviews;

(ii)processes for conducting internal audits at least once a year, not exceeding 15 months between internal audits;

(iii)processes for identifying and managing non-conformities in the verifier’s activities and taking corrective action to address those non-conformities;

(iv)processes for identifying risks and opportunities in verifier’s activities and taking preventive actions to mitigate those risks;

(v)processes for the control of documented information.

Internal verification documentation

68.—(1) The verifier must prepare and compile internal verification documentation containing at least—

(a)the results of the verification activities performed;

(b)the verification plan, the strategic analysis and the risk analysis;

(c)sufficient information to support the draft verification report, including justifications for judgments as to whether or not misstatements were material.

(2) The internal verification documentation must be drafted in such a way that the independent reviewer referred to in paragraph 61 and the national accreditation body are able to assess whether the verification has been performed in accordance with this Part.

(3) The verifier must, upon request, provide the regulator with access to the internal verification documentation and other relevant information to facilitate an evaluation of the verification by the regulator and the regulator may set a timeframe within which the verifier must provide access to that documentation.

Records and communication

69.—(1) The verifier must maintain and manage records to demonstrate compliance with this Part, including as regards the competence and impartiality of their personnel.

(2) The verifier must, on a regular basis, make information available to the maritime operator in accordance with the standard referred to in paragraph 67(2).

(3) The verifier must safeguard the confidentiality of information obtained in the course of the verification, in accordance with the standard referred to in paragraph 67(2).

Impartiality and independence

70.—(1) The verifier must be independent from the maritime operator and impartial in carrying out its verification activities.

(2) To ensure independence and impartiality, the verifier and any part of the same legal entity must not be a maritime operator, the owner of such a maritime operator or owned by such a maritime operator, and must not have relations with the maritime operator that could affect its independence and impartiality.

(3) The verifier must also be independent from bodies that trade emission allowances under the UK ETS.

(4) The verifier must be organised in such a way as to safeguard their objectivity, independence and impartiality. For the purposes of this Part, the relevant requirements laid down in the standard referred to in paragraph 67(2) apply.

(5) The verifier must—

(a)not carry out verification activities for a maritime operator that poses an unacceptable risk to their impartiality or in respect of which they have a conflict of interests;

(b)not use personnel or contracted persons in the verification of an annual emissions report that involves an actual or potential conflict of interest;

(c)ensure that the activities of personnel or organisations do not affect the confidentiality, objectivity, independence and impartiality of the verification and must, for this purpose, monitor the risks to impartiality and take appropriate action to address those risks.

(6) For the purpose of sub-paragraph (5), the verifier must monitor the risks to impartiality and take appropriate actions to address those risks.

(7) An unacceptable risk to impartiality or a conflict of interests will be considered to have arisen, in particular, where a verifier, or any part of the same legal entity, provides—

(a)consulting services to develop part of the monitoring and reporting process described in the emissions monitoring plan, including development of the monitoring methodology, drafting of the annual emissions report and drafting of the emissions monitoring plan;

(b)technical assistance to develop or maintain the system for monitoring and reporting emissions or other relevant information under this Schedule.

(8) A conflict of interest for a verifier in the relations between it and the maritime operator will be considered to have arisen in particular in either of the following cases—

(a)where the relationship between the verifier and the maritime operator is based on common ownership, common governance, common management or personnel, shared resources, common finances and common contracts or marketing;

(b)where the maritime operator has received consulting services referred to in sub-paragraph (7)(a), or technical assistance referred to in sub-paragraph (7)(b), from a consultancy body, technical assistance body or another organisation having relations with the verifier and threatening the impartiality of the verifier.

(9) For the purposes of sub-paragraph (8)(b), the verifier’s impartiality will be considered compromised where the relations between the verifier and the consultancy body, technical assistance body or the other organisation are based on common ownership, common governance, common management or personnel, shared resources, common finances, common contracts or marketing and common payment of sales commission or other inducement for the referral of new clients.

(10) The verifier must not outsource the independent review or the issuance of the verification reports.

(11) Where the verifier outsources other verification activities, they must meet the relevant requirements laid down in the standard referred to in paragraph 67(2).

(12) For the purposes of sub-paragraph (11), contracting individuals to carry out verification activities will not constitute outsourcing if the verifier, when contracting those persons, takes full responsibility for the verification activities performed by contracted personnel. When contracting individuals for carrying out verification activities, the verifier must require those individuals to sign a written agreement that they comply with the procedures of the verifier and that there is no conflict of interest in carrying out those verification activities.

(13) The verifier must establish, document, implement and maintain a process to ensure their continuous impartiality and independence, and those of the parts of the same legal entity, of other organisations referred to in sub-paragraphs (8) and (9), and of all personnel and contracted persons involved in the verification. That process must include a mechanism to safeguard the impartiality and independence of the verifier and meet the relevant requirements laid down in the standard referred to in paragraph 67(2).

(14) When verifying the same maritime operator as in the previous year, the verifier must assess the risk to impartiality and take measures to reduce the risk to impartiality.

(15) If the UK ETS lead auditor undertakes annual verifications of annual emissions reports for a period of six consecutive years for a given maritime operator, the UK ETS lead auditor must take a three consecutive years’ break from providing verification of annual emissions reports for that same maritime operator.

CHAPTER 4 ACCREDITATION OF VERIFIERS

Accreditation of verifiers

71.—(1) Where no specific provisions concerning the accreditation of verifiers are laid down in this Part the relevant provisions of Regulation (EC) No 765/2008 apply.

(2) With respect to the minimum requirements for accreditation and the requirements for accreditation bodies, the standard pursuant to ISO/IEC 17011:2017 concerning general requirements for accreditation bodies accrediting conformity assessment bodies apply.

Scope of accreditation

72. The scope of accreditation of verifiers must cover the verification of annual emissions reports in accordance with this Part.

Objectives of the accreditation process

73. In the course of the accreditation process and of the annual surveillance of accredited verifiers, in accordance with paragraphs 75 to 80, the national accreditation body must assess whether the verifier and its personnel undertaking verification activities—

(a)have the competence to verify annual emissions reports in accordance with this Part;

(b)are in fact verifying annual emissions reports in accordance with this Part;

(c)meet the requirements for verifiers referred to in paragraphs 62 to 70, including those regarding impartiality and independence.

Requests for accreditation

74.—(1) Requests for accreditation must contain the information required on the basis of the standard referred to in paragraph 71(2).

(2) In addition, prior to the start of the assessment referred to in paragraph 75, the verifier applying for accreditation (‘the applicant’) must make available to the national accreditation body information on the following aspects—

(a)the procedures and processes referred to in paragraph 67(1) and the quality management system referred to in paragraph 67(3);

(b)the competence criteria referred to in paragraph 62(2)(a) and (b), the results of the continuous competence process referred to in that paragraph and other relevant documentation on the competence of all personnel involved in verification activities as referred to in paragraphs 64 and 65;

(c)the process for ensuring continuous impartiality and independence, as referred to in paragraph 70(13), including relevant records on the impartiality and independence of the applicant and its personnel;

(d)the technical experts and key personnel involved in the verification of annual emissions reports;

(e)the procedures and processes for ensuring appropriate verification, including those concerning the internal verification documentation referred to in paragraph 68;

(f)records, as referred to in paragraph 69;

(g)all other information requested by the national accreditation body.

Assessment

75.—(1) For the purposes of the assessment referred to in paragraph 73, the assessment team appointed in accordance with paragraph 83 must, at least—

(a)review all relevant documents and records supplied by the applicant pursuant to paragraph 74;

(b)carry out an on-site visit to review a representative sample of the internal verification documentation and assess the implementation of the applicant’s quality management system and the procedures or processes for verification activities referred to in paragraph 67;

(c)witness the performance and competence of a representative number of the applicant’s staff involved verifying annual emissions reports to ensure that they operate in accordance with this Part.

(2) The assessment team must carry out the activities outlined in sub-paragraph (1) in compliance with the requirements of the standard referred to in paragraph 71(2).

(3) The assessment team must report its findings and any non-conformities to the applicant and request a response, in accordance with the requirements of the standard referred to in paragraph 71(2).

(4) The applicant must take corrective action to address any non-conformities reported pursuant to sub-paragraph (3) and submit a response with an indication of what action it has taken, or plans to take within a time set by the national accreditation body, to resolve them.

(5) The national accreditation body must review the response that the applicant submits pursuant to sub-paragraph (4).

(6) Where the national accreditation body finds the applicant’s response or the action taken to be insufficient or ineffective, it must ask the applicant to submit further information or take further action.

(7) The national accreditation body may also request evidence of, or carry out a follow-up assessment to assess, the actual implementation of the corrective action.

Decision on accreditation and accreditation certificate

76.—(1) When preparing and taking the decision on whether to grant, extend or renew the accreditation of an applicant, the national accreditation body must take into account the requirements of the standard referred to in paragraph 71(2).

(2) Where the national accreditation body has decided to grant or renew an applicant’s accreditation, it must issue an accreditation certificate to that effect.

(3) The accreditation certificate must contain at least the information required on the basis of the standard referred to in paragraph 71(2).

(4) The accreditation certificate will be valid for a period not exceeding five years after the date on which the national accreditation body has issued that certificate.

Annual surveillance

77.—(1) The national accreditation body must carry out annual surveillance of each verifier to which it has issued an accreditation certificate.

(2) The surveillance referred to in sub-paragraph (1) must comprise, at least—

(a)an on-site visit as referred to in paragraph 75(1)(b);

(b)witnessing the performance and assessing the competence of a representative number of the verifier’s staff in accordance with paragraph 75(1)(c);

(2) The national accreditation body must carry out the first surveillance of a verifier in accordance with sub-paragraph (1) within 12 months of the date on which its accreditation certificate was issued.

(3) The surveillance planning must allow the national accreditation body to assess representative samples of the verifier’s activities within the scope of the accreditation certificate and of the staff involved in the verification activities, in accordance with the requirements of the standard referred to in paragraph 71(2).

(4) Where a verifier carries out verification in another country, the national accreditation body that has accredited the verifier may ask the national accreditation body of that other country to carry out surveillance activities on its behalf and under its responsibility.

Reassessment

78.—(1) Before the expiry of an accreditation certificate which it has issued, the national accreditation body must reassess the verifier in question to determine whether the validity of the certificate can be extended.

(2) The reassessment planning must ensure that the national accreditation body assesses a representative sample of the verifier’s activities covered by the certificate.

(3) In planning and carrying out the reassessment, the national accreditation body must satisfy the requirements of the standard referred to in paragraph 71(2).

Extraordinary assessment

79.—(1) The national accreditation body may conduct an extraordinary assessment of the verifier at any time to ensure that it continues to meet the requirements of this Part.

(2) In order to enable the national accreditation body to assess the need for an extraordinary assessment, the verifier must inform that body without delay of any significant changes relevant to its accreditation concerning any aspect of its status or operation, including changes mentioned in the standard referred to in paragraph 71(2).

Administrative measures

80.—(1) The national accreditation body may suspend, withdraw or reduce the scope of an accreditation of a verifier where the verifier does not meet the requirements of this Part.

(2) The national accreditation body must suspend, withdraw or reduce the scope of an accreditation of a verifier where the verifier so requests.

(3) The national accreditation body must establish, document, implement and maintain a procedure for the suspension, withdrawal and reduction of scope of the accreditation in line with the standard referred to in paragraph 71(2).

(4) The national accreditation body must suspend a verifier’s accreditation, or reduce the scope of an accreditation where the verifier has—

(a)committed a serious breach of the requirements of this Part;

(b)persistently and repeatedly failed to meet the requirements of this Part;

(c)breached any other specific terms and conditions laid down by the national accreditation body.

(5) The national accreditation body must withdraw a verifier’s accreditation where—

(a)the verifier has failed to remedy the grounds for a decision to suspend the accreditation certificate;

(b)a member of the top management of the verifier or a verifier’s staff involved in verification activities under this Part has been found guilty of fraud;

(c)the verifier has intentionally provided false information or has intentionally concealed information.

(6) Decisions of a national accreditation body to suspend, withdraw or reduce the scope of an accreditation in accordance with sub-paragraphs (1), (4) and (5) are subject to appeal in accordance with the procedures established by the national accreditation body for the resolution of appeals.

(7) Decisions of a national accreditation body to suspend, withdraw or reduce the scope of the accreditation take effect upon being notified to the verifier. The national accreditation body must consider the impact on activities carried out prior to those decisions in the light of the nature of the non-compliance.

(8) The national accreditation body must terminate the suspension of an accreditation certificate where it has received satisfactory information and concludes that the verifier meets the requirements of this Part.

CHAPTER 5 REQUIREMENTS FOR THE NATIONAL ACCREDITATION BODY

Requirements for national accreditation bodies

81.—(1) The tasks related to accreditation pursuant to this Part must be carried out by the national accreditation body.

(2) For the purposes of this Part, the national accreditation body must carry out their functions in accordance with the requirements of the standard referred to in paragraph 71(2).

Independence and impartiality

82.—(1) The national accreditation body must be organised in a manner that guarantees its full independence from verifiers it assesses and its impartiality in carrying out its accreditation activities.

(2) For the purpose of sub-paragraph (1), the national accreditation body must not—

(a)offer or provide any activities or services provided by a verifier;

(b)provide consultancy services, own shares in or otherwise have a financial or managerial interest in a verifier.

(3) Without prejudice to paragraph 81(2), the structure, responsibilities and tasks of the national accreditation body must be clearly distinguished from those of the regulator and those of other national authorities.

(4) The national accreditation body must take all final decisions pertaining to the accreditation of verifiers but may sub-contract certain activities, subject to the requirements set out in the standard referred to in paragraph 71(2).

Assessment team

83.—(1) The national accreditation body must appoint an assessment team for each assessment carried out under the requirements of the standard referred to in paragraph 71(2).

(2) An assessment team must consist of a lead assessor responsible for carrying out an assessment in accordance with this Part and, where necessary, a suitable number of assessors or technical experts with relevant knowledge and experience for the specific scope of accreditation.

(3) An assessment team must include, at least, one person with the following skills—

(a)sufficient knowledge of this Schedule;

(b)competence and understanding required to assess the verification activities referred to in paragraph 45 to 61 and sufficient knowledge of the characteristics of the various types of vessels and of monitoring and reporting of maritime emissions, fuel consumption and other relevant information pursuant to this Schedule.

Competence requirements for assessors

84.—(1) Assessors must have the competence to carry out the activities under paragraphs 75 to 80. To that end, the assessor must—

(a)meet the requirements of the standard referred to in paragraph 71(2);

(b)have sufficient knowledge of data and information auditing, as referred to in paragraph 64(2)(b), obtained through training or access to a person who has knowledge and experience of such data and information;

(c)have sufficient knowledge of this Schedule as well as applicable guidelines as referred to in paragraph 64(2)(a).

(2) In addition to the competence requirements set out in sub-paragraph (1), lead assessors must demonstrate competence to lead an assessment team and be responsible for carrying out an assessment in accordance with this Part.

(3) In addition to the competence requirements set out in sub-paragraph (1), internal reviewers and persons taking decisions on the granting, extending or renewing of an accreditation must have sufficient knowledge and experience to evaluate the accreditation.

Technical experts

85.—(1) The national accreditation body may include technical experts in the assessment team to provide detailed knowledge and expertise on a specific subject matter needed to support the lead assessor or assessor.

(2) A technical expert must have—

(a)the competence required to support the lead assessor and assessor effectively on the subject matter for which knowledge and expertise of such expert is requested;

(b)sufficient knowledge of this Schedule as well as applicable guidelines as referred to in paragraph 64(2)(a).

(c)a sufficient understanding of verification activities.

(3) Technical experts must undertake specified tasks under the direction and full responsibility of the lead assessor of the assessment team in question.

Complaints

86. Where the national accreditation body has received a complaint concerning the verifier from the regulator, the maritime operator, or other interested parties, the national accreditation body must, within a reasonable time but no later than three months from the date of its receipt—

(a)decide on the validity of the complaint;

(b)ensure that the verifier concerned is given the opportunity to submit its observations;

(c)take appropriate actions to address the complaint;

(d)record the complaint and action taken;

(e)respond to the complainant.

Records and documentation

87.—(1) The national accreditation body must keep records on each person involved in the accreditation process. Those records must include records related to relevant qualifications, training, experience, impartiality and competence necessary to demonstrate compliance with this Part.

(2) The national accreditation body must keep records of the verifier in line with the standard referred to in paragraph 71(2).

Access to information and confidentiality

88.—(1) The national accreditation body must, on a regular basis, make publicly available and update information about the national accreditation body and its accreditation activities.

(2) The national accreditation body must make, in accordance with point 4 of Article 8 of Regulation (EC) No 765/2008, adequate arrangements to safeguard, as appropriate, the confidentiality of information obtained.

CHAPTER 6 INFORMATION EXCHANGE

Information exchange and focal points

89.—(1) The UK ETS authority must establish an effective exchange of appropriate information and effective cooperation between the national accreditation body and the regulator.

(2) The Environment Agency or such other regulator as may be designated by the UK ETS authority from time to time is to be the focal point for the exchange of information, for the purpose of this Chapter for coordinating the cooperation referred to in sub-paragraph (1), and for the activities referred to in this Chapter.

Accreditation work programme and management report

90.—(1) By 31st December of each year, the national accreditation body must make available an accreditation work programme to the regulator containing the list of verifiers accredited by the national accreditation body. The accreditation work programme must contain the following information in relation to each verifier—

(a)information on activities that the national accreditation body has planned for that verifier, including surveillance and reassessment activities;

(b)dates of anticipated witnessing audits to be performed by the national accreditation body to assess the verifier;

(c)information on whether the national accreditation body has requested the national accreditation body from another country to carry out surveillance activities pursuant to paragraph 77(4).

(2) Where changes occur in the information referred to in sub-paragraph (1), the national accreditation body must submit to the regulator an updated work programme by 31st January of each year.

(3) Following the submission of the accreditation work programme in accordance with sub-paragraph (1), the regulator must provide the national accreditation body with any relevant information, including any applicable national legislation and guidelines.

(4) By 1st June of each year, the national accreditation body must make available a management report to the regulator which must contain the following information in relation to each verifier that has been accredited by the national accreditation body—

(a)accreditation details of verifiers that were newly accredited by the national accreditation body;

(b)summarised results of surveillance and reassessment activities carried out by the national accreditation body;

(c)summarised results of extraordinary assessments that have taken place, including reasons for initiating such extraordinary assessments;

(d)any complaints filed against the verifier since the last management report and the actions taken by the national accreditation body;

(e)details of action taken by the national accreditation body in response to the information that is shared by the regulator.

Information exchange on administrative measures

91. If the national accreditation body has imposed administrative measures on the verifier pursuant to paragraph 80 or if a suspension of the accreditation has been terminated or a decision on appeal has reversed the decision of the national accreditation body to impose administrative measures referred to in paragraph 80, the national accreditation body must inform the regulator.

Information exchange by the regulator in respect of a maritime operator

92.—(1) The regulator must annually communicate to the national accreditation body at least the following—

(a)relevant results from checking the annual emissions reports and the verification reports, in particular of any issue of reported data that did not fulfil the requirements under this Part;

(b)results from the inspection of the maritime operator where those results are relevant for the national accreditation body concerning the verifier’s accreditation and surveillance or where those results include any identified issue of data that did not fulfil the requirements under this Part;

(c)results from the evaluation of the internal verification documentation of that verifier where the regulator has evaluated the internal verification documentation pursuant to paragraph 68(3);

(d)complaints received by the regulator concerning that verifier.

(2) Where the information referred to in sub-paragraph (1) provides evidence that the regulator has identified issues in the reported data that did not fulfil the requirements under this Part, the national accreditation body must treat the communication of that information as a complaint by the regulator concerning that verifier within the meaning of paragraph 86.

(3) The national accreditation body must take appropriate action to address such information and respond to the regulator within a reasonable time, but no later than three months from the date of its receipt.

(4) In responding to the regulator pursuant to sub-paragraph (3), the national accreditation body must inform the regulator of the action taken by it and, where relevant, the administrative measures imposed on the verifier.

Databases of accredited verifiers

93. The national accreditation body must set up and manage a database which must be publicly available and contain the following information—

(a)the name, accreditation number and business address of each verifier accredited by that national accreditation body;

(b)each verifier’s scope of accreditation;

(c)the date on which the accreditation was granted and its expiry date;

(d)information on administrative measures imposed on the verifier.

Notification by verifiers

94.—(1) For the purposes of enabling the national accreditation body to draft the accreditation work programme and the management report referred to in paragraph 90, a verifier must, by 15th November of each year, send the following information to the national accreditation body—

(a)the planned time and place of the verifications that the verifier is scheduled to perform;

(b)the business address and contact details of the maritime operators whose annual emissions reports are subject to its verification;

(c)the names of the members of the verification team and the scope of the verification under which the maritime activity falls.

(2) Where changes occur in the information referred to in sub-paragraph (1), the verifier must notify those changes to the national accreditation body within a timeframe agreed with the national accreditation body.

PART 9 DETERMINATION OF VALUES FOR EMISSION FACTORS UNDER PARAGRAPH 36(4)

Emission factors based on analyses

95.—(1) The maritime operator must ensure that any analyses, sampling, calibrations and validations for the determination of emission factors are carried out by applying methods based on corresponding EN standards.

(2) Where EN standards are not available, the methods must be based on suitable ISO standards or national standards.

(3) Where no applicable published standards exist, suitable draft standards, industry best-practice guidelines or other scientifically proven methodologies must be used, limiting sampling and measurement bias.

(4) The result of any analysis must be used only for the delivery period or batch of fuel for which the samples have been taken, and for which the samples were intended to be representative.

(5) When determining a specific parameter, the maritime operator must use the results of all analyses made with regard to that parameter.

Sampling plan

96.—(1) Where emission factors are determined by analyses, the maritime operator must submit to the regulator for approval, for each fuel a sampling plan in the form of a written procedure, which contains information on methodologies for the preparation of samples, including information on responsibilities, locations, frequencies and quantities, and methodologies for the storage and transport of samples.

(2) The maritime operator must ensure that the derived samples are representative for the relevant batch or delivery period and free of bias.

(3) Relevant elements of the sampling plan must be agreed with the laboratory carrying out the analysis for the respective fuel, and evidence of that agreement must be included in the plan.

(4) The maritime operator must make the plan available for the purposes of verification pursuant to Part 8.

(5) The maritime operator must, in agreement with the laboratory carrying out the analysis for the respective fuel and subject to the approval of the regulator, adapt the elements of the sampling plan where analytical results indicate that the heterogeneity of the fuel significantly differs from the information on heterogeneity on which the original sampling plan for that specific fuel was based.

Use of laboratories

97.—(1) The maritime operator must ensure that laboratories used to carry out analyses for the determination of emission factors are accredited in accordance with EN ISO/IEC 17025, as updated from time to time, for the relevant analytical methods.

(2) Laboratories not accredited in accordance with EN ISO/IEC 17025 may be used for the determination of emission factors only where the maritime operator can demonstrate to the satisfaction of the regulator that access to laboratories referred to in sub-paragraph (1) is technically not feasible or would incur unreasonable costs, and that the non-accredited laboratory meets requirements equivalent to EN ISO/IEC 17025.

(3) The regulator must deem a laboratory to meet requirements equivalent to EN ISO/IEC 17025 within the meaning of sub-paragraph (2) where the maritime operator provides, to the extent feasible, evidence in accordance with sub-paragraphs (4) and (5).

(4) With respect to quality management, the maritime operator must produce an accredited certification of the laboratory in conformity with EN ISO/IEC 9001, as updated from time to time, or other certified quality management systems that cover the laboratory. In the absence of such certified quality management systems, the maritime operator must provide other appropriate evidence that the laboratory is capable of managing its personnel, procedures, documents and tasks in a reliable manner.

(5) With respect to technical competence, the maritime operator must provide evidence that the laboratory is competent and able to generate technically valid results using the relevant analytical procedures. Such evidence must cover at least the following elements—

(a)management of the personnel’s competence for the specific tasks assigned;

(b)suitability of accommodation and environmental conditions;

(c)selection of analytical methods and relevant standards;

(d)where applicable, management of sampling and sample preparation, including control of sample integrity;

(e)where applicable, development and validation of new analytical methods or application of methods not covered by international or national standards;

(f)uncertainty estimation;

(g)management of equipment, including procedures for calibration, adjustment, maintenance and repair of equipment, and record keeping thereof;

(h)management and control of data, documents and software;

(i)management of calibration items and reference materials;

(j)quality assurance for calibration and test results, including regular participation in proficiency testing schemes, applying analytical methods to certified reference materials, or inter-comparison with an accredited laboratory;

(k)management of outsourced processes;

(l)management of assignments, customer complaints, and ensuring timely corrective action.

Frequencies for analyses

98.—(1) The maritime operator must apply the minimum frequencies for analyses for relevant fuels, as set out in Table C3.

Table C3

Fuel	Minimum frequency of analysis
Other gases	At least daily — using appropriate procedures at different parts of the day
Other fuels	Every 10 000 tonnes of fuel and at least four times a year

(2) The regulator may allow the maritime operator to use a frequency that differs from those referred to in sub-paragraph (1), where minimum frequencies are not available or where the maritime operator demonstrates that using the required frequency would incur unreasonable costs.^F312]

Article 15

SCHEDULE 3 Applications, notices, etc.

PART 1 Applications, notices, etc. submitted to regulators

Submission of applications, notices, etc. to regulators_I84

1.—(1) This paragraph applies to an application, notice or report submitted to a regulator under—

(a)this Order;

[^F313 (aa)the Monitoring and Reporting Regulation 2018;

(ab)the Verification Regulation 2018;

(ac)the Free Allocation Regulation;

(ad)the Activity Level Changes Regulation;^F313]

(b)a permit;

(c)an emissions monitoring plan.

(2) An application, notice or report—

(a)must be in writing; and

(b)unless the regulator agrees otherwise in writing, must be made on a form provided by the regulator for that purpose.

(3) The regulator must set out in the form—

(a)the information required by the regulator to determine the application; or

(b)the matters required to be included in the notice or report.

(4) Unless the regulator agrees otherwise in writing—

(a)the form must be submitted to the regulator electronically and, if the form specifies an email address for submission, to that address;

(b)if the form is provided by the regulator for submission through a website, the form must be submitted through the website and in accordance with any instructions given for completion and submission.

(5) Unless the information has been provided in a previous application made to the regulator[^F314 (including an application under GGETSR 2012)^F314] , an application must set out—

(a)the name, postal address (including postcode) and telephone number of the applicant;

(b)either—

(i)an email address for service; or

(ii)a postal address (including postcode) in the United Kingdom for service.

(6) In the case of an application under paragraph 7 of Schedule 6 (transfer of permits), sub-paragraph (5) applies to both the transferring operator and the new operator referred to in that paragraph.

(7) Subject to sub-paragraphs (8) and (9), an application must be accompanied by the charge for the application set out in the charging scheme published under article 36.

(8) Where an application is submitted electronically, the charge may be sent to the regulator separately from the application; and in that case, for the purposes of this Order, the application must be treated as not being received by the regulator until the charge is also received.

(9) Where an application is made to the Secretary of State (including an application submitted electronically), the charge need not be paid until the end of the period of 28 days beginning with the date on which the Secretary of State gives notice to the applicant requesting payment of the charge.

(10) An application may be withdrawn at any time before it is determined.

(11) The regulator may, by notice to a person submitting an application, require the applicant to provide such further information specified in the notice, within the period so specified, [^F315as may be required^F315] to determine the application.

(12) For the purposes of this Order, the application must be treated as being withdrawn if—

(a)the applicant fails to provide that information before the end of that period (or on or before such later date as may be agreed with the regulator); and

(b)the regulator gives notice to the applicant that the application is treated as having been withdrawn.

(13) For the purposes of this paragraph, “ application ” includes any proposed plan required to be submitted with the application.

Determination of applications by regulators_I85

2.—(1) Where an application under this Order is made to a regulator in accordance with the requirements of this Order, the application must be determined by the regulator within—

(a)the period of 2 months beginning with the date on which the application is received; or

(b)such longer period as may be agreed in writing with the applicant.

(2) For the purposes of sub-paragraph (1)—

(a)an application is determined when notice of the determination is given to the applicant by the regulator;

(b)in calculating the period of 2 months, no account must be taken of any period beginning with the date on which a notice under paragraph 1(11) is given to the applicant and ending with the date on which the applicant provides the information specified in the notice.

(3) Where the regulator fails to determine an application before the end of the period referred to in sub-paragraph (1)—

(a)the applicant may give to the regulator notice that the applicant treats the application as having been refused; and

(b)if such notice is given, for the purposes of this Order, the application must be treated as having been refused at the end of that period.

(4) Where the application is an application for a permit or for the transfer of a permit, any permit that is issued or transferred as a result of the application must be attached to the notice under sub-paragraph (2)(a).

(5) This paragraph does not apply to an application under—

[^F316 (za)article 34L (application for aviation free allocation entitlement);

(zb)article 34Q (application for transfer of aviation free allocation entitlement);^F316]

(a)^F317paragraph 5 of Schedule 7 (obtaining hospital or small emitter status for 2026-2030 ... period);

(b)^F318paragraph 3 of Schedule 8 (obtaining ultra-small emitter status for 2026-2030 ... period).

PART 2 Notices, etc. given by regulators, national authorities [^F319, UK ETS authority or registry administrator^F319]

Service of notices, etc._I86

3.—(1) This paragraph applies to a notice or direction that must or may be given under this Order by—

(a)a regulator;

(b)a national authority;

(c)the UK ETS authority.

[^F320 (d)the registry administrator.^F320]

(2) A notice or direction must be in writing.

(3) A notice or direction may be given to a person in any of the following ways—

(a)by delivering it to the person;

(b)by sending it to a postal or email address provided by the person for the purpose of the service of notices or directions [^F321(including an address provided under GGETSR 2012)^F321] ;

(c)by leaving it at the person's proper address;

(d)by sending it by post or electronic means to the person's proper address;

(e)if the person is a body corporate, by giving it to the secretary or clerk of the body in accordance with any of sub-paragraphs (a) to (d);

(f)if the person is a partnership, by giving it to a partner or a person having the control or management of the partnership business in accordance with any of sub-paragraphs (a) to (d).

[^F322 (3A) A notice may be given by the registry administrator to a person who holds an account—

(a)in any of the ways set out in paragraph (3);

(b)by sending it by electronic means in the registry.^F322]

(4) In this paragraph, “ proper address ” means—

(a)in the case of a body corporate—

(i)the registered or principal office of the body; or

(ii)the email address of the secretary or clerk of the body;

(b)in the case of a partnership—

(i)the principal office of the partnership; or

(ii)the email address of the partner or person having control or management of the partnership business;

(c)in any other case, the person's last known address (including an email address).

(5) For the purposes of sub-paragraph (4), where a body corporate registered outside the United Kingdom or a partnership established outside the United Kingdom has an office in the United Kingdom, the principal office of the body corporate or partnership is its principal office in the United Kingdom.

(6) For the purposes of sub-paragraph (4)(c), where the person is an aircraft operator, the proper address includes an address derived from information supplied by Eurocontrol.

[^F323 (7) In this paragraph and paragraph 4, a reference to this Order includes a reference to the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation and the Activity Level Changes Regulation.^F323]

Service on certain Crown operators_I87

4.—(1) This paragraph applies in relation to an installation operated by a person acting on behalf of—

(a)the Royal Household;

(b)the Duchy of Lancaster; or

(c)the Duke of Cornwall or other possessor of the Duchy of Cornwall.

(2) In relation to the giving of notices or directions under this Order, the following person must be treated as the operator—

(a)in relation to sub-paragraph (1)(a), the Keeper of the Privy Purse;

(b)in relation to sub-paragraph (1)(b), the person appointed by the Chancellor of the Duchy of Lancaster for that purpose;

(c)in relation to sub-paragraph (1)(c), the person appointed by the Duke of Cornwall or other possessor of the Duchy of Cornwall for that purpose.

Article 24

SCHEDULE 4 Modifications to [^F324Monitoring and Reporting Regulation 2018^F324] _I88_,_I89_,_I90_,_I91_,_I92_,_I93_,_I94_,_I95_,_I96_,_I97_,_I98_,_I99_,_I100_,_I101_,_I102_,_I103_,_I104_,_I105_,_I106_,_I107_,_I108_,_I109_,_I110_,_I111_,_I112_,_I113_,_I114

1.[^F325 The Monitoring and Reporting Regulation 2018^F325] is to be read as if—

(a) for “competent authority” in each place it occurs there were substituted “ regulator ” ;

[^F326 (aa) for “greenhouse gas emissions permit” in each place there were substituted “ permit ” ; ^F326]

(b) Articles 10, 52, 57, 70, 74, 75, 76 and 77 were omitted; and

(c) the words “This Regulation shall be binding in its entirety and directly applicable in all Member States”, immediately following Article 78, were omitted,

and subject to the following additional modifications.

2. Article 1 is to be read as if for the words from “pursuant to” to the end there were substituted “ for the purposes of the 2020 Order ” .

3. Article 2 is to be read as if for the words from “greenhouse gas emissions” to the end of the first subparagraph there were substituted “ specified emissions (as defined in the 2020 Order) from regulated activities, activity data from installations, CO ₂ emissions from aviation activity and tonne-kilometre data from aviation activity ” .

4. Article 3 is to be read as if—

(a) in the words before point (1), for “the following definitions” there were substituted “ except where the context otherwise requires, terms defined in the Greenhouse Gas Emissions Trading Scheme Order 2020 have the meanings given by that Order and the following additional definitions ” ;

(b) before point (1), there were inserted—

“(A1) ‘greenhouse gas emissions’ and ‘emissions’ mean specified emissions (as defined in the 2020 Order) from regulated activities or CO₂emissions from aviation activity;”;

“(2) ‘trading period’, in references to the trading period immediately preceding the first trading period of the UK ETS, means the period beginning with 1st January 2013 and ending with 31st December 2020;”;

(d) after point (2), there were inserted—

“(2a) ‘the 2020 Order’ means the Greenhouse Gas Emissions Trading Scheme Order 2020;”;

[^F327 (e) after point (5), there were inserted—

“(5a) ‘Implementing Regulation (EU) 2018/2067’ or ‘Commission Implementing Regulation (EU) 2018/2067’ means the Verification Regulation 2018 (as defined in the 2020 Order);

(5b) ‘monitoring plan’ in relation to an aircraft operator, except in Articles 11 to 13 of this Regulation, means the aircraft operator's emissions monitoring plan as defined in article 4 of the 2020 Order;”;^F327]

(f) in point (12), the words from “or, for tonne-kilometre data” to the end were omitted;

(g) point (18) were omitted;

(h) in point (28), for “Annex II to Directive 2003/87/EC ” substitute “ column 2 of table C in Schedule 2 to the 2020 Order ” ;

(i) in point (44) “, or equivalent applicable international rules” were omitted;

(j) in each of points (46) and (47), “listed in Annex I to Directive 2003/87/EC ” were omitted;

(k) point (50) were omitted;

(l) in each of points (54) and (55), for “under Directive 2009/31/EC ” there were substituted “ in accordance with the CCS licensing regime ” ;

(m) after point (55), there were inserted—

“(55a) ‘the CCS licensing regime’ means Chapter 3 of Part 1 of the Energy Act 2008 ^M38 and other domestic legislation which immediately before IP completion day implemented Directive 2009/31/EC ^M39;”.

5. Article 4 is to be read as if for “under Directive 2003/87/EC ” there were substituted “ for the purposes of the Greenhouse Gas Emissions Trading Scheme Order 2020 ” .

6. Article 5 is to be read as if for the words from “activities listed” to “that Directive” there were substituted “ regulated activities and aviation activity ” .

7. Article 9 is to be read as if for “Article 15 of Directive 2003/87/EC ” there were substituted “ Commission Implementing Regulation (EU) No 2018/2067 ” .

[^F328 8. Article 12 is to be read as if—

(a) paragraph 3 were omitted;

(b) after paragraph 2 there were inserted—

“4. Where the operator of an installation has submitted a monitoring plan to the regulator, the regulator must, by notice to the operator:

(a)if the plan is in accordance with this Regulation, approve it; or

(b)reject it.

(See articles 28 to 30 of the 2020 Order in relation to the submission of a monitoring plan by an aircraft operator.)”.^F328]

9. Article 13 is to be read as if—

(a) for paragraph 1 there were substituted—

“1. Subject in each case to the approval of the regulator, operators and aircraft operators may use standardised or simplified monitoring plans that conform to templates published by the regulator.”;

(b) in paragraph 2, for “Member States” there were substituted “ The regulator ” .

10. Article 14(1) is to be read as if “in accordance with Article 7 of Directive 2003/87/EC ” were omitted.

11. Article 15 is to be read as if—

[^F329 (za) for paragraph 1 there were substituted—

“1. The operator or aircraft operator must notify the regulator of:

(a)any significant modification (within the meaning of paragraph 3) of the monitoring plan at least 14 days before making the modification or, where this is not possible, as soon as reasonably practicable; and

(b)any other modification of the monitoring plan on or before 31 December in the year in which the modification is made.”;^F329]

(a) in paragraph 3—

(i) in point (g), for “or de minimis ” there were substituted “ , de minimis or marginal ” ;

(ii) point (h) were omitted.

(b) in paragraph 4—

(i) in point (a)(ii), for “calculation methods as laid down in Annex III” there were substituted “ the calculation methods referred to in Article 53(2) ” ;

(ii) in point (a)(iv), for “Article 28a(6) of Directive 2003/87/EC ” there were substituted “ article 33(2) of the 2020 Order ” .

12. Article 16(1) is to be read as if for the words from “shall carry out” to the end there were substituted “ must use, in parallel, both the modified and the original monitoring plan to carry out all monitoring and reporting, according to both plans, and must keep the results of both monitoring approaches in their records ” .

13. Article 18 is to be read as if—

(a) in paragraph 1, for “EUR 20” there were substituted “ £20 ” ;

(b) in paragraph 3(c)—

(i) for “Member State” there were substituted “ United Kingdom ” ;

(ii) after “adopted”, there were inserted “ before IP completion day ” ;

(i) for “EUR 2000” there were substituted “ £2000 ” ;

(ii) for “EUR 500” there were substituted “ £500 ” .

14. Article 19(3) is to be read as if—

(a) after point (b) there were inserted—

“(ba)marginal source streams, where the source streams selected by the operator jointly account for less than 10 tonnes of fossil CO₂ per year;”;

[^F330 (aa) in point (c) for “points (a) and (b)” there were substituted “points (a), (b) and (ba)” ; ^F330]

(b) in the final subparagraph, for “or a de minimis source stream” there were substituted “ , a de minimis source stream or a marginal source stream ” .

15. Article 20 is to be read as if—

(a) in paragraph 1, in the second subparagraph—

(i) after “belonging to” there were inserted “ regulated ” ;

(ii) the words from “and listed in” to the end were omitted;

(b) in paragraph 3—

(i) in the first subparagraph, for “within the meaning of Directive 2009/31/EC ” there were substituted “ containing a storage site permitted in accordance with the CCS licensing regime ” ;

(ii) in the second subparagraph, for “pursuant to Article 16 of Directive 2009/31/EC have been taken”, there were substituted “ have been taken in accordance with the CCS licensing regime ” .

16. Article 26(3) is to be read as if after “source streams” there were inserted “ and marginal source streams ” .

17. Article 31(1)(b) is to be read as if for “Member State” there were substituted “ United Kingdom ” .

18. Article 38 is to be read as if—

(a) in paragraph 2, after “zero” there were inserted “, but [^F331 , subject to paragraph 2a, ^F331] the emission factor for bioliquids shall be zero only if the sustainability criteria set out in Article 17(2) to (5) of Directive 2009/28/EC have been fulfilled” ;

(aa)[^F332 after paragraph 2 there were inserted—

“2a. The emission factor for category 1 tallow or category 2 tallow may be treated as zero where the tallow concerned is used to produce heat that is used at the operator’s installation (including heat used to generate electricity at the installation, but only if the electricity is used at the installation).

In this paragraph:

(a)“category 1 tallow” means tallow that is category 1 material under Article 8 of Regulation (EC) No 1069/2009 of the European Parliament and of the Council of 21 October 2009 laying down health rules as regards animal by-products and derived products not intended for human consumption;

(b)“category 2 tallow” means tallow that is category 2 material under Article 9 of that Regulation;”^F332]

(b) in paragraph 4, after “ de minimis ” there were inserted “ or marginal ” .

19. Article 39 is to be read as if—

(a) in paragraph 2, the third subparagraph were omitted;

[^F333 (b) paragraph 3 were omitted.^F333]

20. Article 42(1) is to be read as if, in the second subparagraph, “, standards published by the Commission” were omitted.

[^F334 20A. Article 43(4)(c) is to be read as if for “Commission” there were substituted “UK ETS authority” . ^F334]

21. Article 47(1) is to be read as if for “Annex I to Directive 2003/87/EC ” there were substituted “ paragraph 3 of Schedule 2 to the 2020 Order ” .

22. Article 48(2) is to be read as if—

(a) for “activities covered by Annex I to Directive 2003/87/EC or included pursuant to Article 24 of that Directive” there were substituted “ regulated activities ” ;

(b) for “activity covered by that Directive” there were substituted “ regulated activity ” ;

23. Article 49 is to be read as if—

(a) in paragraph 1—

(i) in the words before point (a), for “activities covered by Annex I to Directive 2003/87/EC ” there were substituted “ regulated activities ” ;

(ii) in point (a), for “under Directive 2009/31/EC ” in each place it occurs there were substituted “ in accordance with the CCS licensing regime ” ;

(b) in paragraph 2—

(i) in the first subparagraph, the words from “the operator” in the first place it occurs to “other cases,” were omitted;

(ii) for the second subparagraph there were substituted—

“In its annual emissions report, the operator of the receiving installation shall provide the name, address and contact information of a contact person for the transferring installation.”.

[^F335 (c) in paragraph 3 in the first subparagraph after “expressed as the quantity of CO ₂ transferred.” there were inserted “(But see subsection B.2 of section 21 of Annex 4, which provides for the use of a calculation-based methodology instead of a measurement-based methodology.)” . ^F335]

24. Article 50 is to be read as if—

(a) in paragraph 1—

(i) in the first subparagraph, for “activities covered by Annex I to Directive 2003/87/EC for which that Annex specifies N ₂ O as relevant” there were substituted “ regulated activities in respect of which N ₂ O emissions are specified emissions (as defined in the 2020 Order) ” ;

(ii) in the third subparagraph, for “not covered by Directive 2003/87/EC ” there were substituted “ not covered by the 2020 Order ” ;

(b) for paragraph 2 there were substituted—

“2. In its annual emissions report, the operator of the transferring installation shall provide the name, address and contact information of a contact person for the receiving installation.

In its annual emissions report, the operator of the receiving installation shall provide the name, address and contact information of a contact person for the transferring installation.”.

25. Article 51 is to be read as if—

(a) in paragraph 1, for “activities for all flights included in Annex I to Directive 2003/87/EC that are” there were substituted “ activity that is ” ;

(b) paragraphs 2 to 4 were omitted.

26. Article 53 is to be read as if—

(a) ^M40 in paragraph 2, for “section 1 of Annex III” there were substituted “ Appendix 2 to Annex 16, Volume IV to the Chicago Convention ” ;

(b) in paragraph 3, for “section 1 of Annex III” there were substituted “ Appendix 2 to Annex 16, Volume IV to the Chicago Convention ” .

[^F336 27. Article 54 is to be read as if for the whole Article there were substituted—

“Article 54 Specific provisions for biofuels

1. For mixed fuels, the aircraft operator may either assume the absence of biomass and apply a default fossil fraction of 100% or determine a biomass fraction in accordance with paragraph 2 or 3.

2. Where biofuels are physically mixed with fossil fuels and delivered to an aircraft in physically identifiable batches, the aircraft operator may carry out analyses in accordance with Articles 32 to 35 to determine the biomass fraction on the basis of a relevant standard and the analytical methods set out in those Articles, provided that the use of that standard and those analytical methods is approved by the regulator. Where the aircraft operator provides evidence to the satisfaction of the regulator that such analyses would incur unreasonable costs or are technically not feasible, the aircraft operator may base an estimation of the biomass fraction on a mass balance of fossil fuels and biofuels purchased.

3. Where purchased biofuel batches are not physically delivered to a specific aircraft, the aircraft operator shall not use analyses to determine the biomass fraction of the fuels used. In such a case, the aircraft operator may determine the biomass fraction using purchase records of biofuel of equivalent energy content, provided that the aircraft operator provides evidence to the satisfaction of the regulator that there is no double counting of the same biofuel quantity, in particular that the biofuel purchased is not claimed to be used by anyone else.

4. Where a biofuel meets the sustainability criteria ^F337..., the emission factor of the biofuel shall be zero; and for the purpose of determining whether the sustainability criteria are met, the biofuel (wherever supplied) must be treated as supplied in the United Kingdom.

5. Where a biofuel does not meet [^F338the sustainability criteria^F338] , the carbon content of the biofuel shall be treated as fossil carbon.

[^F3396. In this Article, “sustainability criteria”, in relation to biofuel, means the sustainability criteria (within the meaning of the Renewable Transport Fuel Obligations Order 2007) that applied for the purposes of that Order on the date of purchase of the biofuel.”^F339] .^F336]

28. Article 55(2) is to be read as if for “Commission” there were substituted “ UK ETS authority ” .

29. Article 58(1) is to be read as if the second subparagraph were omitted.

30. Article 68 is to be read as if for the whole Article there were substituted—

“Article 68 Obligations for reporting _I115_,_I116_,_I117_,_I118_,_I119_,_I120_,_I121_,_I122_,_I123_,_I124

Annex X (minimum content of annual reports) has effect for the purposes of article 33 of and paragraph 4(2)(b) of Schedule 6 and paragraph 11(2)(b) of Schedule 7 to the 2020 Order.”.

31. Article 71 is to be read as if—

(a) the first sentence were omitted;

(b) for “With regard to the application of the exception, as specified in Article 4(2)(d) of Directive 2003/4/EC ”, there were substituted ^M41^,^M42^,^M43 “ With regard to the potential application in relation to emission reports of the exemption in section 43 of the Freedom of Information Act 2000 , the exception in regulation 12(5)(e) of the Environmental Information Regulations 2004 or the exception in regulation 10(5)(e) of the Environmental Information (Scotland) Regulations 2004 ” .

[^F340 31A. Article 72(1) is to be read as if for the first subparagraph there were substituted—

“Total annual emissions of each of the greenhouse gases CO₂, N₂O and PFCs shall be reported as rounded tonnes of CO₂ or CO_2(e). The total annual emissions of the installation shall be calculated as the sum of these three rounded values.”.^F340]

32. Article 72(3) is to be read as if “calculating the distance and payload pursuant to Article 57 and” were omitted.

33. Article 73 is to be read as if—

(a) in the words before point (a), for the words from “Each activity” to “aircraft operator” there were substituted “ Each regulated activity carried out by an operator and each aviation activity carried out by an aircraft operator ” ;

(b) points (b) and (c) were omitted;

^F341 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34. Article 78 is to be read as if the words from “However” to the end were omitted.

35. Annex 1 is to be read as if—

[^F342 (a) in section 1—

(i) in point (1)(a)—

(aa) in the opening words “a description of the installation and activities carried out by the installation to be monitored, containing” were omitted;

(bb) in point (i) for “description” there were substituted “list” ;

(cc) in point (ii) “describing the installation or” were omitted;

(ii) in point (2)(b) for “and de minimis ” in both places it occurs there were substituted “, de minimis and marginal” ; ^F342]

(b) in section 2, in point 1—

(i) in point (a), “the administering Member State,” were omitted;

(ii) in point (d), for “covered by Annex I to Directive 2003/87/EC ” there were substituted “ an aviation activity ” ;

(iii) in point (k), for “Article 28a(6) of Directive 2003/87/EC ” there were substituted “ article 33(2) of the 2020 Order ” ;

[^F343 (c) in section 2, in point 2—

(i) in point (b)(i) “(Method A or Method B)” were omitted;

(ii) after point (e) there were inserted—

“(f)where applicable, a description of the procedure used to assess if biofuels meet the sustainability criteria [^F344(as defined in Article 54(6))^F344] ;

(g)where applicable, a description of the procedure used to determine biofuel quantities based on purchase records in accordance with Article 54(3).”.^F343]

[^F345 36. Annex 2 is to be read as if—

(a) in section 2—

(i) in the first subparagraph before section 2.1—

(aa) for “all activities as listed in Annex I to Directive 2003/87/EC or included in the Union system under Article 24 of that Directive” there were substituted “all regulated activities” ;

(bb) for “section 5” there were substituted “section 4” ;

(ii) in the second subparagraph before section 2.1 for “sections 4 and 5” there were substituted “section 4” ;

(iii) in section 2.4 in the subparagraph relating to Tier 1 for “competent authority or the Commission” there were substituted “UK ETS authority” ;

(b) in section 4—

(i) for the heading there were substituted “ Definition of tiers for the calculation factors for CO ₂ process emissions ” ;

(ii) for the subparagraph before section 4.1 (beginning “For all process emissions” and ending “from the process”) there were substituted—

“For all CO₂ process emissions (including emissions from the decomposition of carbonates and from process materials containing carbon other than in the form of carbonates, including urea, coke and graphite), where they are monitored using the standard methodology in accordance with Article 24(2), the tiers defined in this section for the applicable calculation factors shall be applied.

In the case of mixed materials which contain inorganic as well as organic forms of carbon, the operator may choose:

—to determine a total preliminary emission factor for the mixed material by analysing the total carbon content, and using a conversion factor and – if applicable – biomass fraction and net calorific value related to that total carbon content; or

—to determine the organic and inorganic contents separately and treat them as two separate source streams.

For emissions from the decomposition of carbonates, the operator may choose for each source stream one of the following methods:

(a)Method A (Input based): The emission factor, conversion factor and activity data are related to the amount of material input into the process.

(b)Method B (Output based): The emission factor, conversion factor and activity data are related to the amount of output from the process.

For other CO₂process emissions, the operator shall apply only method A.”;

(iii) in section 4.1 in the subparagraph relating to Tier 1 for point (a) there were substituted—

“(a)the standard factors listed in Table 2 of Annex 6 in the case of carbonate decomposition or in Tables 1, 4 or 5 of that Annex for other process materials;”;

(iv) after section 4.4 there were inserted—

“4.5 Tiers for the net calorific value

If relevant, the operator shall determine the net calorific value (“NCV”) of the process material using the tiers defined in section 2.2 of this Annex. NCV is considered not relevant for marginal or de minimis source streams or where the material is not itself combustible without other fuels being added. If in doubt, the operator shall seek confirmation by the regulator on whether NCV has to be monitored and reported.

4.6 Tiers for the biomass fraction

If relevant, the operator shall determine the biomass fraction of the carbon contained in the process material using the tiers defined in section 2.4 of this Annex.”;

37. Annex 3 is to be read as if section 1 were omitted.

38. Annex 4 is to be read as if—

[^F346 (a) in section 1—

(i) in subsection A for “all activities as listed in Annex I to Directive 2003/87/EC or included in the Union system under Article 24 of that Directive” there were substituted “all regulated activities” ;

(ii) in subsection C.2 in the first subparagraph for “section 5” there were substituted “section 4” ;

(aa) in each of the headings of sections 2 to 20 for “Annex I to Directive 2003/87/EC ” there were substituted “ Schedule 2 to the Greenhouse Gas Emissions Trading Scheme Order 2020 ” ;

(ab) in section 4 in subsection B for “sections 2, 4 and 5” there were substituted “sections 2 and 4” ;

(ac) in section 8—

(i) in subsection A “, and any guidelines published by the Commission for this purpose” were omitted;

(ii) in subsection B in calculation method B (overvoltage method) for “F _CF2F6 ” in both places there were substituted “F _C2F6 ” ;

(ad) in section 9—

(i) in subsection A for “organic” there were substituted “non-carbonate” ;

(ii) in subsection B in the second subparagraph for “organic” there were substituted “non-carbonate” ;

(iii) in subsection D for “The following tier definitions” in both places there were substituted “By way of derogation from section 4 of Annex 2, the following tier definitions” ;

(ae) in section 10—

(i) in subsection B in the first subparagraph—

(aa) “and section 5” were omitted;

(bb) for “organic” there were substituted “non-carbonate” ;

(ii) after subsection B there were inserted—

“C. Emissions from non-carbonate carbon in raw materials

The operator shall determine the emissions from non-carbonate carbon at least from limestone, shale or alternative raw materials in the kiln in accordance with Article 24(2).

By way of derogation from section 4 of Annex 2, the following tier definitions for the emission factor shall apply:

Tier 1: The content of non-carbonate carbon in the relevant raw material shall be estimated using industry best practice guidelines.

Tier 2: The content of non-carbonate carbon in the relevant raw material shall be determined at least annually following the provisions of Articles 32 to 35.

By way of derogation from section 4 of Annex 2, the following tier definitions for the conversion factor shall apply:

Tier 1: A conversion factor of 1 shall be applied.

Tier 2: The conversion factor shall be calculated applying industry best practice.”;

(af) in section 11 in subsection B in the first subparagraph for “section 5” there were substituted “section 4” ;

(ag) in section 12—

(i) in subsection A for “fossil organic material” there were substituted “non-carbonate carbon content” ;

(ii) in subsection B in the first subparagraph—

(aa) for “sections 4 and 5” there were substituted “section 4” ;

(bb) for “organic content” there were substituted “non-carbonate carbon content” ;

(cc) for “organic carbon” there were substituted “non-carbonate carbon” . ^F346]

(b) in each of the headings of sections 21, 22 and 23, for “Directive 2009/31/EC ” there were substituted “ the CCS licensing regime ” ;

(c) in section 21, in subsection A, for “other activities covered by Directive 2003/87/EC ” there were substituted “ other regulated activities ” ;

(d) in section 22, in subsection B, for “Directive 2003/87/EC ” in both places it occurs there were substituted “ the 2020 Order ” ;

(e) in section 23—

(i) in subsection A, in the first subparagraph, for “Directive 2009/31/EC ” there were substituted “ the CCS licensing regime ” ;

(ii) in subsection A, in the second subparagraph, after “with”, there were inserted “ domestic legislation which immediately before IP completion day implemented ” ;

(iii) in subsection B.3, in the definition of “T _end ”, after “with”, there were inserted “ domestic legislation which immediately before IP completion day implemented ” .

[^F347 (f) after section 23 there were inserted—

“24. UPSTREAM GHG REMOVAL AS LISTED IN SCHEDULE 2 TO THE GREENHOUSE GAS EMISSIONS TRADING SCHEME ORDER 2020

A. Scope

The operator shall monitor and report all CO₂ emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order) that are released in a combustion process or as vented emissions without a combustion process.

Where emissions are released in a combustion process, the scope is as set out in section 1 of this Annex. Where emissions are released as vented emissions without a combustion process, the operator shall include at least vents and unlit flares.

B. Specific monitoring rules

Where emissions are released in a combustion process, monitoring shall be carried out in accordance with section 1 of this Annex.

Where emissions are released as vented emissions without a combustion process, if a measurement-based methodology is used, Annex 8 is to be read as if in section 1 in Table 1 (tiers for CEMS (maximum permissible uncertainty for each tier)) for the first row there were substituted:

	Tier 1	Tier 2	Tier 3	Tier 4
“CO ₂ emission sources	± 17.5%	± 12.5%	± 7.5 %	N.A.”.

Where emissions are released as vented emissions without a combustion process, the operator may choose to apply a calculation-based methodology whereby:

(a)vented emissions released at a vent or unlit flare are to be treated as a “source stream” for the purposes of this Regulation and monitored accordingly;

(b)venting is to be treated as the process that causes vented emissions;

(c)emissions are to be determined by multiplying the activity data related to vented emissions, expressed as tonnes or normal cubic metres, by the corresponding emission factor, expressed as t CO₂/t or t CO₂/Nm³.

Where the methodology referred to in the preceding paragraph is applied, for the purposes of that methodology:

(a)Article 3 is to be read as if in point (13) (definition of “emission factor”) “assuming complete oxidation for combustion and complete conversion for all other chemical reactions” were omitted;

(b)Article 27 is to be read as if:

(i)paragraph 1(b) were omitted;

(ii)paragraph 2 were omitted;

(c)Article 30 is to be read as if in paragraph 2 in the first subparagraph the reference to fuel included a reference to vented emissions;

(d)Article 31 is to be read as if in paragraph 1(e) for “batches of the same fuel or material” there were substituted “vented emissions”;

(e)Article 32 is to be read as if:

(i)in paragraph 2 the reference to fuels included a reference to vented emissions;

(ii)in paragraph 3 for “delivery period or batch of fuel or material” there were substituted “period of release of vented emissions”;

(f)Article 33 is to be read as if:

(i)in paragraph 1:

(aa)in the first subparagraph for “each fuel or material” there were substituted “vented emissions”;

(bb)in the second subparagraph for “batch or delivery period” there were substituted “period of release of vented emissions”;

(cc)in the second subparagraph for “the respective fuel or material” there were substituted “vented emissions”;

(ii)in paragraph 2:

(aa)for “the respective fuel or material” there were substituted “vented emissions”;

(bb)for “the fuel or material” there were substituted “the vented emissions”;

(cc)for “that specific fuel or material” there were substituted “those vented emissions”;

(g)Article 35 is to be read as if:

(i)in paragraph 1 for “relevant fuels or materials” there were substituted “vented emissions”;

(ii)in paragraph 2 in the first subparagraph in point (a):

(aa)for “the respective fuels or materials” there were substituted “vented emissions”;

(bb)for “the respective fuel or material” there were substituted “vented emissions”;

(cc)for “the relevant fuel or material” there were substituted “vented emissions”;

(iii)in paragraph 2 in the second subparagraph for “Where an installation operates for part of the year only, or where fuels or materials are delivered in batches that are consumed over more than one calendar year” there were substituted “Where vented emissions are not released continuously”;

(h)Article 36 is to be read as if after paragraph 3 there were inserted:

“4. Emission factors of vented emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order) shall be expressed as t CO₂/t or t CO₂/Nm³.”;

(i)Annex 2 is to be read as if:

(i)in section 1 in Table 1 (tiers for activity data (maximum permissible uncertainty for each tier)) after the last row there were inserted:

Activity/source stream type	Parameter to which the uncertainty is applied	Tier 1	Tier 2	Tier3
“Vented emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order)	Amount of vented emissions [t] or [Nm ³ ]	± 17.5%	± 12.5 %	± 7.5%”;

(ii)after section 4 there were inserted:

“5. DEFINITION OF TIERS FOR EMISSION FACTORS FOR VENTED EMISSIONS FROM UPSTREAM GHG REMOVAL

Operators shall monitor vented CO₂ emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order) using the tier definitions for emission factors laid down in this section.

Tier 1: The operator shall derive emission factors for vented emissions based on a proxy agreed with the regulator, in combination with an empirical correlation as determined at least once per year in accordance with Articles 32 to 35.

The operator shall ensure that the correlation satisfies the requirements of good engineering practice and that it is applied only to values of the proxy which fall into the range for which it was established.

Tier 2: The operator shall apply one of the following:

(a)determination of the emission factor in accordance with the relevant provisions of Articles 32 to 35;

(b)the empirical correlation as specified for Tier 1, where the operator demonstrates to the satisfaction of the regulator that the uncertainty of the empirical correlation does not exceed 1/3 of the uncertainty value to which the operator has to adhere with regard to the activity data determination of the vented emissions.”;

(j)Annex 5 is to be read as if in Table 1 (minimum tiers to be applied for calculation-based methodologies in the case of category A installations, etc.) after the last row there were inserted:

	Activity data	Emission factor	Composition data (carbon content)	Oxidation factor	Conversion factor
Vented emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order)	1	n.a.	1	n.a.	n.a.	n.a.”;

Activity data

Emission

factor

Composition data

(carbon content)

Oxidation

factor

Conversion factor

Activity/Source stream type

Amount of fuel or material

Net calorific value

“Upstream GHG removal

Vented emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order)

n.a.

n.a.”;

(k)Annex 7 (minimum frequency of analyses) is to be read as if in the table after the last row there were inserted:

Fuel/material	Minimum frequency of analyses
“Vented emissions from upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order)	At least weekly””^F347]

[^F348 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
N₂ O	265 t CO_2(e) /t N₂ O
CF₄	6 630 t CO_2(e) /t CF₄
C₂ F₆	11 100 t CO_2(e) /t C₂ F₆

(2) The modifications made by sub-paragraph (1) have effect in relation to the 2023 and subsequent scheme years.^F348]

39. Section 2(7) of Annex 9 is to be read as if—

(a) in point (c)—

(i) after “storage permit”, there were inserted “ for the storage site ” ;

(ii) for “Article 9 of Directive 2009/31/EC ” there were substituted “ the CCS licensing regime ” ;

(b) in each of points (d), (e) and (f), after “with”, there were inserted “ domestic legislation which immediately before IP completion day implemented ” .

40. Annex 10 is to be read as if—

(a) in the heading, for “68(3)” there were substituted “ 68 ” ;

(b) in section 1—

[^F349 (ai) for point (1) there were substituted—

“(1) Name and address of the installation and details of the following:

(a)type and number of regulated activities carried out at the installation;

(b)address, telephone number and email address of two contact persons;

(c)name of the operator of the installation;

(d)permit number;”;^F349]

(i) in point (6), for “Information” there were substituted “ Subject to the subparagraph after point (13), information ” ;

[^F350 (ia) in point (8)(g) for “as recognised in accordance with the acts adopted pursuant to Article 19(3) of Directive 2003/87/EC ” there were substituted “in the registry” ; ^F350]

(ii) in the subparagraph after point (13), at the end there were inserted “Emissions occurring from marginal source streams may be reported in an aggregate manner.”;

(iii) in the final subparagraph, after “with”, there were inserted “ domestic legislation which immediately before IP completion day implemented ” ;

(i) in point (1), after “Directive 2003/87/EC ”, there were inserted “(read as if references in that Annex to “its administering Member State” and “in the administering Member State” were omitted and as if references to “aviation activities listed in Annex I” were references to “aviation activity”)”;

(ii) in point (6), for “aviation activities covered by Annex I to Directive 2003/87/EC ” there were substituted “ aviation activity ” ;

(iii) in point (9), for “Member State” there were substituted “ state ” ;

[^F351 (iiia) for point (12) there were substituted—

“(12) Memo-items:

(a)amount of biofuels used during the reporting year (in tonnes or m³) listed per fuel type, and whether the biofuels meet the sustainability criteria [^F352(as defined in Article 54(6))^F352] ;

(b)the net calorific value of biofuels and alternative fuels;”;^F351]

(iv) in point (13), for “operator” in both places it occurs there were substituted “ aircraft operator ” ;

(d) in section 3—

(ii) in point (6), for “aviation activities covered by Annex I to Directive 2003/87/EC ” there were substituted “ aviation activity ” ;

(iii) in point (8), for “aviation activities listed in Annex I of Directive 2003/87/EC ” there were substituted “ aviation activity ” .

Article 25

[^F353SCHEDULE 5 Modifications to Verification Regulation 2018 _I125

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 ” ;

(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 [^F354 the standard referred to in Annex 2 ^F354] ;

[^F355 (ai) “or another legal entity” were omitted; ^F355]

(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 [^F356 the standard referred to in Annex 2 ^F356] ;

(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 ” ;

(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 ” ;

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 ” ;

(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;”;

“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 ” ;

(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—

“Article 34a Virtual site visits [^F357by verifiers of installations^F357] because of force majeure

Where serious, extraordinary and unforeseeable circumstances, outside the control of the operator ^F358..., 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 ^F358... 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 ^F358... thereof without undue delay.

The operator ^F359... 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 ^F360... 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.

[^F361Article 34b Virtual site visits by verifiers of aircraft operators

1. For the purpose of verifying the report of an aircraft operator (other than a small emitter referred to in Article 55(1) of Implementing Regulation (EU) 2018/2066), the verifier may, with the agreement of the aircraft operator and subject to the approval of the regulator in accordance with paragraph 4, carry out a virtual site visit instead of carrying out a physical site visit in accordance with Article 21(1).

2. Before any virtual site visit, the verifier must undertake a risk analysis that includes considering measures to reduce the verification risk to an acceptable level to obtain reasonable assurance that the aircraft operator’s report is free from material misstatements.

3. An application for the regulator’s approval for a virtual site visit must be submitted by an aircraft operator on or before 28 February in the year after the scheme year to which the aircraft operator’s report relates or such later date as the regulator may specify.

4. On an application being submitted, the regulator must take the following into consideration in deciding whether or not to approve the virtual site visit:

(a)the information provided by the verifier on the outcome of the risk analysis;

(b)information on how the virtual site visit will be carried out;

(c)evidence that measures are taken to reduce the verification risk to an acceptable level;

(d)any proposal to carry out a physical site visit after the virtual site visit;

(e)any other information requested by the regulator to enable the regulator to decide whether or not to approve the virtual site visit.

5. When approving a virtual site visit, the regulator may impose conditions on the approval (including a condition that a physical site visit be carried out within a period specified by the regulator); and the aircraft operator must ensure that any conditions are complied with.”^F361] .

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 ” ;

(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 ” ;

“(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;

“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 ” .

[^F362 34. Article 46(1) is to be read as if—

(a) in the first subparagraph “or other legal entity” were omitted;

(b) in the second subparagraph “harmonised” were omitted. ^F362]

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.

[^F363 37. Article 49 is to be read as if—

(a) in paragraph 1 “harmonised” were omitted;

(b) in paragraph 2 in the second subparagraph “harmonised” were omitted;

“3. An accreditation certificate granted on attestation by the national accreditation body that a verifier meets the requirements set by EN ISO 14065:2013 ceases to be valid on 1 July 2024 unless before that date the accreditation of the verifier is extended or renewed on attestation by the national accreditation body that the verifier meets the requirements set by EN ISO 14065:2020, in conjunction with ISO/IEC 17029:2019.”.^F363]

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;

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;

(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 ” ;

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 ” ;

[^F364 (iia) after the entry for group 12 (aviation activities) there were inserted—

Activity Group No	Scopes of accreditation
“13	Upstream GHG removal (as defined in paragraph 3(6A) of Schedule 2 to the 2020 Order)”^F364]

(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.

[^F365 55. Annex 2 is to be read as if for the first sentence there were substituted—

“The standard referred to in this Annex is:

(a)EN ISO 14065:2020, in conjunction with ISO/IEC 17029:2019:

(i)with respect to requirements on verifiers in relation to new requests for accreditation (whenever made);

(ii)with respect to other requirements on verifiers on or after 1 July 2024;

(b)either the standard referred to in point (a) or EN ISO 14065:2013, with respect to requirements on verifiers (other than those referred to in point (a)(i)) before 1 July 2024.”.^F365]

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 ” . ^F353]

Article 25A

[^F366SCHEDULE 5A Registry

PART 1 Preliminary

Interpretation

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—

(a)

an offence specified, or falling within a description specified, in Schedule 1 to the Serious Crime Act 2007;

(b)

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);

(c)

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—

(a)

Saturday, Sunday, Good Friday or Christmas Day;

(b)

a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.

Submission of applications, etc. to registry administrator

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.

Account holders: fit and proper person

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.

Authorised representatives: fit and proper person

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.

PART 2 Establishment and operation of registry

Registry

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 [^F367 , aircraft operators and maritime operators^F367] participating in the UK ETS;

(b)allowances held by persons and the allocation and transfer of allowances;

[^F368 (c)reportable emissions of installations, aviation emissions of aircraft operators and maritime emissions of maritime operators;^F368]

[^F369 (d)the surrender of allowances by operators, aircraft operators and maritime operators in accordance with articles 27 and 34 and paragraph 15 of Schedule 2A.^F369]

(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);

[^F370 (iva)maritime operator holding accounts (see paragraph 13A);^F370]

(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.

Operation of registry

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.

[[^F371^,^F372Reportable emissions, aviation emissions and maritime emissions to be recorded in the registry^F372]

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.

[^F373 (4) Where a maritime operator submits an annual emissions report to the regulator in accordance with paragraph 14 of Schedule 2A, the maritime emissions less any surrender deduction stated in the report must be recorded in the maritime operator’s maritime operator holding account on or before 30th April in the year in which the report is submitted.

(5) Where the regulator makes a determination under articles 45 to 45B, the emissions so determined must, within one month of the notice of their determination being given under article 45(5), 45A(4) or 45B(3), be recorded by the registry administrator—

(a)in the case of reportable emissions of the operator of an installation, in its operator holding account;

(b)in the case of aviation emissions of an aircraft operator, in its aircraft operator holding account; and

(c)in the case of a maritime operator, in its maritime operator holding account.^F373^,^F371]]

Suspension of registry due to security concerns

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.

Suspension of registry for technical reasons

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.

[^F374Exemption 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.^F374]

PART 3 Accounts

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);

(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);

[^F375 (i)a flexible reserve account (to keep track of the flexible reserve referred to in article 23A).^F375]

(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 _cross-notes

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 [^F376 (but see sub-paragraph (8))^F376] ; 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).

[^F377 (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.^F377]

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).

(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.

[^F378Maritime operator holding accounts

13A.—(1) Where the regulator issues an emissions monitoring plan to a person under paragraph 10 of Schedule 2A, the regulator must, as soon as reasonably practicable, instruct the registry administrator to open a maritime 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 a maritime operator holding account.

(3) As soon as is 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 a maritime operator holding account and—

(a)if the registry administrator considers that the person is a fit and proper person to hold a maritime 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 a maritime 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).

(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 a maritime 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.^F378]

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;

(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.

[^F379 (e)in the case of an operator holding account [^F380 , an aircraft operator holding account or a maritime operator holding account^F380] , 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).^F379]

(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) [^F381 , (c) or (e) ^F381] .

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.

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);

(c)paragraph 13(3)(b) (aircraft operator holding accounts);

[^F382 (ca)paragraph 13A(3)(b) (maritime operator holding accounts);^F382]

(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.

[^F383 (6) The registry administrator may reverse the transfer of an allowance from the allocation account if the transfer was made in error.^F383]

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, a person who is an aircraft operator in relation to a scheme year or a person who is a maritime operator in relation to a scheme year may surrender an allowance by transferring the allowance from—

(a)the operator’s operator holding account for the installation;

(b)the aircraft operator’s aircraft operator holding account; or

(c)the maritime operator’s maritime operator holding account,

to the surrender account.^F384]

(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; ^F385...

[^F386 (iii)where the person requesting the reversal is a maritime operator in relation to a scheme year, the person’s obligation to surrender allowances under paragraph 15 of Schedule 2A; and^F386]

(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.

[^F387 (d)at the request of the account holder.^F387]

(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 [^F388 under sub-paragraph (1)(a), (b) or (c)^F388] , 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.

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—

(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.) [^F389 , any deficit notice given under article 44A or any notice given under paragraph 10 of Schedule 6 (transfer of permits: underreporting discovered after transfer),^F389] 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.) [^F390 , or any deficit notice given under article 44A,^F390] 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.

[^F391Closure of maritime operator holding accounts

28A.—(1) This paragraph applies where—

(a)the regulator is satisfied that a person has ceased to perform maritime activity and there is no realistic prospect that the person will resume maritime activity;

(b)the person has complied with the requirements of paragraph 15 of Schedule 2A or the regulator considers that there is no reasonable prospect of the requirements being complied with; and

(c)where relevant, 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 deficit notice being complied with.

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

(3) The registry administrator must give notice to the person as soon as reasonably practicable after the account is closed.^F391]

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 [^F392 27, 28, 28A or 29(2) or (3)^F392] .

(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.^F366]

[^F393PART 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;

[^F394 (ba)maritime operator holding accounts;^F394]

(c)trading accounts.

(2) The information is—

(a)the account holder’s name;

(b)the type of account;

(c)whether the account is open or closed;

(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;

[^F395 (ea)if the account is a maritime operator holding account, the information referred to in paragraph 33A;^F395]

(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;

(c)the number of the installation’s greenhouse gas emissions permit;

(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;

(c)the number of the account holder’s emissions monitoring plan;

(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;

(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.

[^F396Information about accounts: maritime operator holding accounts

33A.—(1) In the case of a maritime operator holding account, the information is—

(a)the regulator of the account holder;

(b)the number of the account holder’s emissions monitoring plan;

(c)the first scheme year for which the account holder’s maritime emissions (less any surrender deduction) are recorded in the account;

(d)if the account is closed, the last scheme year for which the account holder’s maritime emissions (less any surrender deduction) are recorded in the account;

(e)the account holder’s maritime emissions less any surrender deduction in each scheme year, and the account holder’s total maritime emissions less any surrender deduction in the trading period, recorded in the account as at the relevant date;

(f)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; and

(g) 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 a maritime operator in relation to the scheme year preceding the relevant date;

(b)paragraph (a) does not apply and the account holder’s maritime emissions less any surrender deduction 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)(f) is greater than or equal to the account holder’s maritime emissions less any surrender deduction 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)(f) is less than the account holder’s maritime emissions less any surrender deduction in the trading period recorded in the account as at the relevant date.

(3) In this paragraph, “ relevant date ” means 1st May preceding the date of publication of the information or the updated information. ^F396]

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;

(c)the number of allowances 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.^F397]

(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.

^F398(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F399 (5) This paragraph is subject to article 75C (national security).^F399^,^F393]]

Article 26(3)

SCHEDULE 6 Permits

PART 1 Application for greenhouse gas emissions permits

Greenhouse gas emissions permits: application_I126

^M441.—(1) The operator of an installation may apply to the regulator for a greenhouse gas emissions permit for the installation .

(2) But an application may not be made if a permit for the installation is already in force.

(3) In sub-paragraph (2), “ permit ” includes a permit within the meaning of GGETSR 2012 to which paragraph 1 of Schedule 11 applies (permits to be converted).

Greenhouse gas emissions permits: content of application_I127

2.—(1) An application for a greenhouse gas emissions permit must contain—

(a)an address to which correspondence relating to the application should be sent (in addition to the addresses required by paragraph 1(5) of Schedule 3);

(b)if the operator of the installation is a body corporate—

(i)its registered number and the postal address of its registered or principal office; and

(ii)where the operator is a subsidiary of a holding company, the name of the holding company (other than a holding company which is itself a subsidiary) and the postal address of the holding company's registered or principal office,

^M45 and in this paragraph “subsidiary” and “holding company” have the meanings given in section 1159 of the Companies Act 2006 ;

(c)in relation to the site of the installation—

(i)the postal address and national grid reference of the site (or in the case of an installation in UK coastal waters or the UK sector of the continental shelf equivalent information identifying the installation and its location);

(ii)a description of the site and the location of the installation on it; and

(iii)the name of any local authority where the site is situated;

(d)a description of the installation, the regulated activities to be carried out at the installation and the specified emissions from those activities;

(e)a description of the raw and auxiliary materials used in carrying out regulated activities at the installation, the use of which is likely to lead to specified emissions;

(f)a description of the sources of specified emissions from the regulated activities carried out at the installation;

(g)a monitoring plan in accordance with Article 12 of the Monitoring and Reporting Regulation 2018, together with—

(i)the supporting documents referred to in Article 12(1) of that Regulation;

(ii)except where the installation is an installation with low emissions within the meaning of Article 47(2) of that Regulation, the uncertainty assessment carried out under Article 28(1)(a) of that Regulation;

(h)a description, including the reference number, of any environmental licence issued in relation to the installation;

(i)any additional information that the operator wishes the regulator to take into account in considering the application;

(j)a non-technical summary of the information referred to in paragraphs (d) to (i); and

(k)the date on which the operator wishes the permit to come into force.

(2) In sub-paragraph (1)(h), “ environmental licence ” means—

(a)an authorisation under—

(i)^M46Part 1 of the Environmental Protection Act 1990 ;

(ii)^M47the Industrial Pollution Control (Northern Ireland) Order 1997 ;

(b)a permit under—

(i)^M48the Pollution Prevention and Control (Scotland) Regulations 2012 ;

(ii)^M49the Offshore Combustion Installations (Pollution Prevention and Control) Regulations 2013 ;

(iii)^M50the Pollution Prevention and Control (Industrial Emissions) Regulations (Northern Ireland) 2013 ;

(iv)^M51the Environmental Permitting (England and Wales) Regulations 2016 ;

(v)^M52the Environmental Authorisations (Scotland) Regulations 2018 .

[^F400Greenhouse gas emissions permits: issue of permit

3. A greenhouse gas emissions permit for an installation may be issued only if—

(a)a monitoring plan has been approved in relation to the installation under the Monitoring and Reporting Regulation 2018; and

(b)the regulator considers that from the date on which the permit comes into force the operator of the installation will be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of the permit.^F400]

Greenhouse gas emissions permits: content of permit_I128

4.—(1) A greenhouse gas emissions permit must contain—

(a)the name and postal address in the United Kingdom (including postcode) of the operator and any other address for correspondence included by the operator in the application;

(b)the postal address and national grid reference of the installation (or, in the case of an installation in UK coastal waters or the UK sector of the continental shelf, equivalent information identifying the installation and its location);

(c)a description of the installation, the regulated activities to be carried out at the installation and the specified emissions from those activities;

(d)a description of the site and the location of the installation on the site;

(e)the date on which the permit comes into force;

(f)the monitoring plan—

(i)^F401where an application is made for the permit, approved in relation to the installation under ...the Monitoring and Reporting Regulation 2018;

(ii)^F401^,^F401where an existing permit is converted into a greenhouse gas emissions permit, approved in relation to the installation under ...the Monitoring and Reporting Regulation 2012 or ... the Monitoring and Reporting Regulation 2018 for the purpose of monitoring specified emissions at the installation immediately before the greenhouse gas emissions permit comes into force;

(g)the monitoring and reporting conditions (see sub-paragraph (2));

(h)the surrender condition (see [^F402sub-paragraph (3)^F402] );

[^F403 (ha)the free allocation conditions (see sub-paragraph (6));

(hb)where a monitoring methodology plan has been approved in relation to the installation under Article 8 of the Free Allocation Regulation, the monitoring methodology plan;^F403]

[^F404 (hc)the cessation condition (see sub-paragraph (8));^F404]

(i)any conditions that the regulator considers necessary to ensure that the operator notifies the regulator of any planned or effective changes to the capacity, activity level or operation of the installation, on or before 31st December in the year in which the change is planned or occurs;

(j)any other conditions that the regulator considers appropriate to include in the permit.

(2) The monitoring and reporting conditions are—

(a)a condition requiring the operator to monitor the installation's reportable emissions in accordance with—

(i)the Monitoring and Reporting Regulation 2018; and

(ii)the monitoring plan (including the written procedures supplementing the monitoring plan);

(b)a condition requiring the operator to prepare in accordance with the Monitoring and Reporting Regulation 2018 a report of the installation's reportable emissions in each scheme year that is verified [^F405as satisfactory^F405] in accordance with the Verification Regulation 2018 and to submit the report [^F406(and the verification report)^F406] to the regulator on or before 31st March in the following year;

^F407(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)any further conditions that the regulator considers necessary to give proper effect to the Monitoring and Reporting Regulation 2018 or the Verification Regulation 2018.

(3) The surrender condition is a condition requiring the operator to surrender allowances equal to the installation's reportable emissions in a scheme year on or before 30th April in the following year.

^F408(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F409(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F410 (6) The free allocation conditions are the following conditions, which must be expressed to apply while the installation is an FA installation [^F411 and, in relation to the condition in paragraph (b)(i) only, to an installation referred to in Article 3(1a) of the Activity Level Changes Regulation^F411] —

(a)a condition requiring the operator to monitor the activity level of the installation in accordance with—

(i)the Free Allocation Regulation; and

(ii)the 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);

[^F412 (b)a 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—

(i)on or before 31st March in each scheme year; or

(ii)in the case of an installation in relation to which the Activity Level Changes Regulation has effect with the modifications referred to in paragraph 5 of Schedule 8A—

(aa)on or before 31st March in the first eligible scheme year (within the meaning of that Schedule) 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 that Schedule;

(bb)on or before 31st March in each subsequent scheme year;^F412]

^F413(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)any further conditions that the regulator considers necessary to give proper effect to the Free Allocation Regulation or the Activity Level Changes Regulation.

(7) Where, 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.^F410]

[^F414 (8) The cessation condition is a condition requiring the operator, where all regulated activities authorised by the permit have ceased to be carried out at the installation in a scheme year, to notify the regulator of the following on or before the cessation condition notification date—

(a)the date of the cessation;

(b)whether or not the operator intends for one or more of the regulated activities authorised by the permit to resume at the installation;

(c)where the operator does intend for one or more of the regulated activities authorised by the permit to resume at the installation, each of the following—

(i)the date by which the operator expects those regulated activities to resume;

(ii)whether either—

(aa)the installation is technically capable of resuming those regulated activities without physical changes being made; or

(bb)the operator intends for the technical capability required for those regulated activities to resume to be restored at the installation.

(9) But the cessation condition does not apply where either of the following conditions is met—

(a)the operator has applied to surrender the permit under paragraph 11;

(b)all regulated activities authorised by the permit have resumed prior to the cessation condition notification date.

(10) For the purposes of this paragraph, the “cessation condition notification date” is the later of —

(a)the last day of the period of 1 month beginning with the day on which all regulated activities authorised by the permit ceased to be carried out at the installation; and

(b)the 31st December in the scheme year within which the cessation occurs.^F414]

Greenhouse gas emissions permits: effect of permit, etc._I129

5.—(1) A greenhouse gas emissions permit for an installation—

(a)comes into force on the date set out in the permit;

(b)authorises the regulated activities set out in the permit to be carried out at the installation.

(2) The operator of the installation must comply with the conditions of the permit.

PART 2 Greenhouse gas emissions permits and hospital or small emitter permits

Variation of permits_I130

6.—(1) The operator of an installation—

(a)may apply to the regulator to vary the installation's permit;

(b)must apply to the regulator to vary the installation's permit where required by a condition of the permit;

[^F415 (c)must apply to the regulator to vary the installation's permit in consequence of the requirement in Article 9(2a) of the Free Allocation Regulation to modify the monitoring methodology plan.^F415]

(2) The regulator may vary an installation's permit at any time if the regulator considers that it is necessary to do so for the purposes of the UK ETS and in particular may do so in consequence of any of the following—

(a)a report of the operator referred to in Article 69 of the Monitoring and Reporting Regulation 2018;

(b)a notification under a condition included under paragraph 4(1)(i) (notification of planned changes in operation);

(c)a failure by the operator to comply with a condition of the permit to apply for a variation.

[^F416 (d)a failure by the operator to implement—

(i)a recommendation for improvement of the monitoring methodology plan as required by Article 9(2)(e) of the Free Allocation Regulation; or

(ii)a modification of the monitoring methodology plan requested by the regulator under Article 9(5)(d) of that Regulation.^F416]

(3) The regulator may vary a permit to comply with—

[^F417 (za)paragraph 4(7) (adding monitoring methodology plan);^F417]

(a)[^F418 paragraph 9(3), (3A)^F418] , (4) or (5) (transfer of permits);

(b)any of the following provisions of Schedule 7—

(i)paragraph 10 (conversion of permit to hospital or small emitter permit);

(ii)paragraph 18 (calculation of later emissions targets where initial targets based on estimates);

[^F419 (iia)paragraph 19C (capacity increases);^F419]

(iii)paragraph 20 (banking overachieved target);

(iv)^F420paragraph 21 (emissions targets for 2026-2030 ... period);

(v)paragraph 24 (conversion of permit on loss of hospital or small emitter status);

(vi)paragraph 26 (conversion of permit at end of 2021-2025 allocation period).

(4) The variation of an installation's permit is given effect by the regulator giving a notice to the operator of the installation setting out the variations to the permit.

(5) Where a permit is varied, the regulator may, by giving notice to the operator, replace the permit with a consolidated version that includes the variations.

Transfer of permits: application_I131

7. —(1) Subject to sub-paragraphs (3) and (4), a permit holder (the “transferring operator”) and another person (the “new operator”) may jointly apply to the regulator—

(a)for the transfer of the permit to the new operator;

(b)for the partial transfer of the permit to the new operator.

(2) For the purposes of this Order, the partial transfer of a permit is the transfer in respect of part of the installation at which the permit authorises a regulated activity to be carried out.

(3) An application for the transfer or partial transfer of a permit may not be made in respect of an installation (or part of an installation) [^F421in circumstances in which the transferred activities have ceased to be carried out unless the transferring operator is satisfied that the new operator intends to resume those activities^F421] .

(4) An application may not be made for the partial transfer of a hospital or small emitter permit.

(5) In this paragraph and paragraphs 8 to 10—

“ existing permit ” has the meaning given in [^F422 paragraph 9(3A) or (5) ^F422] ;

“ new operator ” has the meaning given in sub-paragraph (1);

“ transferred activities ” has the meaning given in paragraph [^F423 8(1)(a) ^F423] ;

“ transferred units ” has the meaning given in paragraph [^F423 8(1)(a) ^F423] ;

“ transferring operator ” has the meaning given in sub-paragraph (1).

Transfer of permits: contents of application_I132

8.[^F424—(1)^F424] An application for the transfer or partial transfer of a permit must contain—

(a) a description of the installation (or part of an installation) in respect of which the application is made (the “transferred units”) and of the regulated activities authorised to be carried out there (the “transferred activities”);

(b)in relation to both the transferring operator and the new operator, an address to which correspondence relating to the application should be sent (in addition to the addresses required by paragraph 1(5) of Schedule 3);

(c)if the new operator is a body corporate, the matters referred to in paragraph 2(1)(b) in relation to the new operator;

(d)either—

(i)the new operator's monitoring plan in accordance with Article 12 of the Monitoring and Reporting Regulation 2018, together with—

(aa)the supporting documents referred to in Article 12(1) of that Regulation;

(bb)except where the transferred units are an installation with low emissions within the meaning of Article 47(2) of that Regulation, the uncertainty assessment carried out under Article 28(1)(a) of that Regulation; or

(ii)the new operator's specification of the parts of the existing monitoring plan that it is proposed be varied and any necessary corresponding update of the supporting documents and any uncertainty assessment;

(e)in the case of an application for a partial transfer of a permit, the transferring operator's specification of the parts of the existing monitoring plan that it is proposed be varied and any necessary corresponding update of the supporting documents and any uncertainty assessment.

[^F425 (1A) Where an application is made—

(a)the new operator’s monitoring plan referred to in sub-paragraph (1)(d)(i) must be treated as if it had been submitted to the regulator for approval under Article 12 of the Monitoring and Reporting Regulation 2018; or

(b)if sub-paragraph (1)(d)(ii) or (e) applies, the new or transferring operator’s specification of the parts of an existing monitoring plan that it is proposed be varied must be treated as a significant modification within the meaning of Article 15 of that Regulation notified to the regulator for approval under that Article.^F425]

[^F426 (2) Where 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—

(a)either—

(i)the new operator's monitoring methodology plan in accordance with Article 8 of the Free Allocation Regulation; or

(ii)the new operator's specification of the parts of the existing monitoring methodology plan that it is proposed be varied;

(b)in 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.

(3) But 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.^F426]

[^F427 (4) Where sub-paragraph (2) applies—

(a)the new operator’s monitoring methodology plan referred to in sub-paragraph (2)(a)(i) must be treated as if it had been submitted to the regulator for approval under Article 8 of the Free Allocation Regulation; or

(b)if sub-paragraph (2)(a)(ii) or (b) applies, the new or transferring operator’s specification of the parts of an existing monitoring methodology plan that it is proposed be varied must be treated as a significant modification within the meaning of Article 9 of that Regulation notified to the regulator for approval under that Article.^F427]

Transfer of permits: grant of application_I133

9.[^F428—(1) An application for the transfer or partial transfer of a permit may be granted only if—

(a)the regulator considers that, from the transfer date, the new operator—

(i)will be the operator of the installation;

(ii)will be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of the permit (including as varied under this paragraph); and

(iii)where 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);

(b)the monitoring plan or the variations referred to in paragraph 8(1)(d) and, in the case of an application for the partial transfer of the permit, the variations referred to in paragraph 8(1)(e) have been approved under the Monitoring and Reporting Regulation 2018 (see paragraph 8(1A)); and

(c)where the application is for the transfer or partial transfer of a greenhouse gas emissions permit of an installation that is an FA installation, the monitoring methodology plan or the variations referred to in paragraph 8(2)(a) and, in the case of an application for the partial transfer of the permit, the variations referred to in paragraph 8(2)(b) have been approved under the Free Allocation Regulation (see paragraph 8(4)).^F428]

[^F429 (1A) But [^F430 sub-paragraph (1)(a)(iii) and (c) do not apply^F430] if the application contains a statement by the new operator that the new operator renounces free allocation in respect of the transferred units.^F429]

(2) Where an application for a transfer or a partial transfer is granted, the regulator must give notice of the transfer to—

(a)the transferring operator; and

(b)the new operator.

(3) Where an application for the partial transfer of a permit is granted—

(a) the regulator must issue a new greenhouse gas emissions permit (the “new permit”) to the new operator that—

(i)sets out that the new permit comes into force on the transfer date;

(ii)sets out the transferred activities and the transferred units at which the transferred activities may be carried out;

(iii)includes such other provisions as the regulator considers appropriate to take account of the transfer;

(b) the regulator may make such corresponding variations under paragraph 6 to the permit (the “original permit”) held by the transferring operator as the regulator considers appropriate to take account of the transfer;

(c)the new permit comes into force on the transfer date to authorise the transferred activities to be carried out at the transferred units from that date;

(d)the variations to the original permit have effect from the transfer date (which must be set out in the original permit).

[^F431 (3A) But if the new operator already holds a permit (the “existing permit”) for an installation that is on the same site as the transferred units, the regulator may, instead of issuing a new greenhouse gas emissions permit to the new operator under sub-paragraph (3), vary the existing permit under paragraph 6 so that it includes such variations as the regulator considers necessary to take account of the transferred units and transferred activities; and if the regulator does so—

(a) the regulator must make such corresponding variations under paragraph 6 to the permit (the “original permit”) held by the transferring operator as the regulator considers appropriate to take account of the transfer;

(b)the variations to the existing permit and the original permit have effect from the transfer date, which must be set out in the existing permit and the original permit.^F431]

(4) Where an application for the transfer of a permit (other than for a partial transfer) is granted—

(a)the regulator must vary the permit under paragraph 6 so that it includes—

(i)the name and other particulars of the new operator;

(ii)the transfer date;

(iii)such variations to the monitoring plan as the regulator considers appropriate;

(b)the new operator is the holder of the permit as varied from the transfer date.

(5) But if the new operator already holds a permit (the “existing permit”) for an installation that is on the same site as the transferred units, the regulator may, instead of varying the transferring operator's permit under sub-paragraph (4)—

(a)vary the existing permit under paragraph 6 so that it includes such variations as the regulator considers necessary to take account of the transferred units and transferred activities; and the variations have effect from the transfer date, which must be set out in the existing permit; and

(b)by giving notice to the transferring operator, cancel the permit held by the transferring operator so that the permit ceases to authorise regulated activities to be carried out from the transfer date.

[^F432 (5A) Where a permit is cancelled under sub-paragraph (5)(b), the regulator must give notice to the registry administrator as soon as reasonably practicable.^F432]

(6) In this paragraph, “ transfer date ” means the date agreed by the transferring operator, the new operator and the regulator as the date on which the transfer or partial transfer to the new operator is to take effect.

Transfer of permits: underreporting discovered after transfer_I134

10.—(1) This paragraph applies where—

(a)after the transfer of a greenhouse gas emissions permit under paragraph 9 takes effect, the regulator becomes aware, following a determination of reportable emissions under article 45, of an error in a report submitted for a scheme year by the transferring operator under the monitoring and reporting conditions of the permit; and

(b)as a result of the error, the transferring operator failed to comply with the surrender condition of the permit in respect of the scheme year to which the error relates.

(2) The regulator must give notice to the transferring operator of the error as soon as reasonably practicable.

(3) The transferring operator must within 1 month of the notice effect a transfer to the new operator of allowances equal to the reportable emissions in respect of which, as a result of the error, the transferring operator failed to comply with the surrender condition of the permit.

(4) The new operator must surrender the allowances within 1 month after the transfer of the allowances.

(5) In sub-paragraph (1), the reference to the transfer of a greenhouse gas emissions permit under paragraph 9 includes a reference to an application for a transfer of a permit to which effect is given by a variation of the new operator's existing permit under [^F433sub-paragraph (3A) or (5)^F433] of that paragraph.

[^F434Installation to be treated as ceasing operation: regulator’s notice

10A.—(1) Where the regulator gives a notice under sub-paragraph (2) to the operator of an installation at which all regulated activities authorised by the permit have ceased to be carried out, the installation must be treated as having ceased operation for the purposes of both this Order and the Activity Level Changes Regulation on the last day on which a regulated activity was carried out at the installation.

(2) A notice under this sub-paragraph is a notice that states that the regulator considers that all regulated activities authorised by the permit have permanently ceased to be carried out at the installation.

(3) The regulator may give a notice under sub-paragraph (2) if, at any time during which all regulated activities authorised by the permit have ceased to be carried out at an installation, the operator fails to satisfy the regulator (whether in accordance with the cessation condition referred to in paragraph 4(8) or otherwise) that each of the following conditions is met in respect of the installation—

(a)the operator intends for one or more of the regulated activities authorised by the permit to resume at the installation;

(b)either—

(i)the installation is technically capable of resuming those regulated activities without physical changes being made; or

(ii)the operator intends for the technical capability required for those regulated activities to resume to be restored at the installation.

(4) To avoid doubt, nothing in this paragraph prevents the regulator from giving a notice under sub-paragraph (2) in circumstances in which the regulator has previously confirmed that the regulator was, at that time, satisfied that the conditions referred to in sub-paragraph (3) were met in respect of the installation.

(5) The regulator may withdraw a notice under sub-paragraph (2) at any time by giving notice of the withdrawal to the operator.^F434]

Surrender of permits_I135

11.[^F435—(1) Where a permit authorises a regulated activity to be carried out at an installation which has ceased operation, the operator must apply to the regulator to surrender the permit on or before—

(a)the relevant surrender date; or

(b)such later date as may be agreed by the regulator.

(1A) For the purposes of sub-paragraph (1), the “relevant surrender date” is—

(a)where the regulator has given a notice to the operator of the installation under paragraph 10A(2) (installation to be treated as ceasing operation), the last day of the period of 1 month beginning with the date on which the notice is given;

(b)in any other case, the latest of—

(i)the last day of the period of 1 month beginning with the date on which the installation ceased operation;

(ii)the last day of the period of 1 month beginning with the date on which the operator no longer intends for one or more of the regulated activities authorised by the permit to be resumed at the installation; and

(iii)the last day of the period of 1 month beginning with the day after the date on which the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025 is made.^F435]

[^F436 (2) Subject to sub-paragraph (1), an operator may apply to the regulator to surrender a permit if at any time all regulated activities authorised to be carried out by that permit have ceased to be carried out.^F436]

(3) Where the regulator grants an application to surrender a permit under sub-paragraph (1) or (2), the regulator must give a notice (a “surrender notice”) to the operator.

(4) The surrender notice must—

(a) set out a date (the “end date”) on which the surrender of the permit takes effect;

(b)require the operator to—

(i) submit to the regulator on or before a date set out in the notice a report of the installation's reportable emissions in the period beginning on 1st January in the scheme year (the “end year”) in which the end date falls and ending on the end date;

(ii)ensure that the report is prepared and verified in accordance with the monitoring and reporting conditions of the permit;

[^F437 (iii)where the permit is a greenhouse gas emissions permit, on or before a date set out in the notice (which must not be before 30th April in the end year), surrender allowances equal to ^F438...—

(aa)the installation’s reportable emissions in the period referred to in sub-paragraph (i); ^F439...

^F440(bb). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F437]

(5) The operator must comply with the requirements of the surrender notice.

(6) Where a surrender notice is given—

(a)the permit ceases to be in force on the end date (and therefore ceases to authorise a regulated activity to be carried out at the installation from that date); but

(b)the conditions of the permit continue to have effect as if the permit were in force until the regulator certifies that the conditions of the permit and the requirements of the surrender notice[^F441 , and of any deficit notice given to the operator of the installation under article 44A,^F441] have been complied with [^F442or that there is no reasonable prospect of their being complied with^F442] .

(7) The reference in sub-paragraph (6)(b) to the conditions of the permit that continue to have effect includes a reference to conditions relating to reportable emissions[^F443 , or reports on activity levels,^F443] before the end year that the operator is required to comply with on or before a date that may fall after the end date (for example, in the case of a greenhouse gas emissions permit, the [^F444conditions referred to in paragraph 4(2)(b) and (6)(b)^F444] and the surrender condition or, in the case of a hospital or small emitter permit, the condition referred to in paragraph 11(2)(b) of Schedule 7).

^F445(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revocation of permits_I136

12.—(1) Where the operator of an installation fails to apply to surrender the installation's permit under paragraph 11(1) on or before the date referred to in that sub-paragraph, the regulator must revoke the permit as soon as reasonably practicable after that date.

(2) Where a permit authorises a regulated activity to be carried out at an installation that is included in the ultra-small emitter list for 2026-2030, the regulator must revoke the permit so that it ceases to be in force at the end of 31st December 2025.

(3) The regulator may revoke a permit if—

(a)the operator fails to comply with—

(i)a requirement imposed on the operator by or under—

(aa)this Order;

(bb)the Monitoring and Reporting Regulation 2018;

(cc)the Verification Regulation 2018;

[^F446 (dd)the Free Allocation Regulation;

(ee)the Activity Level Changes Regulation.^F446]

(ii)a condition of the permit; or

(b)^M53the operator of an installation fails to pay the charge for maintaining the permit in force .

(4) A permit is revoked by giving a notice (a “revocation notice”) to the operator.

(5) The revocation notice must—

(a)set out a date (the “end date”) on which the revocation of the permit takes effect;

(b)require the operator to—

(i)submit to the regulator on or before a date set out in the notice a report of the installation's reportable emissions in the period beginning on 1st January in the scheme year (the “end year”) in which the end date falls and ending on the end date;

(ii)ensure that the report is prepared and verified in accordance with the monitoring and reporting conditions of the permit;

[^F447 (iii)where the permit is a greenhouse gas emissions permit, on or before a date set out in the notice (which must not be before 30th April in the end year), surrender allowances equal to ^F448...—

(aa)the installation’s reportable emissions in the period referred to in sub-paragraph (i); ^F449...

^F450(bb). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F447]

(6) The operator must comply with the requirements of the revocation notice.

(7) Where a revocation notice is given—

(a)the permit ceases to be in force on the end date (and therefore ceases to authorise a regulated activity to be carried out at the installation from that date); but

(b)the conditions of the permit continue to have effect as if the permit were in force until the regulator certifies that the conditions of the permit and the requirements of the revocation notice [^F451, and of any deficit notice given to the operator of the installation under article 44A,^F451] have been complied with [^F452or that there is no reasonable prospect of their being complied with^F452] .

(8) The reference in sub-paragraph (7)(b) to the conditions of the permit that continue to have effect includes a reference to conditions relating to reportable emissions[^F453 , or reports on activity levels,^F453] before the end year that the operator is required to comply with on or before a date that may fall after the end date (for example, in the case of a greenhouse gas emissions permit, the [^F454conditions referred to in paragraph 4(2)(b) and (6)(b)^F454] and the surrender condition or, in the case of a hospital or small emitter permit, the condition referred to in paragraph 11(2)(b) of Schedule 7).

^F455(8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) A regulator who gives a revocation notice may, by notice to the operator, withdraw the revocation notice at any time before the end date.

Article 26(4)

SCHEDULE 7 Hospitals and small emitters

PART 1 Preliminary

Interpretation_I137

1.—(1) In this Schedule—

“ conversion notice ” has the meaning given in paragraph 23 [^F456 , 23A or 23B ^F456] ;

“ emissions report ” has the meaning given in paragraph 11(2)(b);

“ emissions target ”, in relation to an installation, means a target for the installation's reportable emissions (excluding emissions from biomass) set out in the installation's hospital or small emitter permit; and an emissions target for a scheme year is the emissions target for that year set out in the permit;

“ hospital-qualifying installation ” means—

(a)

in relation to an installation included in the hospital and small emitter list for 2021-2025, an installation stated in that list to be a “hospital” by the inclusion of “Y” in the entry relating to the installation in the column headed “Hospital (YES/NO)”;

(b)

in relation to an installation included in the hospital and small emitter list for 2026-2030, an installation that meets condition A (whether or not the installation also meets condition B or C) (see paragraphs 5 and 6);

(c)

in relation to an installation included in the ultra-small emitter list for 2021-2025 or the ultra-small emitter list for 2026-2030—

(i)

in respect of which a notice under paragraph 7(2) of Schedule 8 is given; and

(ii)

that is a hospital or small emitter for a scheme year by virtue of paragraph 4 of this Schedule,

an installation that primarily provided services to a hospital in the scheme year before the notice was given;

“ maximum amount ” means 24,999 tonnes of carbon dioxide equivalent.

(2) For the purposes of this Order, in determining whether or not an installation's reportable emissions or an estimate of reportable emissions exceed the maximum amount or an emissions target and in calculating an installation's emissions target based on reportable emissions or an estimate, emissions from biomass must be excluded.

Meaning of installation that primarily provides services to a hospital in scheme year_I138

2.—(1) For the purposes of this Schedule, an installation is an installation that primarily provides services to a hospital in a scheme year if at least 85% of the heat produced by the installation in that year is used by or supplied to one or more hospitals.

(2) In sub-paragraph (1), “ hospital ” means—

(a)an institution for the reception and treatment of persons suffering from illness;

(b)a maternity home;

(c)an institution for the reception and treatment of persons during convalescence or persons requiring medical rehabilitation;

(d)a clinic, dispensary or out-patient department maintained in connection with an establishment referred to in any of paragraphs (a) to (c);

(e)a research or teaching facility that is associated with an establishment referred to in any of paragraphs (a) to (c) that has as its primary purpose medical research or medical teaching;

(f)any other facility that has as its primary purpose the provision of such services as are necessary to maintain the proper functioning of an establishment referred to in any of paragraphs (a) to (d), including in particular—

(i)blood transfusion services;

(ii)catering services;

(iii)laundry services;

(iv)medical sanitisation services.

(3) In sub-paragraph (2), “ illness ” includes any disorder or disability of the mind and any injury or disability requiring medical or dental treatment or nursing.

PART 2 Hospital or small emitter status

Hospital or small emitter status_I139

3.—(1) This paragraph and paragraph 4 apply to determine whether or not an installation is a hospital or small emitter for a scheme year.

^M54 (2) Subject to sub-paragraphs (3) and (4), an installation is a hospital or small emitter for the scheme years in the 2021-2025 allocation period if the installation is included in the list (the “hospital and small emitter list for 2021-2025”) of installations to be excluded from the EU ETS under Article 27 of the Directive from 1st January 2021 published for the purposes of the EU ETS on the website of SEPA on 28th May 2020 .

(3) Where a conversion notice is given to the operator of the installation stating that the installation is not a hospital or small emitter for a scheme year in the 2021-2025 allocation period, the installation is not a hospital or small emitter for that scheme year or subsequent scheme years in the allocation period.

(4) Where a regulated activity does not begin to be carried out before 1st November 2020 at an installation that is included in the hospital and small emitter list for 2021-2025—

(a)the installation is not a hospital or small emitter for the scheme years in the 2021-2025 allocation period; and

(b)for the purposes of this Order, the hospital and small emitter list for 2021-2025 must be treated as not including the installation.

(5) Subject to sub-paragraphs (6) and (7), an installation is a hospital or small emitter for the scheme years in the [^F4572026-2030 period^F457] if the installation is included in the hospital and small emitter list for 2026-2030.

(6) Where a conversion notice is given to the operator of the installation stating that the installation is not a hospital or small emitter for a scheme year in the [^F4572026-2030 period^F457] , the installation is not a hospital or small emitter for that scheme year or subsequent scheme years[^F458 in the period^F458] .

(7) Where a regulated activity does not begin to be carried out before 1st November 2025 at an installation that is included in the hospital and small emitter list for 2026-2030—

(a)the installation is not a hospital or small emitter for the scheme years in the [^F4572026-2030 period^F457] ; and

(b)for the purposes of this Order, the hospital and small emitter list for 2026-2030 must be treated as not including the installation.

Hospital or small emitter status: former ultra-small emitters_I140

4.—(1) This paragraph applies to an installation if—

(a)the installation is included in—

(i)the ultra-small emitter list for 2021-2025; or

(ii)the ultra-small emitter list for 2026-2030;

(b) the regulator gives notice to the operator of the installation under paragraph 7(2) of Schedule 8 stating that the installation will not be an ultra-small emitter for a scheme year (the “relevant scheme year”); and

(c)the regulator gives notice to the operator under paragraph 7(5)(b) of that Schedule that the regulator considers that the installation is not an ineligible installation.

(2) Subject to paragraph 3(3), an installation to which this paragraph applies by virtue of sub-paragraph (1)(a)(i) is a hospital or small emitter for the relevant scheme year and for subsequent scheme years in the 2021-2025 allocation period.

(3) Subject to paragraph 3(6), an installation to which this paragraph applies by virtue of sub-paragraph (1)(a)(ii) is a hospital or small emitter for the relevant scheme year and for subsequent scheme years in the [^F4572026-2030 period^F457] .

(4) For the purpose of this paragraph, an installation is an ineligible installation if—

(a)where the activity referred to in column 1 of the first entry in table C in Schedule 2 (combustion of fuels) is carried out at the installation, the installation's rated thermal input is 35 megawatts or above—

(i)where the installation is included in the ultra-small emitter list for 2021-2025, in any of the scheme years (within the meaning of GGETSR 2012) beginning on 1st January 2016, 2017 or 2018;

(ii)where the installation is included in the ultra-small emitter list for 2026-2030, in any of the 2021, 2022 or 2023 scheme years; and

(b)the installation is not an installation that primarily provided services to a hospital in the scheme year preceding the scheme year in which the notice under paragraph 7(2) of Schedule 8 is given.

Obtaining hospital or small emitter status for [^F4572026-2030 period^F457] _I141

5.—(1) The operator of an installation who wishes to apply for the installation to be a hospital or small emitter for the scheme years in the [^F4572026-2030 period^F457] must submit the following to the regulator—

(a)details of the installation, including details of any permit in force;

(b)evidence that the installation meets condition A, B or C (see paragraph 6);

(c)where the operator submits evidence that the installation meets condition A, the evidence and any estimate required by paragraph 6(3);

(d)where the operator submits evidence that the installation meets condition C, any estimate required by paragraph 6(6).

(2) An application—

(a)may not be made before 1st April [^F4592025^F459] ;

(b)must be made on or before 30th June [^F4592025^F459] .

(3) After receiving an application, the regulator must on or before [^F46031st August 2025^F460] —

(a)make a preliminary assessment of whether or not the installation meets condition A, B or C; and

(b)send the preliminary assessment and the reasons for it to the UK ETS authority.

(4) After receiving the preliminary assessment—

(a)the UK ETS authority must make a final assessment of whether or not the installation meets condition A, B or C; and

(b) if the UK ETS authority considers that the installation meets condition A, B or C, the UK ETS authority must include the installation in a list (the “hospital and small emitter list for 2026-2030”).

(5) The UK ETS authority must publish the hospital and small emitter list for 2026-2030 on or before [^F46117th October^F461] .

(6) Evidence of an installation's historic reportable emissions may not be taken into account for the purposes of assessing whether or not an installation meets condition B or C unless the evidence is—

(a)verified [^F462as satisfactory^F462] in accordance with the Verification Regulation 2018; or

(b)where relevant, set out in an emissions report accompanied by the declaration referred to in paragraph 11(2)(b)(ii).

(7) An application may not be made under this paragraph and paragraph 3 of Schedule 8.

Obtaining hospital or small emitter status for [^F4572026-2030 period^F457] : Conditions A, B and C

6.—(1) This paragraph applies for the purposes of paragraph 5.

Condition A

(2) Condition A is that the installation—

(a)is an installation that primarily provides services to a hospital in the [^F4632024^F463] scheme year; or

(b)if a regulated activity has not begun to be carried out at the installation at the date of the application—

(i)a regulated activity will begin to be carried out at the installation before 1st November 2025; and

(ii)the installation will be an installation that primarily provides services to a hospital after that date.

(3) Where the operator submits evidence that the installation meets condition A, the operator must also submit—

(a)if a regulated activity begins to be carried out at the installation on or before 1st January 2021, evidence of—

(i)the installation's reportable emissions in each of the 2021, 2022 and 2023 scheme years, verified as mentioned in paragraph 5(6);

(ii)where the activity referred to in column 1 of the first entry in table C in Schedule 2 (combustion of fuels) is carried out at the installation, the installation's rated thermal input in each of those years;

(b)in any other case—

(i)where a regulated activity has begun to be carried out at the installation at the date of the application, such evidence of the matters referred to in paragraph (a)(i) and (ii) as is available at the date of the application; and

(ii)where the evidence submitted under sub-paragraph (i) does not include evidence of reportable emissions for a complete scheme year, an estimate of the installation's reportable emissions in the 2026 scheme year.

Condition B

(4) Condition B is that—

(a)a regulated activity begins to be carried out at the installation on or before 1st January 2021;

(b)the installation's reportable emissions in each of the 2021, 2022 and 2023 scheme years do not exceed the maximum amount; and

(c)where the activity referred to in column 1 of the first entry in table C in Schedule 2 (combustion of fuels) is carried out at the installation, the installation's rated thermal input is below 35 megawatts in each of those years.

Condition C _I142

(5) Condition C is that—

(a)if a regulated activity is carried out at the installation at the date of the application, the regulated activity began to be carried out at the installation after 1st January 2021;

(b)if a regulated activity has not begun to be carried out at the installation at the date of the application, a regulated activity will begin to be carried out at the installation before 1st November 2025;

(c)the installation's reportable emissions—

(i)are not likely to exceed the maximum amount in each of the scheme years in the [^F4572026-2030 period^F457] ; and

(ii)if a regulated activity has begun to be carried out at the installation at the date of the application, do not exceed the maximum amount in each of the scheme years for which, at the date of the application, evidence of reportable emissions is available; and

(d)where the activity referred to in column 1 of the first entry in table C in Schedule 2 (combustion of fuels) is carried out at the installation, the installation's rated thermal input—

(i)is likely to be below 35 megawatts in each of the scheme years in the [^F4572026-2030 period^F457] ; and

(ii)if a regulated activity has begun to be carried out at the installation at the date of the application, is below 35 megawatts in each of the scheme years for which, at the date of the application, evidence of rated thermal input is available.

(6) Where the evidence submitted under sub-paragraph (5) does not include evidence of reportable emissions for a complete scheme year, the operator must also submit an estimate of the installation's reportable emissions in the 2026 scheme year.

PART 3 Hospital or small emitter permits

Hospital or small emitter permits: application_I143

^M557.—(1) The operator of an installation that is a hospital or small emitter for a scheme year may apply to the regulator for a hospital or small emitter permit to come into force in that year .

(2) But an application may not be made if a permit for the installation is already in force.

(3) In sub-paragraph (2), “ permit ” includes a permit within the meaning of GGETSR 2012 to which paragraph 1 of Schedule 11 applies (permits to be converted).

Hospital or small emitter permits: content of application_I144

8. An application for a hospital or small emitter permit must contain the matters set out in paragraph 2 of Schedule 6, except for the uncertainty assessment referred to in sub-paragraph (1)(g)(ii) of that paragraph.

[^F464Hospital or small emitter permits: issue of permit

9. A hospital or small emitter permit for an installation may be issued only if—

(a)the application is made for a permit to come into force in a scheme year for which the installation is a hospital or small emitter;

(b)a monitoring plan has been approved in relation to the installation under the Monitoring and Reporting Regulation 2018; and

(c)the regulator considers that from the date on which the permit comes into force the operator of the installation will be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of the permit.^F464]

Hospital or small emitter permits: conversion of existing greenhouse gas emissions permit for [^F4572026-2030 period^F457] _I145

10.—(1) This paragraph applies where a greenhouse gas emissions permit is in force for an installation that is included in the hospital and small emitter list for 2026-2030.

(2) The regulator must convert the greenhouse gas emissions permit into a hospital or small emitter permit with effect from 1st January 2026 by varying it under paragraph 6 of Schedule 6, so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 11.

(3) When varying a permit under sub-paragraph (2), the regulator may make only such variations as the regulator considers necessary in consequence of the installation's inclusion in the hospital and small emitter list for 2026-2030.

(4) The conversion of the permit does not affect the obligations of the operator under the greenhouse gas emissions permit in respect of specified emissions before 1st January 2026.

Hospital or small emitter permits: content of permit_I146

11.—(1) A hospital or small emitter permit must contain—

(a)the name and postal address in the United Kingdom (including postcode) of the operator and any other address for correspondence included by the operator in the application;

(c)a description of the installation, the regulated activities to be carried out at the installation and the specified emissions from those activities;

(d)a description of the site and the location of the installation on the site;

(e)the date on which the permit comes into force;

(f)an emissions target for the installation, calculated by the regulator in accordance with paragraphs 15 to 17—

(i)subject to paragraph 18, where the installation is included in the hospital and small emitter list for 2021-2025, for each scheme year in the 2021-2025 allocation period;

(ii)subject to paragraph 18, where the installation is included in the hospital and small emitter list for 2026-2030, for each scheme year in the [^F4572026-2030 period^F457] ;

(iii)where the installation is included in the ultra-small emitter list for 2021-2025, for each scheme year in the 2021-2025 allocation period for which the installation is a hospital or small emitter (see paragraph 4(2));

(iv)where the installation is included in the ultra-small emitter list for 2026-2030, for each scheme year in the [^F4572026-2030 period^F457] for which the installation is a hospital or small emitter (see paragraph 4(3));

(g)the monitoring plan—

(i)^F465where an application is made for the permit, approved in relation to the installation under ... the Monitoring and Reporting Regulation 2018;

(ii)^F465^,^F465where an existing permit is converted into a hospital or small emitter permit, approved in relation to the installation under ... the Monitoring and Reporting Regulation 2012 or ... the Monitoring and Reporting Regulation 2018 for the purpose of monitoring reportable emissions at the installation immediately before the hospital or small emitter permit comes into force;

(h)the monitoring and reporting conditions (see sub-paragraph (2));

[^F466 (ha)the cessation condition referred to in paragraph 4(8) of Schedule 6;^F466]

(i)any other conditions that the regulator considers appropriate to include in the permit.

(2) The monitoring and reporting conditions are—

(a)a condition requiring the operator to monitor the installation's reportable emissions in each scheme year for which the installation is a hospital or small emitter in accordance with—

(i)the Monitoring and Reporting Regulation 2018; and

(ii)the monitoring plan (including the written procedures supplementing the monitoring plan);

(b) a condition requiring the operator to prepare in accordance with the Monitoring and Reporting Regulation 2018 a report (the “emissions report”) of the installation's reportable emissions in each scheme year for which the installation is a hospital or small emitter that is—

(i)verified [^F467as satisfactory^F467] in accordance with the Verification Regulation 2018; or

(ii)accompanied by a declaration stating that—

(aa)in preparing the emissions report the operator has complied with the Monitoring and Reporting Regulation 2018;

(bb)the operator has complied with the monitoring plan; and

(cc)the emissions report is free from material misstatements,

and to submit the emissions report[^F468 and the verification report (where sub-paragraph (i) applies) or declaration (where sub-paragraph (ii) applies)^F468] to the regulator on or before 31st March in the following year; and

(c)any further conditions that the regulator considers necessary to give proper effect to the Monitoring and Reporting Regulation 2018 or the Verification Regulation 2018.

(3) A hospital or small emitter permit for a hospital-qualifying installation must contain conditions requiring the operator—

(a)if the installation ceases to be an installation that primarily provides services to a hospital in a scheme year for which the installation is a hospital or small emitter, to give notice to the regulator on or before 31st March in the following year;

(b)except where the operator gives notice under paragraph (a)—

(i)to maintain records demonstrating that the installation continues to be an installation that primarily provides services to a hospital; and

(ii)to comply with requests from the regulator to inspect the records for the purpose of verifying the accuracy of the records and of the emissions report.

(4) A hospital or small emitter permit for an installation that is not a hospital-qualifying installation must contain a condition requiring the operator, if the installation's reportable emissions in a scheme year for which the installation is a hospital or small emitter exceed the maximum amount, to give notice to the regulator on or before 31st March in the following year.

(5) This paragraph is subject to paragraph 14.

Hospital or small emitter permits: effect of permit, etc._I147

12.—(1) A hospital or small emitter permit for an installation—

(a)comes into force on the date set out in the permit;

(b)authorises the regulated activities set out in the permit to be carried out at the installation.

(2) The operator of the installation must comply with the conditions of the permit.

Hospitals and small emitters: modifications to Monitoring and Reporting Regulation 2018_I148

13.—(1) Where an installation is a hospital or small emitter for a scheme year, the Monitoring and Reporting Regulation 2018 has effect with the following modifications (in addition to the modifications in Schedule 4).

^F469(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Article 19 is to be read as if—

(a) in paragraph 2 for the words from “in one of the following categories” to the end there were substituted “ as a category A installation ” ;

(b)paragraph 5 were omitted.

[^F470 (4) Article 38 is to be read as if—

(a)in paragraph 2—

(i)in the first subparagraph “, but, subject to paragraph 2a, the emission factor for bioliquids shall be zero only if the sustainability criteria set out in Article 17(2) to (5) of Directive 2009/28/EC have been fulfilled” were omitted;

(ii) in the second subparagraph for “each fuel” there were substituted “a mixed fuel” ;

(b)paragraph 2a were omitted.^F470]

(5) Article 47 is to be read as if—

(a)every installation that is a hospital or small emitter for a scheme year were an installation to which Article 47 applies (that is to say, an installation that operates with low emissions, disregarding the second subparagraph of paragraph 1 of that Article);

[^F471 (aa)in paragraph 3—

(i) for “an improvement report” there were substituted “a report” ;

(ii) after “in response to” there were inserted “outstanding non-conformities or” ; ^F471]

(b)paragraph 8 were omitted.

(6) Where an emissions report submitted to the regulator under paragraph 11(2)(b) is accompanied by a declaration referred to in paragraph 11(2)(b)(ii) (and is not [^F472verified as satisfactory in accordance^F472] with the Verification Regulation 2018), in the Monitoring and Reporting Regulation 2018—

(a)Annex 10 must be read as if section 1(2) were omitted;

(b)a reference to a verified annual emission report is to be read as a reference to the emissions report;

(c)a reference to verified annual emissions or verified emissions is to be read as a reference to the reportable emissions reported in the emissions report;

(d)a reference to a verifier is to be read as a reference to the regulator;

(e)a reference to verifying or verification is to be read as a reference to auditing the reportable emissions reported in the emissions report by the regulator in accordance with the regulator's procedures for auditing reportable emissions of installations, the operators of which submit emissions reports under paragraph 11(2)(b)(ii);

(f)a reference to a verification report is to be read as a reference to the record of such an audit given to the operator by the regulator.

Former ultra-small emitters: hospital or small emitter permits coming into force after beginning of scheme year_I149

14.—(1) This paragraph applies where a hospital or small emitter permit for an installation referred to in paragraph 4(2) or (3) comes into force on a day after 1st January in the relevant scheme year.

(2) References in paragraph 11(2) to a scheme year for which the installation is a hospital or small emitter must be treated as not including a reference to the part of the relevant scheme year before the date on which the permit comes into force.

(3) The installation's emissions target for the relevant scheme year is the emissions target calculated under paragraph 16 or, as the case may be, 17 multiplied by the factor set out in sub-paragraph (4).

(4) The factor is (Y – D)/Y, where—

Y is the number of days in the relevant scheme year;
D is the number of days in the relevant scheme year before the date on which the permit comes into force.

(5) Paragraph 19 has effect as if the reference to the installation's reportable emissions in the relevant scheme year were a reference to the installation's reportable emissions in the relevant scheme year on and after the date on which the permit comes into force.

(6) In this paragraph, “ relevant scheme year ” has the meaning given in paragraph 4(1)(b).

PART 4 Emissions targets

Emissions targets other than for hospital-qualifying installations may not exceed maximum amount_I150

15.—(1) Except in the case of a hospital-qualifying installation, an emissions target for a scheme year may not exceed the maximum amount.

(2) This paragraph overrides paragraphs 16 and 17.

Emissions targets for 2021-2025 allocation period

16.—(1) This paragraph applies for the purpose of calculating an installation's emissions targets for the scheme years in the 2021-2025 allocation period under paragraph 11(1)(f)(i) and (iii).

(2) Where a regulated activity began to be carried out at the installation before 2019, the installation's emissions target for a scheme year is the installation's relevant emissions multiplied by the reduction factor for the scheme year.

(3) For the purpose of sub-paragraph (2), the relevant emissions of an installation are—

(a)where a regulated activity began to be carried out at the installation before 2016, the sum of the installation's reportable emissions in 2016, 2017 and 2018 divided by 3;

(b)where a regulated activity began to be carried out at the installation in 2016, the sum of the installation's reportable emissions in 2017 and 2018 divided by 2;

(c)where a regulated activity began to be carried out at the installation in 2017, the installation's reportable emissions in 2018;

(d)where a regulated activity began to be carried out at the installation in 2018, the installation's reportable emissions in 2019.

(4) Where a regulated activity began to be carried out at the installation in 2019, the installation's emissions target—

(a)for the 2021 scheme year is the 2021 estimate multiplied by the reduction factor for the 2021 scheme year;

(b) for every other scheme year (the “relevant scheme year”) in the 2021-2025 allocation period is the installation's reportable emissions in 2020 multiplied by the reduction factor for the relevant scheme year.

(5) Where a regulated activity began to be carried out at the installation in the period beginning on 1st January 2020 and ending on 31st October 2020, the installation's emissions target—

(a)for the 2021 scheme year is the 2021 estimate multiplied by the reduction factor for the 2021 scheme year;

(b)for the 2022 scheme year is the 2021 estimate multiplied by the reduction factor for the 2022 scheme year;

(c) for every other scheme year (the “relevant scheme year”) in the 2021-2025 allocation period is the installation's reportable emissions in the 2021 scheme year multiplied by the reduction factor for the relevant scheme year.

(6) In sub-paragraphs (4) and (5), “ 2021 estimate ” means the conservative estimate of annual average emissions referred to in Article 19(4) of the Monitoring and Reporting Regulation 2012 used for the purposes of a monitoring plan submitted under that Regulation and contained in the application for a permit under GGETSR 2012 (see paragraph 1(1)(f) of Schedule 4 to GGETSR 2012).

(7) For the purpose of this paragraph, the reduction factor for a scheme year set out in column 1 of table D is the value set out in the corresponding entry in column 2.

Table D_I151

Column 1	Column 2
Scheme year	Reduction factor
2021	0.8697
2022	0.8461
2023	0.8224
2024	0.7988
2025	0.7751

(8) In this paragraph, a reference to reportable emissions is a reference to reportable emissions (within the meaning of GGETSR 2012 or this Order)—

(a)verified [^F473as satisfactory^F473] in accordance with the Verification Regulation 2012 or the Verification Regulation 2018;

[^F474 (aa)determined under regulation 44 of GGETSR 2012 or article 45 of this Order; or^F474]

(9) This paragraph is subject to paragraph 14.

Emissions targets for [^F4572026-2030 period^F457]

17.—(1) This paragraph applies for the purpose of calculating an installation's emissions targets for the scheme years in the [^F4572026-2030 period^F457] under—

(a)paragraph 11(1)(f)(ii) and (iv);

(b)paragraph 21.

(2) Where a regulated activity begins to be carried out at the installation before 2024, the installation's emissions target for a scheme year is the installation's relevant emissions multiplied by the reduction factor for the scheme year.

(3) For the purpose of sub-paragraph (2), the relevant emissions of an installation are—

(a)where a regulated activity begins to be carried out at the installation before 2021, the sum of the installation's reportable emissions in 2021, 2022 and 2023 divided by 3;

(b)where a regulated activity begins to be carried out at the installation in 2021, the sum of the installation's reportable emissions in 2022 and 2023 divided by 2;

(c)where a regulated activity begins to be carried out at the installation in 2022, the installation's reportable emissions in 2023;

(d)where a regulated activity begins to be carried out at the installation in 2023, the installation's reportable emissions in 2024.

(4) Where a regulated activity begins to be carried out at the installation in 2024, the installation's emissions target—

(a)for the 2026 scheme year is the 2026 estimate multiplied by the reduction factor for the 2026 scheme year;

(b) for every other scheme year (the “relevant scheme year”) in the [^F457 2026-2030 period ^F457] is the installation's reportable emissions in the 2025 scheme year multiplied by the reduction factor for the relevant scheme year.

(5) Where a regulated activity begins to be carried out at the installation in the period beginning on 1st January 2025 and ending on 31st October 2025, the installation's emissions target—

(a)for the 2026 scheme year is the 2026 estimate multiplied by the reduction factor for the 2026 scheme year;

(b)for the 2027 scheme year is the 2026 estimate multiplied by the reduction factor for the 2027 scheme year;

(c) for every other scheme year (the “relevant scheme year”) in the [^F457 2026-2030 period ^F457] is the installation's reportable emissions in the 2026 scheme year multiplied by the reduction factor for the relevant scheme year.

(6) In sub-paragraphs (4) and (5), “ 2026 estimate ” means the estimate of the installation's reportable emissions in the 2026 scheme year provided under—

(a)in the case of a hospital-qualifying installation, paragraph 6(3)(b);

(b)in any other case, paragraph 6(6).

(7) For the purpose of this paragraph, the reduction factor for a scheme year set out in column 1 of table E is the value set out in the corresponding entry in column 2.

Table E_I152

Column 1	Column 2
Scheme year	Reduction factor
2026	0.8882
2027	0.8602
2028	0.8322
2029	0.8043
2030	0.7763

(8) In this paragraph, a reference to reportable emissions is a reference to reportable emissions—

(a)^F476verified [^F475as satisfactory^F475] in accordance with the Verification Regulation 2018; ...

[^F477 (aa)determined under article 45; or^F477]

(b)where relevant, set out in an emissions report accompanied by the declaration referred to in paragraph 11(2)(b)(ii).

(9) This paragraph is subject to paragraph 14.

Emissions targets: calculation of later targets where initial targets based on estimates_I153

18.—(1) This paragraph applies where an installation's emission targets for the scheme years in [^F478the 2021-2025 allocation period or the 2026-2030 period^F478] are required to be calculated under—

(a)paragraph 16(4) or (5);

(b)paragraph 17(4) or (5).

(2) Paragraph 11(1)(f)(i) and (ii) do not require the installation's hospital or small emitter permit to contain emissions targets for scheme years (the “relevant scheme years”) for which, at the date of issue of the permit, the information required to calculate the emission targets is not available.

(3) As soon as reasonably practicable after the information to calculate the installation's emissions targets for the relevant scheme years becomes available, the regulator must vary the installation's hospital or small emitter permit under paragraph 6 of Schedule 6 by adding the emissions targets.

(4) But sub-paragraph (3) does not apply if the regulator has given a conversion notice to the operator of the installation, the effect of which is that the installation will not be a hospital or small emitter for the relevant scheme years.

Emissions targets: hospital or small emitters must not exceed targets_I154

19.—(1) The operator of an installation must ensure that the installation's reportable emissions in a scheme year for which the installation is a hospital or small emitter do not exceed the emissions target for that year.

(2) This paragraph is subject to paragraph 14.

[^F479Capacity 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 [^F457 2026-2030 period^F457] (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.

[^F480 (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.^F480]

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;

(c)evidence to enable the combined capacity utilisation factor to be calculated (see paragraph 19F);

(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 1

Calculate 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 2

Add 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.

(2) For the purposes of sub-paragraph (1)—

(a)the 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;

(b)where capacity decreases exceed capacity increases at a sub-installation, the net change in installed capacity must be a negative value;

(c)in 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.

(3) In this paragraph, “ relevant sub-installation ” means—

(a)the sub-installation to which the capacity increase relates;

(b)any 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 1

Calculate 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 2

Add up all calculations done under Step 1.

Step 3

Calculate the following for each sub-installation to which the capacity increase relates—

the capacity increase x the benchmark for the sub-installation.

Step 4

Add up all calculations done under Step 3.

Step 5

Divide the result of Step 2 by the result of Step 4.

The combined capacity utilisation factor is the result of Step 5.

(2) In 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.

(3) Where 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.

(4) In 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—

(a)

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—

(i)

where an application is made to increase an installation’s emissions targets for scheme years in the 2021-2025 allocation period [^F481 or the 2026 scheme year, for scheme years in that allocation period or that scheme year^F481] ;

(ii)

where an application is made to increase an installation’s emissions targets for scheme years in the [^F482 2027-2030 allocation period^F482] , for scheme years in that allocation period;

(b)

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—

(a)

in the case of a product benchmark sub-installation, for producing a product;

(b)

in the case of a district heating sub-installation or a heat benchmark sub-installation, for producing measurable heat;

(c)

in the case of a fuel benchmark sub-installation, for consuming fuel;

(d)

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;

(c)where a regulated activity began to be carried out at the installation in 2019 or 2020, 31st December 2020.

(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 [^F457 2026-2030 period^F457] , 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;

(c)where a regulated activity begins to be carried out at the installation in 2024 or 2025, 31st December 2025.

(5) But if the installation’s emissions targets for scheme years in the [^F457 2026-2030 period^F457] 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.^F479]

Emissions targets: banking overachieved target_I155

20. —(1) In this paragraph, an installation's “ bankable amount ”, in relation to a scheme year, means ET – RE, where—

ET is the installation's emissions target for that year;
RE is the reportable emissions stated in the installation's emissions report for that year.

(2) But if the installation's emissions target for a scheme year is calculated in accordance with any of the following provisions (emissions targets based on estimates), for the purposes of this paragraph the installation's bankable amount for that scheme year must be treated as zero—

(a)paragraph 16(4)(a);

(b)paragraph 16(5)(a) or (b);

(c)paragraph 17(4)(a);

(d)paragraph 17(5)(a) or (b).

(3) Subject to sub-paragraphs (5) and (6), where an installation's bankable amount for a scheme year (the “scheme year in question”) is greater than zero—

(a) the regulator may increase the installation's emissions target for the following scheme year (the “next scheme year”) by the bankable amount; and

(b)if the regulator does so, the regulator must vary the installation's hospital or small emitter permit under paragraph 6 of Schedule 6 by substituting the increased emissions target for the existing target.

(4) Subject to sub-paragraph (6), where the amount of reportable emissions stated in the installation's emissions report for the scheme year in question is amended following a determination of emissions under article 45, the regulator must—

(a)calculate the bankable amount for the scheme year in question as if RE in sub-paragraph (1) were the amount of reportable emissions for that year as amended following the determination; and

(b)where an increased emissions target for the next scheme year has been substituted under sub-paragraph (3)(b), further vary the permit under paragraph 6 of Schedule 6 by substituting a revised emissions target for that year, based on the revised calculation of the bankable amount under paragraph (a).

(5) Sub-paragraph (3) does not apply if the scheme year in question is—

(a)the 2025 scheme year;

(b)the 2030 scheme year.

(6) Except where the installation is a hospital-qualifying installation, if increasing the emissions target for the next 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.

Emissions targets: targets for [^F4572026-2030 period^F457] for hospital or small emitters in 2021-2025 allocation period_I156

21.—(1) This paragraph applies where—

(a)a hospital or small emitter permit is in force for an installation that contains emissions targets for a scheme year in the 2021-2025 allocation period; and

(b)the installation is included in the hospital and small emitter list for 2026-2030.

(2) The regulator must, on or before 31st December 2025—

(a)calculate an emissions target for the installation for each scheme year in the [^F4572026-2030 period^F457] ; and

(b)vary the installation's hospital or small emitter permit under paragraph 6 of Schedule 6 to include those emissions targets.

(3) But sub-paragraph (2) does not apply if the regulator has given a conversion notice to the operator of the installation (the effect of which is that the installation will not be a hospital or small emitter for the scheme years in the [^F4572026-2030 period^F457] ).

Emissions targets: errors_I157

22.—(1) This paragraph applies where the amount of an installation's reportable emissions used to calculate the installation's emission targets (including revised emissions targets under [^F483paragraph 19C or 20^F483] ) for scheme years in [^F484the 2021-2025 allocation period or the 2026-2030 period^F484] is amended following a determination of emissions under article 45.

^F485(2) The regulator may calculate revised emissions targets for the current and future scheme years in the ... period and, if the regulator does so, the regulator must vary the installation's hospital or small emitter permit under paragraph 6 of Schedule 6 to include those emissions targets.

^F486(3) In calculating revised emissions targets under sub-paragraph (2), the regulator may take account of what revised emissions targets for past scheme years in the ... period calculated under this paragraph might have been if the determination had been made earlier (but may not calculate revised emissions targets for past years).

(4) In this paragraph—

(a)a reference to reportable emissions used to calculate emissions targets for the 2021-2025 allocation period includes a reference to reportable emissions within the meaning of GGETSR 2012; and

(b)a reference to a determination of emissions under article 45 includes, in the case of reportable emissions referred to in paragraph (a), a reference to a determination of emissions under regulation 44(3) of GGETSR 2012 or Article 70(1) of the Monitoring and Reporting Regulation 2012.

[^F487Publication 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).^F487]

PART 5 End of hospital or small emitter status

End of hospital or small emitter status: ceasing to meet criteria_I158

23.—(1) Where—

(a)an installation (other than a hospital-qualifying installation) is a hospital or small emitter for any of the 2021, 2022, 2023, 2026, 2027 and 2028 scheme years; and

(b)the regulator considers that the installation's reportable emissions in any of those years exceed the maximum amount,

the regulator must, as soon as reasonably practicable, give a notice (a “conversion notice”) to the operator of the installation.

(2) Where the regulator considers that a hospital-qualifying installation ceases to be an installation that primarily provides services to a hospital in a scheme year (the “relevant scheme year”) for which the installation is a hospital or small emitter, the regulator must, as soon as reasonably practicable, give a notice (a “conversion notice”) to the operator of the installation.

(3) But sub-paragraph (2) does not apply—

(a)where the relevant scheme year is in the 2021-2025 allocation period and the installation was in operation in any of the 2016, 2017 and 2018 scheme years (within the meaning of GGETSR 2012), if—

(i)the installation's reportable emissions in each of those years did not exceed the maximum amount; and

(ii)where the activity referred to in column 1 of the first entry in table C in Schedule 2 (combustion of fuels) was carried out at the installation, the installation's rated thermal input was below 35 megawatts in each of those years.

(b)where the relevant scheme year is in the [^F4572026-2030 period^F457] and the installation was in operation in any of the 2021, 2022 and 2023 scheme years, if—

(i)the installation's reportable emissions in each of those years do not exceed the maximum amount; and

(4) Where a hospital or small emitter permit may be revoked under paragraph 12 of Schedule 6, the regulator may instead of revoking the permit give a notice (a “conversion notice”) to the operator of the installation.

[^F488End 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.^F488]

[^F489End of hospital or small emitter status: voluntary exit of status for 2027-2030 allocation period

23B.—(1) This paragraph applies where the operator of an installation included in the hospital and small emitter list for 2026-2030 notifies the regulator on or before 30th June 2026 as part of the second stage of an application for free allocation in the 2027-2030 allocation period under Article 4(1a)(b)(i) of the Free Allocation Regulation that—

(a)the operator wishes the application to proceed because the operator does not wish the installation to be a hospital or small emitter for the scheme years in the 2027-2030 allocation period; and

(b)the UK ETS authority informs the regulator under Article 15a(4) of that Regulation that the application is valid.

(2) The regulator must, as soon as reasonably practicable, give a notice (a “conversion notice”) to the operator. ^F489]

Conversion notices_I159

24.—(1) A conversion notice must—

(a)set out the grounds for the notice;

(b)state that the installation is not a hospital or small emitter for the scheme year following the year in which the notice is given;

(c) state that the operator must comply with the conditions of a greenhouse gas emissions permit from 1st January (the “date of conversion”) in the scheme year following the year in which the notice is given;

[^F490 (d)state that, unless the monitoring plan already complies with the Monitoring and Reporting Regulation 2018, the operator must apply to the regulator to vary the monitoring plan so that it does comply with that Regulation.^F490]

(2) Where a conversion notice is given, the regulator must convert, with effect from the date of conversion, the installation's hospital or small emitter permit (if any) into a greenhouse gas emissions permit by varying it under paragraph 6 of Schedule 6 so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 4 of Schedule 6.

[^F491 (3) Despite sub-paragraph (2)—

(a)where the monitoring plan does not already comply with the Monitoring and Reporting Regulation 2018, the regulator may revoke the permit under paragraph 12 of Schedule 6 instead of converting it if—

(i)the operator fails to apply to the regulator to vary the monitoring plan; or

(ii)the variations applied for are not such that the plan would comply with that Regulation;

(b)the regulator must revoke the permit instead of converting it if the regulator considers that the operator will not be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of a greenhouse gas emissions permit.^F491]

(4) When varying a permit, the regulator may make only such variations as the regulator considers necessary in consequence of the installation ceasing to be a hospital or small emitter.

(5) The conversion of the permit does not affect the obligations of the operator under the permit in respect of specified emissions before the date of conversion.

End of hospital or small emitter status: ceasing to meet criteria: publication_I160

25.—(1) The regulator must, as soon as reasonably practicable, inform the UK ETS authority about each installation in respect of which a conversion notice is given.

(2) The UK ETS authority must, from time to time, publish the information referred to in sub-paragraph (1).

End of hospital or small emitter status: end of allocation period_I161

26.—(1) The regulator must, [^F492as soon as reasonably practicable after the hospital and small emitter list for 2026-2030 is published and in any event on or before 31st October 2025,^F492] give notice to the operator of an installation to which sub-paragraph (2) applies—

(a)stating that the operator must comply with the conditions of a greenhouse gas emissions permit from 1st January 2026; and

[^F493 (b)stating that, unless the monitoring plan already complies with the Monitoring and Reporting Regulation 2018, the operator must apply to the regulator on or before 30th [^F494 November^F494] 2025 to vary the monitoring plan so that it does comply with that Regulation.^F493]

(2) This sub-paragraph applies to an installation that is a hospital or small emitter for the 2025 scheme year other than an installation that is included in—

(a)the hospital and small emitter list for 2026-2030; or

(b)the ultra-small emitter list for 2026-2030.

(3) Where a notice under sub-paragraph (1) is given, the regulator must convert, with effect from 1st January 2026, the installation's hospital or small emitter permit (if any) into a greenhouse gas emissions permit by varying it under paragraph 6 of Schedule 6 so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 4 of Schedule 6.

[^F495 (4) Despite sub-paragraph (3)—

(i)the operator fails to apply to the regulator on or before 30th [^F496 November^F496] 2025 to vary the monitoring plan; or

(ii)the variations applied for are not such that the plan would comply with that Regulation;

(5) When varying a permit, the regulator may make only such variations as the regulator considers necessary in consequence of the installation ceasing to be a hospital or small emitter.

(6) The conversion of the permit does not affect the obligations of the operator under the permit in respect of specified emissions before 1st January 2026.

Article 26(5)

SCHEDULE 8 Ultra-small emitters

Interpretation_I162

1. —(1) In this Schedule, “ maximum amount ” means 2,499 tonnes of carbon dioxide equivalent.

(2) For the purposes of this Order, in determining whether or not an installation's reportable emissions exceed the maximum amount, emissions from biomass must be excluded.

Ultra-small emitter status_I163

2.—(1) This paragraph applies to determine whether or not an installation is an ultra-small emitter for a scheme year.

^M56 (2) An installation is an ultra-small emitter for the scheme years in the 2021-2025 allocation period if the installation is included in the list (the “ultra-small emitter list for 2021-2025”) of installations to be excluded from the EU ETS under Article 27a of the Directive from 1st January 2021 published for the purposes of the EU ETS on the website of SEPA on 28th May 2020 .

(3) But if a notice under paragraph 7(2) is given to the operator of the installation stating that the installation is not an ultra-small emitter for a scheme year in the 2021-2025 allocation period, the installation is not an ultra-small emitter for that scheme year or subsequent scheme years in the allocation period.

(4) An installation is an ultra-small emitter for the scheme years in the [^F4972026-2030 period^F497] if the installation is included in the ultra-small emitter list for 2026-2030.

(5) But if a notice under paragraph 7(2) [^F498or 7A^F498] is given to the operator of the installation stating that the installation is not an ultra-small emitter for a scheme year in the [^F4972026-2030 period^F497] , the installation is not an ultra-small emitter for that scheme year or subsequent scheme years[^F499 in the period^F499] .

Obtaining ultra-small emitter status for [^F4972026-2030 period^F497] _I164

3.—(1) The operator of an installation who wishes to apply for the installation to be an ultra-small emitter for the scheme years in the [^F4972026-2030 period^F497] must submit the following to the regulator—

(a)details of the installation, including details of any permit in force;

(b)evidence that the installation meets the relevant condition.

(2) An application—

(a)may not be made before 1st April [^F5002025^F500] ;

(b)must be made on or before 30th June [^F5002025^F500] .

(3) After receiving an application, the regulator must on or before [^F50131st August 2025^F501] —

(a)make a preliminary assessment of whether or not the installation meets the relevant condition; and

(b)send the preliminary assessment and the reasons for it to the UK ETS authority.

[^F502 (4) The relevant condition is that—

(a)a regulated activity begins to be carried out at the installation on or before 1st January 2024; and

(b)the installation’s reportable emissions in each relevant scheme year do not exceed the maximum amount.

(4A) In sub-paragraph (4)(b), “ relevant scheme year ” means—

(a)if a regulated activity begins to be carried out at the installation on or before 1st January 2021, the 2021, 2022 and 2023 scheme years;

(b)if a regulated activity begins to be carried out at the installation in the period beginning with 2nd January 2021 and ending with 1st January 2022, the 2022, 2023 and 2024 scheme years;

(c)if a regulated activity begins to be carried out at the installation in the period beginning with 2nd January 2022 and ending with 1st January 2023, the 2023 and 2024 scheme years;

(d)if a regulated activity begins to be carried out at the installation in the period beginning with 2nd January 2023 and ending with 1st January 2024, the 2024 scheme year.^F502]

(5) After receiving the preliminary assessment—

(a)the UK ETS authority must make a final assessment of whether or not the installation meets the relevant condition; and

(b) if the UK ETS authority considers that the installation meets the relevant condition, the UK ETS authority must include the installation in a list (the “ultra-small emitter list for 2026-2030”).

(6) The UK ETS authority must publish the ultra-small emitter list for 2026-2030 on or before [^F50317th October^F503] 2025.

(7) Evidence of an installation's reportable emissions may not be taken into account for the purposes of assessing whether or not an installation meets the relevant condition unless the evidence is—

(a)verified [^F504as satisfactory^F504] in accordance with the Verification Regulation 2018; or

(b)where relevant, in an emissions report accompanied by the declaration referred to in paragraph 11(2)(b)(ii) of Schedule 7.

(8) An application may not be made under this paragraph and paragraph 5 of Schedule 7.

Obtaining ultra-small emitter status for [^F4972026-2030 period^F497] : modifications to Verification Regulation 2018 for ultra-small emitters in 2021-2025 allocation period_I165

4.—(1) For the purposes of paragraph 3(7)(a), where an installation is included in the ultra-small emitter list for the 2021-2025 allocation period, the Verification Regulation 2018 has effect with the following modifications.

(2) References in the Verification Regulation 2018—

(a)to the operator's report or emission report are to be read as references to the evidence of the installation's reportable emissions provided to the verifier by the operator for verification and intended to be submitted under paragraph 3(1)(b);

(b)to the monitoring plan or the monitoring plan approved by the regulator are to be read as references to the appropriate monitoring plan referred to in paragraph 5, including any modifications to the plan made under Article 14 of the Monitoring and Reporting Regulation 2018, as applied by paragraph 5(4) of this Schedule (even though such modifications do not require the approval of the regulator: see paragraph 5(5)).

^F505(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Article 3(13)(a) is to be read as if “the permit and” were omitted.

(5) Article 7 is to be read as if—

(a)in paragraph 4—

[^F506 (i) in point (a) the words from “and meets the requirements” to the end were omitted; ^F506]

(ii) in point (b) “the permit and” were omitted;

(b)in paragraph 5 the reference to non-compliance with the Monitoring and Reporting Regulation 2018 were a reference to non-compliance with the provisions of that Regulation referred to in paragraph 5(4) to (6) of this Schedule;

(c)paragraph 6 were omitted.

(6) Article 10(1) is to be read as if—

(a)point (a) were omitted;

(b) in point (b) “as well as any other relevant versions of the monitoring plan approved by the regulator, including evidence of the approval” were omitted;

(c)points [^F507(c) and^F507] (l) to (n) were omitted.

(7) Article 11 is to be read as if paragraph 4(c) were omitted.

(8) Article 17 is to be read as if paragraph 4 were omitted.

(9) Article 18(1) is to be read as if—

(a)the second subparagraph were omitted;

(b) in the third subparagraph for “is not able to obtain such approval in time” there were substituted “ uses methods other than those referred to in the first subparagraph ” .

(10) Article 19(1) is to be read as if for “ Implementing Regulation (EU) 2018/2066 ” there were substituted “ the monitoring plan ” .

(11) Article 21(1) is to be read as if after “verification process” there were inserted “ but at least once during the 2021-2025 allocation period (as defined in the Greenhouse Gas Emissions Trading Scheme Order 2020 ) ” .

(12) Article 22 is to be read as if—

(a)references to non-compliance with the Monitoring and Reporting Regulation 2018 were references to non-compliance with the provisions of that Regulation referred to in paragraph 5(4) to (6) of this Schedule;

(b) in paragraph 1 in the third subparagraph “notify the regulator and” were omitted.

(13) Article 27 is to be read as if—

(b)in paragraph 3—

(i)point (n) were omitted;

(ii)for point (p) there were substituted—

“(p)a confirmation whether the method used to complete the data gap pursuant to the last subparagraph of Article 18(1) is conservative and whether it does or does not lead to material misstatements;”.

(14) Article 29(1) is to be read as if—

(a)the reference to the verification report related to the previous monitoring period were a reference to—

(i)the verification report under [^F508Commission Implementing Regulation (EU) 2018/2067 (as it had effect in EU law)^F508] in respect of the scheme year (within the meaning of GGETSR 2012) beginning on 1st January 2020; or

(ii)where the operator has previously provided evidence of the installation's reportable emissions in the [^F5092021-2025^F509] allocation period to the verifier for verification for the purposes of submission under paragraph 3(1)(b) of this Schedule, the verifier's last report under the Verification Regulation 2018 (as modified by this paragraph) on that evidence;

(b)“according to the requirements on the operator referred to in Article 69(4) of Implementing Regulation (EU) 2018/2066, where relevant” were omitted;

(15) The Verification Regulation 2018 is to be read as if Articles 30 to 32 were omitted.

Duty to monitor reportable emissions, etc._I166

5.—(1) Where an installation is an ultra-small emitter for a scheme year, the operator of the installation must monitor the installation's reportable emissions in the scheme year in accordance with the appropriate monitoring plan.

(2) The appropriate monitoring plan is—

(a)^F510the monitoring plan approved in relation to the installation under ... the Monitoring and Reporting Regulation 2018 for the 2025 scheme year, including—

(i)any modifications approved by the regulator in that scheme year; and

(ii)any modifications that are not significant (within the meaning of Article 15(3) of that Regulation) notified to the regulator on or before 31st December 2025; or

(b)^F510if there is no such monitoring plan, the monitoring plan approved in relation to the installation under ... the Monitoring and Reporting Regulation 2012 for the purposes of the EU ETS for the scheme year (within the meaning of GGETSR 2012) beginning on 1st January 2020, including—

(i)any modifications approved by the regulator in that scheme year; and

(ii)any modifications that are not significant (within the meaning of Article 15(3) of that Regulation) notified to the regulator on or before 31st December 2020.

(3) Subject to sub-paragraphs (4) to (6), where an installation is an ultra-small emitter for a scheme year, the Monitoring and Reporting Regulation 2018 does not apply to the monitoring or reporting of emissions of greenhouse gases from the installation in the scheme year.

(4) Article 14 of the Monitoring and Reporting Regulation 2018 applies to the operator of an installation that is an ultra-small emitter for a scheme year, but is to be read as if—

(a)references to the monitoring plan were references to the appropriate monitoring plan;

(b) in paragraph 1 “, and whether the monitoring methodology can be improved” were omitted;

(c)in paragraph 2—

(i) after “the following situations” there were inserted “ and those referred to in Article 15(3)(c), (f) and (i) ” ;

(ii)points (b) and (d) to (f) were omitted.

(5) Any modifications to the appropriate monitoring plan under Article 14 of the Monitoring and Reporting Regulation 2018 must be made in accordance with the provisions of that Regulation; but this sub-paragraph does not require—

(a)the operator to give notice of the modifications to the regulator;

(b)the regulator to approve the modifications;

(c)the regulator to assess whether a monitoring methodology is technically feasible or would incur unreasonable costs.

(6) Where the appropriate monitoring plan is modified under Article 14 of the Monitoring and Reporting Regulation 2018, Article 16 of that Regulation applies in relation to the modifications, but is to be read as if—

(a)paragraphs 1 and 2 were omitted;

(b)in paragraph 3—

(i)references to the monitoring plan were references to the appropriate monitoring plan;

(ii)points (c) and (d) were omitted;

(iii) in point (e) “in accordance with paragraph 2 of this Article” were omitted.

(7) Where the appropriate monitoring plan is modified under Article 14 of the Monitoring and Reporting Regulation 2018, sub-paragraph (1) of this paragraph has effect as if the reference to the appropriate monitoring plan included a reference to the plan as modified.

Reportable emissions must not exceed maximum amount_I167

6. If an installation's reportable emissions in a scheme year for which the installation is an ultra-small emitter exceed the maximum amount, the operator of the installation must give notice to the regulator on or before 31st March in the following year.

End of ultra-small emitter status: ceasing to meet criteria_I168

7.—(1) This paragraph applies where—

(a)an installation is an ultra-small emitter for any of the 2021, 2022, 2023, 2026, 2027 and 2028 scheme years; and

(b) the regulator considers that the installation's reportable emissions in any of those years (the “excess year”) exceed the maximum amount.

(2) Subject to sub-paragraph (7), the regulator must, as soon as reasonably practicable, give a notice to the operator of the installation.

(3) The notice must—

(a)set out the grounds for the notice;

(b)state that the installation is not an ultra-small emitter—

(i)where the notice is given in the scheme year following the excess year, for the scheme year following the scheme year in which the notice is given;

(ii)where the notice is given after the scheme year following the excess year, for the scheme year in which the notice is given;

(c)state that the operator must—

(i)apply for a greenhouse gas emissions permit; and

(ii)comply with the conditions of the permit—

(aa)where paragraph (b)(i) applies, from 1st January in the scheme year following the year in which the notice is given; or

(bb) where paragraph (b)(ii) applies, from no later than the date (the “relevant date”) set out in the notice.

(4) But the notice must also state that, where sub-paragraph (5) applies, the operator must apply for a hospital or small emitter permit and comply with the requirements of that permit, instead of a greenhouse gas emissions permit.

(5) This sub-paragraph applies where—

(a)the operator within 14 days of the date of the notice—

(i)gives notice to the regulator that the operator prefers to comply with the conditions of a hospital or small emitter permit instead of a greenhouse gas emissions permit; and

(ii)submits evidence to the regulator that the installation is not an ineligible installation for the purposes of paragraph 4 of Schedule 7; and

(b)the regulator gives notice to the operator that the regulator considers that the installation is not an ineligible installation.

(6) Where sub-paragraph (3)(b)(ii) applies, although the installation is not an ultra-small emitter for the scheme year in which the notice is given (see paragraph 2), the operator—

(a)must comply with paragraph 5 in respect of the period beginning on 1st January in the scheme year in which the notice is given and ending on the earlier of—

(i)the day before a permit for the installation comes into force; and

(ii)the relevant date;

(b)is not liable to a civil penalty under article 50 in respect of that period (but is liable to a civil penalty under article 60).

(7) Sub-paragraph (2) does not apply where—

(a)it is not possible for the notice to be given in the [^F511same period (that is to say, either the 2021-2025 allocation period or the 2026-2030 period)^F511] as the excess year; or

(b)^F512^,^F512although it is possible for the notice to be given in the same ... period as the excess year, the regulator considers that it would not be reasonable to expect the operator to apply for a permit before the end of the ... period.

[^F513End of ultra-small emitter status: voluntary exit of status for 2027-2030 allocation period

7A.—(1) This paragraph applies where the operator of an installation included in the ultra-small emitter list for 2026-2030 notifies the regulator on or before 30th June 2026 as part of the second stage of an application for free allocation in the 2027-2030 allocation period under Article 4(1a)(b)(i) of the Free Allocation Regulation that—

(a)the operator wishes the application to proceed because the operator does not wish the installation to be an ultra-small emitter for the scheme years in the 2027-2030 allocation period; and

(b)the UK ETS authority informs the regulator under Article 15a(4) of that Regulation that the application is valid.

(2) The regulator must, as soon as reasonably practicable, give a notice to the operator stating that—

(a)the installation is not an ultra-small emitter for the 2027 scheme year;

(b)the operator must apply for a greenhouse gas emissions permit and comply with the conditions of the permit from 1st January 2027.^F513]

End of ultra-small emitter status: publication_I169

8.—(1) The regulator must, as soon as reasonably practicable, inform the UK ETS authority about—

(a)each installation in respect of which a notice under paragraph 7(2) [^F514or 7A^F514] is given; and

(b)where relevant, whether the operator of the installation applied for a greenhouse gas emissions permit or a hospital or small emitter permit.

(2) The UK ETS authority must, from time to time, publish the information referred to in sub-paragraph (1).

Article 34HA

[^F515SCHEDULE 8A Free allocation for former hospital or small emitters and ultra-small emitters

Interpretation

1. In this Schedule—

[^F516 “ baseline period ” has the meaning given in point (14) of Article 2(1) of the Free Allocation Regulation; ^F516]

“ eligible scheme year ” means—

(a)

the first eligible scheme year;

(b)

any subsequent scheme year in the relevant allocation period;

“ first eligible scheme year ” means—

(a)

if the relevant notice is a conversion notice under paragraph 23 [^F517 or 23A^F517] of Schedule 7, the scheme year following the year in which the conversion notice is given;

(b)

if the relevant notice is a notice under paragraph 7 of Schedule 8—

(i)

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;

(ii)

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);

[^F518 “ start of normal operation ” has the meaning given in point (12) of Article 2(1) of the Free Allocation Regulation; ^F518]

“ 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 [^F519 or 23A^F519] 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 [^F520, etc.^F520]

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.^F521]

(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.

[^F522 (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.^F522]

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; ^F523...

(b)a monitoring methodology plan is approved in relation to the installation under Article 8 of the Free Allocation Regulation [^F524 ; and^F524]

[^F525 (c)the operator submits to the regulator either—

(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.^F525]

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

[^F526 (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;^F526]

(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 [^F527 , subject to paragraph 4(9) and (10)^F527] ;

(b)send the [^F528 determination (if any) and^F528] calculation to the UK ETS authority.

[^F529 (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)).^F529]

(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 [^F530 determination (if any) and^F530] 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 [^F531 (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)^F531] 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.

[^F532 (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

(c)either—

(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. ^F532]

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)” . ^F515]

Article 74(1)

SCHEDULE 9 Appeals to Scottish Land Court _I170_,_I171_,_I172_,_I173

1. —(1) A person who wishes to appeal to the Scottish Land Court under article 70 against a decision of the regulator[^F533 or the registry administrator (in either case, the “respondent”) ^F533] must—

(a) send the appropriate form to the Scottish Land Court together with the documents referred to in sub-paragraph (2);

(b) at the same time, send a copy of that form to the [^F534respondent^F534] together with copies of the documents referred to in sub-paragraph (2)(a) and (f).

(2) The documents are—

(a) a statement of the grounds of appeal;

(b) a copy of any relevant application;

(d) a copy of any relevant correspondence between the appellant and the [^F535respondent^F535] ;

(e) a copy of any notice (or particulars of any deemed refusal) which is the subject matter of the appeal;

(f) a statement indicating whether the appellant wishes the appeal to be—

(i) in the form of a hearing; or

(ii) to be disposed of on the basis of written representations.

(3) An appeal to the Scottish Land Court may be made on one or more of the following grounds—

(a) the decision or notice was based on an error of fact;

(b) the decision or notice was wrong in law;

(c) the decision or notice was unreasonable for any other reason (including that the amount of a penalty was unreasonable);

(d) any other reason.

(4) In this Schedule—

^M57 “ appropriate form ” has the meaning given in rule 3 of the Rules of the Scottish Land Court Order 2014 ;

“ decision ” includes a deemed refusal under this Order.

2.—(1) Subject to sub-paragraph (2), the appropriate form must be sent to the Scottish Land Court before the expiry of the period of 28 days beginning with the date of the decision.

(2) The Scottish Land Court may accept the appropriate form after the expiry of that period where satisfied that there was a good reason for the failure to bring the appeal in time.

3.—(1) The Scottish Land Court may determine an appeal, or any part of an appeal, on the basis of written representations and without a hearing where—

(a) the parties agree; or

(b) the Scottish Land Court considers it can determine the matter justly without a hearing.

(2) The Scottish Land Court must not determine the appeal without a hearing without first giving the parties notice of its intention to do so, and an opportunity to make written representations as to whether there should be a hearing.

4. —(1) The [^F536 respondent ^F536] must, within 16 days of receipt of the copy of the appropriate form, give notice of it to any person who appears to the [^F536 respondent ^F536] to have a particular interest in the appeal (“interested party”).

(2) A notice under sub-paragraph (1) must—

(a) state that an appeal has been initiated;

(b) state the name of the appellant;

(d) state that, if a hearing is to be held wholly or partly in public, an interested party will be notified of the date, time and location of the hearing;

(e) state that an interested party may request to be heard at a hearing.

(3) An interested party may request the [^F536respondent^F536] to provide the interested party with a copy of the documents set out in paragraph 1(2) only for the purposes of the appeal.

(4) Where a request is made under sub-paragraph (3), the [^F536respondent^F536] must provide the documents to the interested party as soon as reasonably practicable.

(5) An interested party may—

(a) make representations to the Scottish Land Court in relation to the appeal;

(b) be heard at a hearing in relation to the appeal.

(6) The representations by an interested party must be made within 16 days of the date of the notice under sub-paragraph (1).

(7) The Scottish Land Court must provide a copy of any representations to the parties.

(8) The [^F536respondent^F536] must, within 8 days of sending a notice under sub-paragraph (1), give notice to the Scottish Land Court of the persons to whom and the date on which the notice was sent.

(9) If an appeal is withdrawn, the [^F536respondent^F536] must give notice to all interested parties about the withdrawal.

Article74(2)

SCHEDULE 10 Appeals to Planning Appeals Commission (Northern Ireland) _I174_,_I175_,_I176_,_I177

1. —(1) A person who wishes to appeal to the Planning Appeals Commission under article 70 against a decision of the regulator[^F537 or the registry administrator (in either case, the “respondent”) ^F537] must give to the Planning Appeals Commission—

(a) written notice of the appeal; and

(b) a statement of the grounds of appeal.

(2) The notice of appeal must be accompanied by any fee for the appeal prescribed in regulations made under section 223(7)(b) of the Planning Act (Northern Ireland) 2011; and for that purpose section 223(7)(b) has effect as if the reference to an appeal under that Act included a reference to an appeal under this Order.

(3) The Planning Appeals Commission must as soon as reasonably practicable send a copy of the notice of appeal and the statement of grounds to the [^F538respondent^F538] .

2. A notice of appeal under paragraph 1 must be given before the expiry of the period of 47 days beginning with the date on which the decision of the [^F539respondent^F539] takes effect.

3.—(1) An appellant may withdraw an appeal by giving notice to the Planning Appeals Commission.

(2) If an appellant withdraws an appeal, the Planning Appeals Commission must give notice to the [^F540respondent^F540] of the withdrawal as soon as reasonably practicable.

4.—(1) The Planning Appeals Commission must determine the appeal; and section 204(1), (3) and (4) of the Planning Act (Northern Ireland) 2011 apply in relation to the determination of the appeal as they apply in relation to the determination of an appeal in accordance with that Act.

(2) The Planning Appeals Commission must—

(a) determine the process for determining the appeal; and

(b) when doing so, take into account any requests by either party to the appeal.

Article 77

SCHEDULE 11 Transitional provisions: installations

Permits under GGETSR 2012_I178

1.—(1) This paragraph applies to a permit within the meaning of GGETSR 2012 that immediately before this Schedule comes into force authorises a regulated activity to be carried out at an installation.

(2) But this paragraph does not apply to a permit—

(a)in respect of which an application under regulation 13 of GGETSR 2012 for the surrender of the permit has been made but has yet to be determined;

(b)that is due, in accordance with provision made under GGETSR 2012, to be surrendered or revoked; or

(c)that authorises a regulated activity to be carried out at an installation included in the ultra-small emitter list for 2021-2025.

(3) Where the installation is included in the hospital and small emitter list for 2021-2025, the regulator must—

(a)convert the permit into a hospital or small emitter permit the provisions of which satisfy the requirements of paragraph 11 of Schedule 7 and that authorises the regulated activity to be carried out at the installation from 1st January 2021; and

(b)give notice of the conversion to the operator of the installation.

(4) In any other case, the regulator must—

(a)convert the permit into a greenhouse gas emissions permit the provisions of which satisfy the requirements of paragraph 4 of Schedule 6 and that authorises the regulated activity to be carried out at the installation from 1st January 2021; and

(b)give notice of the conversion to the operator of the installation.

(5) When converting a permit under sub-paragraph (3) or (4), the regulator may make only such changes to the operator's obligations under the permit as the regulator considers necessary to convert the permit into a greenhouse gas emissions permit or, as the case may be, a hospital or small emitter permit.

(6) But sub-paragraph (5) does not prevent the regulator correcting errors.

(7) When converting a permit under sub-paragraph (4), the regulator may include under paragraph 4(2)(d) of Schedule 6 a condition to give proper effect to Article 69(4) of the Monitoring and Reporting Regulation 2018 that requires the operator to submit a report to the regulator relating to non-conformities or recommendations for improvements stated in a verification report under [^F541Commission Implementing Regulation (EU) 2018/2067 (as it had effect in EU law)^F541] in respect of the scheme year (within the meaning of GGETSR 2012) beginning on 1st January 2020.

(8) The conversion of a permit under sub-paragraph (3) or (4) does not affect the operator's obligations under the permit in respect of specified emissions before 1st January 2021 (and GGETSR 2012 continue to apply in relation to such obligations).

(9) A permit that is converted under this paragraph continues in force as if issued under this Order until cancelled, surrendered or revoked under this Order.

Applications for permits, etc. under GGETSR 2012_I179

2.—(1) An application under regulation 10 of GGETSR 2012 for a permit for an installation that is made to the regulator before 1st January 2021, but not determined before that date—

(a)where the installation is included in the hospital and small emitter list for 2021-2025, must be treated as an application for a hospital or small emitter permit under paragraph 7 of Schedule 7 to this Order;

(b)in any other case (except where the installation is included in the ultra-small emitter list for 2021-2025), must be treated as an application for a greenhouse gas emissions permit under paragraph 1 of Schedule 6 to this Order.

(2) An application under regulation 11 of GGETSR 2012 to vary a permit that is made to the regulator before 1st January 2021, but not determined before that date, must be treated as an application to vary the permit under paragraph 6 of Schedule 6 to this Order.

(3) An application under regulation 12 of GGETSR 2012 for the transfer of a permit that is made to the regulator before 1st January 2021, but not determined before that date, must be treated as an application to transfer the permit under paragraph 7 of Schedule 6 to this Order.

[^F542 (4) This sub-paragraph applies where—

(a)a permit for an installation is converted into a greenhouse gas emissions permit under paragraph 1(4);

(b)the 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; and

(b)a 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.

(5) Where 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.^F542]

Schedule does not apply to permits for relevant Northern Ireland electricity generators, etc._I180

3.—(1) This Schedule does not apply to—

(a)relevant Northern Ireland permits; or

(b)applications for, or in relation to, relevant Northern Ireland permits.

(2) In this paragraph, “ relevant Northern Ireland permit ” means a permit within the meaning of GGETSR 2012 that authorises a regulated activity to be carried out at a relevant Northern Ireland electricity generator.

in force	Provision is in force
in force*	In force only for specified purposes (for detail about the purposes see/hover footnote)
not in force	Not in force in England (may be in force in other geographies, see footnotes)
italics	Defined term
_dfn	Defined term (alternative style)
gry bckgrd	the in-force status of the provision is complex, check the footnotes

2020 No. 1265

The Greenhouse Gas Emissions Trading Scheme Order 2020cross-notes

PART 1 Preliminary

CitationI1

CommencementI2

ExtentI3

InterpretationI4

[F28Meaning of FA installation, etc.

Meaning of operatorI5

Meaning of aircraft operatorI6

Exempt commercial air transport operatorsI7

Exempt non-commercial air transport operatorsI8

[F47Meaning of registry administrator

Meaning of regulatorI9

Meaning of regulator: installations

Table AI10

Meaning of regulator: aircraft operatorsI11

Aircraft operator: change in regulatorI12

Aircraft operator: change in registered officeI13

[F53Meaning of regulator: maritime operators

Meaning of UK ETS authority, etc.I14

Applications, notices, etc.I15

PART 2 Basic elements of the UK ETS

CHAPTER 1 Establishment of the UK ETS and requirement for review

UK Emissions Trading SchemeI16

Review of UK ETSI17

CHAPTER 2 Allowances and caps

AllowancesI18

Cap for trading periodI19

Cap for scheme yearsI20

Cap: hospital and small emitter reduction factorsI21

Cap: base for scheme years

Table BI22

Trading in allowancesI23

[F77Flexible reserve

CHAPTER 3 Monitoring, reporting and verification

Monitoring and reporting of emissionsI24

[F86Verification of data and accreditation of verifiers I25

[F89CHAPTER 4 Registry

Registry

PART 3 Installations

Installations: requirement for permit to carry out regulated activityI26

Installations: requirement to surrender allowancesI27

[F90Installations: information to be submitted [F91on or before 30 June 2025F91] where no application for free allocation, etc. is made I28

PART 4 Aviation

Application for emissions monitoring plansI29

Issue of emissions monitoring plansI30

Refusal of application for emissions monitoring plansI31

Variation of emissions monitoring plansI32

Monitoring emissions and emissions monitoring plan conditionsI33

Reporting aviation emissionsI34

Surrender of allowances by aircraft operatorsI35

[F115PART 4ZA Maritime

Application of the Order to maritime

[F116PART 4A Free Allocation

CHAPTER 1 Installations

Allocation tables [F117for 2021-2025 and 2027-2030 allocation periodsF117]

[F128Allocation table for 2026 allocation period

Allocation tables: supplementary

Allocation tables: updates

Allocation tables: publication, etc.

Allocation of allowances

No allocation unless monitoring methodology plan approved

New entrants' reserve

Installations: errors in applications for free allocation, etc.

[F156Free allocation for former hospital or small emitters and ultra-small emitters

CHAPTER 2 Aviation cross-notes

Interpretation

Meaning of historical aviation activity level and attributable

Aviation: entitlement to free allocation in 2021-2025 allocation period

Application for aviation free allocation entitlement cross-notes

Processing of applications and calculation of aviation free allocation entitlement

Table B1 cross-notes

Aviation allocation table for 2021-2025 allocation period

Aviation: allocation of allowances for 2021-2025 allocation period

Permanent cessation of aviation activity

Transfers of aviation free allocation entitlement

Errors in aviation allocation table

CHAPTER 3 Common provisions

Return of allowances: installations

The Greenhouse Gas Emissions Trading Scheme Order 2020_cross-notes

Citation_I1

Commencement_I2

Extent_I3

Interpretation_I4

[^F28Meaning of FA installation, etc.

Meaning of operator_I5

Meaning of aircraft operator_I6

Exempt commercial air transport operators_I7

Exempt non-commercial air transport operators_I8

[^F47Meaning of registry administrator

Meaning of regulator_I9

Table A_I10

Meaning of regulator: aircraft operators_I11

Aircraft operator: change in regulator_I12

Aircraft operator: change in registered office_I13

[^F53Meaning of regulator: maritime operators

Meaning of UK ETS authority, etc._I14

Applications, notices, etc._I15

UK Emissions Trading Scheme_I16

Review of UK ETS_I17

Allowances_I18

Cap for trading period_I19

Cap for scheme years_I20

Cap: hospital and small emitter reduction factors_I21

Table B_I22

Trading in allowances_I23

[^F77Flexible reserve

Monitoring and reporting of emissions_I24

[^F86Verification of data and accreditation of verifiers _I25

[^F89CHAPTER 4 Registry

Installations: requirement for permit to carry out regulated activity_I26

Installations: requirement to surrender allowances_I27

[^F90Installations: information to be submitted [^F91on or before 30 June 2025^F91] where no application for free allocation, etc. is made _I28

Application for emissions monitoring plans_I29

Issue of emissions monitoring plans_I30

Refusal of application for emissions monitoring plans_I31

Variation of emissions monitoring plans_I32

Monitoring emissions and emissions monitoring plan conditions_I33

Reporting aviation emissions_I34

Surrender of allowances by aircraft operators_I35

[^F115PART 4ZA Maritime

[^F116PART 4A Free Allocation

Allocation tables [^F117for 2021-2025 and 2027-2030 allocation periods^F117]

[^F128Allocation table for 2026 allocation period

[^F156Free allocation for former hospital or small emitters and ultra-small emitters

CHAPTER 2 Aviation _cross-notes

Application for aviation free allocation entitlement _cross-notes

Table B1 _cross-notes

Charges_I36

[^F198Charging scheme: regulators _I37

[^F198Charging scheme: registry administrator

Remittance of charges_I38

Authorised persons_I39

Inspections_I40

Powers of entry, etc._I41

Warrants_I42

Admissible evidence_I43

Legal professional privilege_I44

CHAPTER 1 Enforcement notices [^F209, deficit notices^F209] and determination of emissions by regulator

Enforcement notices_I45

[^F215Deficit notices

Determination of reportable emissions or aviation emissions by regulator_I46

[^F221Determination of maritime emissions by regulator

[^F221Determination of emissions figure for surrender by regulator

Carbon price_I47

Penalty notices_I48

Penalty notices: supplementary_I49

Regulator must publish names of persons subject to civil penalty under article 52_I50

Installations: carrying out regulated activity without permit contrary to article 26_I51

Installations: failure to comply with conditions of permit, etc._I52

Failure to surrender allowances_I53

Installations: failure to transfer or surrender allowances where underreporting discovered after transfer_I54

Hospitals and small emitters: exceeding emissions target_I55

Hospitals and small emitters: failure to pay civil penalty for exceeding emissions target_I56

Hospitals and small emitters: under-reporting of emissions_I57

Hospitals and small emitters: failure to notify when ceasing to meet criteria_I58

Installations: failure to apply to surrender permit_I59

Ultra-small emitters: reportable emissions exceeding maximum amount_I60

Ultra-small emitters: failure to notify where reportable emissions exceed maximum amount_I61