Jurisdiction: United Kingdom
Commencement: 15th February 2022
Amends: The Carbon Accounting Regulations 2009
For the purposes of Part I of the Climate Change Act 2008, these Regulations set out the following as carbon units:
- Assigned amount units
- EU allowances
- Certified emissions reductions
- Emissions reduction units
- Removal units
Each carbon unit has a value of 1 tonne of carbon dioxide equivalent.
A duty has been placed upon the Secretary of State to open a ‘credit’ account in which the UK’s carbon credit is to be held. A credit may only be taken out of the account for the purposes of cancellation, unless the registry administration is satisfied that certain conditions have been met.
Carbon units may be transferred to the net UK carbon account by any person, but are only credited if a minister of the Crown makes a declaration to that effect.
The Secretary of State sets the circumstances in which carbon units are to be credited to and debited from the net UK carbon account during the 2008-2012 budgetary period as a result of the operation of European Union Emissions Trading Scheme.
The regulations introduce provisions for carbon units to be debited from the net carbon account during 2008-2012 budgetary period where carbon units have been disposed of in the course of a given year.
The Secretary of State is required to cancel all the units in the credited account and to cancel a further amount of units representing the difference between the UK’s carbon budget and the UK’s assigned amount under the Kyoto Protocol as is attributable to net UK emissions.
A register must be kept by the Secretary of State containing details of the amounts of carbon units credited to and debited from the net UK carbon account and the amounts of carbon units cancelled.
The carbon accounting system for the third carbon budget year (2018-2022) is updated. The system is used to monitor compliance with the targets for reducing greenhouse gas emissions, set out by the Climate Change Act 2008.
Mechanisms are provided to account for the credits and debits that resulted from the final year, when the United Kingdom (UK) was still a European Union (EU) Member State and participated in the European Union Emissions Trading Scheme (EU ETS).
The accounting system for the third year (2020) of the third carbon budget (2018-2022) is updated by:
- providing a mechanism to account for credits and debits to the net UK carbon account during the operation of the EU ETS (excluding aviation); and
- providing a mechanism to account for domestic aviation* during the operation of the EU ETS. This mechanism relies on the calculation of the domestic aviation cap, set out in the Schedule of these Regulations.
*Domestic aviation means flights between airports within the UK.
The Secretary of State is required to cancel any carbon units held at the end of the third carbon budget period.
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