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Jurisdiction: England
Commencement: 17th May 2022
Amends: The Emissions Performance Standard Regulations 2015
The Emissions Performance Standard Regulations 2015 establish a monitoring and enforcement regime for the Emissions Performance Standard (EPS) which was introduced in the Energy Act 2013 (EA2013).
The EPS imposes an annual limit on carbon emissions from new fossil fuel plants – this is known as the Emissions Limit Duty. The Emissions Limit Duty has been set at a level equivalent to emissions of 450gCO2/kWh if the plant is operating at baseload. Operating at baseload is defined as operating almost continuously over the course of a year, at between 80%-90% of a generating station’s rated electrical output.
The EPS is designed to work alongside other decarbonisation policies implemented under the Government’s Electricity Market Reforms. Another requirement is that any new coal fired power station is to be equipped with Carbon Capture and Storage (CCS).
The Regulations also apply the Emissions Limit Duty (provided for by section 57 of the Energy Act 201) to existing coal-fired generation plants which extend their operational life by replacing or adding a main boiler.
Parts 1 and 2 of the Regulations apply to the United Kingdom and Part 3 (relating to monitoring and enforcement) applies to England only.
Various duties apply.
Regulation 2 (Interpretation) of The Emissions Performance Standard Regulations 2015 is amended to update definitions relating to the monitoring and enforcement of the emissions performance standard in England. This amendment is necessary to transition the UK from the European Union Emissions Trading Scheme (EU ETS) to the UK Emissions Trading Scheme (UK ETS).
The definition of “GGETS Order ” is updated to mean the Greenhouse Gas Emissions Trading Scheme Order 2020.
Additional definition changes are made to reference the new Regulations and are shown below.
The definition of “The Monitoring and Reporting Regulation ” is updated to mean:
A change is also made to the definition of “the Verification Regulation 2018 ” to mean Regulation (EU) 2018/2067 on the verification of data and on the accreditation of verifiers pursuant to Directive 2003/87/EC.
The definition of “Greenhouse Gas Emissions Report” is updated to mean:
Additionally, the meaning of Greenhouse Gas Emissions Permit is amended to reflect the definition in Article 4 (Interpretation) and Schedule 6 (permits) of the “GGETS Order “.
There are no duties for organisations under these Regulations.
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Jurisdiction: United Kingdom
Commencement: 26th November 2021
Amends: UK Retained: Regulation (EU) 2019/631 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles
CO2 emissions performance requirements are set by the European Commission (EC) for new passenger cars* and new light commercial vehicles* in order to help achieve the European Union (EU) greenhouse gas emissions reduction target and the objectives of the Paris agreement (a global action plan to limit global warming to below 2°C above pre-industrial levels).
*New passenger cars are Category M1 vehicles which are registered in the EU for the first time and have not previously been registered outside of the EU. Category M1 means vehicles for the carriage of passengers with no more than 9 seats, including the driver’s seat, as defined in Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
*New light commercial vehicles are Category N1 vehicles with a mass not exceeding 2610kg and those type approved under Regulation (EC) 715/2007 which are registered in the EU for the first time and have not previously been registered outside of the EU. Category N1 means vehicles for the carriage of goods with a maximum mass of 3.5 tonnes. as defined in Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
Zero emissions category N vehicles with a mass exceeding 2480kg will be counted as light commercial vehicles from 1st January 2025, if the excess mass is due to the energy storage system.
If a vehicle has been registered outside of the EU for less than 3 months before it is registered in the EU, then it is will still be considered a ‘new’ vehicle.
The Regulation does not apply to special purpose vehicles, i.e. a vehicle intended to perform a function which requires special body arrangements and/or equipment. This category includes wheel-chair accessible vehicles, caravans, and ambulances, as defined by Part A of Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
Manufacturers responsible for fewer than 1000 new passenger cars or light commercial vehicles registered in the EU in the previous calendar year are not required to comply with certain requirements, including the requirement to meet specific emissions targets and pay excess emissions premium.
Amendment
Changes are made to set CO2 emission performance standards for new passenger cars and new light commercial vehicles for the period 2021-2024, so that UK CO2 targets are fully established, and relevant data can be collected. The new specific emissions targets that manufacturers must meet are outlined below.
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Jurisdiction: Republic of Ireland
Commencement: 12th October 2021
Amends: Climate Action and Low Carbon Development Act 2015
The Climate Action and Low Carbon Development Act 2015 provides details on approval plans made by the Government in relation to climate change for the purpose of pursuing the transition to a low carbon, climate resilient and environmentally sustainable economy. This Act establishes a body to be known as the Climate Change Advisory Council.
This Act will not affect existing or future obligations of the State under the law of the European Union (including Directive 2001/42/EC, Council Directive 92/43/EEC, Directive 2003/87/EC and Decision No. 406/2009/EC), existing or future obligations of the State under any international agreement, any Act or instrument that gives effect to any such obligation or existing or future entitlements of the State or any person under the said law, agreement, Act or instrument.
Amendment
These Regulations specify that the carbon budgets, referred to in the Duties section above, (commencing on 1st January 2021 and ending on 31st December 2025, and future budgets thereafter), must take into account emissions from the greenhouse gases specified in the CRF*.
*The CRF is the common reporting format tables provided annually by the Environmental Protection Agency (EPA) to the United Nations under UN reporting guidelines. The CRF are amended by the EPA and published on the EPA website.
The way in which emissions should be calculated and accounted for, is specified in the United Nations Framework Convention on Climate Change reporting guidelines on annual inventories for Parties.
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Jurisdiction: UK
Commencement: 28st October 2021
Amends:
The Promotion of the Use of Energy from Renewable Sources Regulations 2011 implement Directive 2009/28/EC on the promotion of the use of energy from renewable sources into UK legislation. The Directive sets mandatory targets for energy consumed in each member state which must come from renewables by 2020. The UK target has been set at 15%.
The Motor Fuel (Road Vehicle and Mobile Machinery) Greenhouse Gas Emissions Reporting Regulations 2012 require those that supply more than 450,000 litres or kilograms of transport fuel per year, to register with the Department for Transport, provide information and meet targets.
The Energy Efficiency (Building Renovation and Reporting) Regulations 2014 require the Secretary of State for Energy and Climate Change to submit a strategy and annual updates to the European Commission on the UK’s investment in the renovation of residential and commercial buildings. There are no requirements on businesses or the public sector.
The Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014 impose a duty on each country’s departments to undertake certain actions in order to promote certain requirements of the Directive 2012/27/EU on energy efficiency. The Directive establishes a common set of measures to be used across the EU to promote energy efficiency in order to meet the 2020 20% deadline target.
Amendment
The Promotion of the Use of Energy from Renewable Sources Regulations 2011
Responsible authorities* are required to take appropriate steps to ensure public buildings fulfil an exemplary role in the promotion of the use of renewable energy, in accordance with regulation 11.
Responsible authorities means:
Regulation 13 regarding the recognition of certificates is revoked.
The Motor Fuel (Road Vehicle and Mobile Machinery) Greenhouse Gas Emissions Reporting Regulations 2012
The Energy Efficiency (Building Renovation and Reporting) Regulations 2014
The following regulations are removed:
The Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014
A series of definitions are amended.
The definition of small and medium-sized enterprises is updated to an enterprise that:
The definition of assessment is updated to a comprehensive assessment of the potential for high-efficiency cogeneration*, and efficient district heating and cooling.
*High-efficiency cogeneration means the simultaneous generation of energy (cogeneration) in accordance with the conditions of the UK, as specified in Annex II.
Cost benefit analysis is updated to an analysis capable of identifying the most cost-efficient solutions to meet the heating and cooling needs of a geographical area. This analysis should consider climate conditions, economic feasibility, and technical suitability, in accordance with Part III of Annex VIII.
Regulation 4(5) relating to the assessment of potential for high-efficiency cogeneration and efficient district heating and cooling, is updated.
Under Regulation 4(5), at intervals not exceeding 5 years, the Secretary of State must:
The next assessment or statement must be published on or before 31st December 2025.
All updates to this assessment must:
Regulation 9 (Duty for the Secretary of State to review the energy services market) and Part II of Annex VIII is removed.
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Jurisdiction: UK
Commencement: 1st September 2021
Amends:
The UK Retained: Regulation (EU) 2019/631 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles are set by the European Commission (EC) for new passenger cars* and new light commercial vehicles* in order to help achieve the European Union (EU) greenhouse gas emissions reduction target and the objectives of the Paris agreement (a global action plan to limit global warming to below 2°C above pre-industrial levels).
*New passenger cars are Category M1 vehicles which are registered in the EU for the first time and have not previously been registered outside of the EU. Category M1 means vehicles for the carriage of passengers with no more than 9 seats, including the driver’s seat, as defined in Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
*New light commercial vehicles are Category N1 vehicles with a mass not exceeding 2610kg and those type approved under Regulation (EC) 715/2007 which are registered in the EU for the first time and have not previously been registered outside of the EU. Category N1 means vehicles for the carriage of goods with a maximum mass of 3.5 tonnes. as defined in Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
Zero emissions category N vehicles with a mass exceeding 2480kg will be counted as light commercial vehicles from 1st January 2025, if the excess mass is due to the energy storage system.
If a vehicle has been registered outside of the EU for less than 3 months before it is registered in the EU, then it is will still be considered a ‘new’ vehicle.
The Regulation does not apply to special purpose vehicles, i.e. a vehicle intended to perform a function which requires special body arrangements and/or equipment. This category includes wheel-chair accessible vehicles, caravans, and ambulances, as defined by Part A of Annex II of Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.
Manufacturers responsible for fewer than 1000 new passenger cars or light commercial vehicles registered in the EU in the previous calendar year are not required to comply with certain requirements, including the requirement to meet specific emissions targets and pay excess emissions premium.
From 1st January 2020:
This target will be complemented by additional measures corresponding to a reduction of 10g CO2/km as part of the EU’s ‘integrated approach’.
From 1st January 2025:
From 1st January 2030:
Manufacturers are required to ensure that their average specific emissions of CO2 don’t exceed their relevant targets.
Specified emissions targets are based on the annual targets detailed above and are determined in accordance with the relevant calculations in Annex I or their derogation:
The competent authority for each EU country is required to record and make available to manufacturers (or their importers / representatives), and the EC, the information in Part A of Annex II and III for all new cars and commercial vehicles registered in their territory respectively.
They must also measure and report the specified emissions for cars that are not type approved (i.e. confirmation that they meet specified performance standards).
The EC is required to provisionally calculate the following information for each manufacturer for the last year, and notify the manufacturer:
Manufacturers have 3 months to inform the EC regarding any errors in the data.
The EC is required to publish, by the 31st October each year, the finalised list of data on specified emissions and targets for each manufacturer for the last year. This should also include the average mass and average test mass of all new vehicles, as well as information on whether each manufacturer has complied with their targets.
This list will be published as an implementing act.
Each year excess emissions premiums are payable by manufacturers or pool managers where their average specific emissions of CO2 exceed their specific emissions target.
This is calculated using the following formula:
(Excess emissions X €95) X No. of newly registered vehicles
Manufacturers that register under 10,000 cars or 20,000 commercial vehicles in the EU in a year can apply for a derogation as long as they are not part of a group of manufacturers that produce over these limits. If they are part of a group which exceeds these limits but the manufacturer has their own production and design facilities, then they may also apply for a degroation.
Derogation allow manufacturers to set an alternative specified emissions target which is consistent with their emissions reduction potential. It should be noted that they are still required to meet this revised target and will be required to pay the excess emissions premium if they do not.
A derogation lasts 5 years and can be renewed. They must be submitted by 31st October in the year that the derogation starts.
If there is a change to a manufacturer’s eligibility, they must notify the EC immediately.
Manufacturers and suppliers can use innovative technologies to achieve CO2 savings and help meet their targets. Only those approved by the EC will be considered.
The total contribution of innovative technologies can make to reducing average specified emissions of CO2 is up to 7gCO2/km.
Manufacturers must ensure that the CO2 emissions and fuel consumption values that are reported in certificates of conformity correspond with the actual values from vehicles in service in line with Commission Regulation (EU) 2017/1151 supplementing Regulation (EC) 715/2007 on type-approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information
As Regulation 2019/631 was removed from the Northern Ireland Protocol shortly before the end of the transition period of the UK leaving the EU, a loophole was created for new newly registered cars and vans in Northern Ireland. This resulted in neither the EU nor the UK retained version of the Regulation applying to new passenger cars and vans in Northern Ireland and their CO2 emissions being unregulated.
This amendment extends the existing retained version of the Regulation to Northern Ireland, creating a UK -wide regime for the regulation of CO2 emissions from newly registered cars and vans from 1st September 2021.
The Regulation does not apply to vehicles registered in Northern Ireland between 1st January 2021 and 31st August 2021, unless they were also registered in GB.
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Jurisdiction: UK
Commencement: 25th August 2021
Amends:
The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (UK ETS) implements the principals of emissions trading by allocating and trading greenhouse gas (GHG) emissions allowances to participants of the scheme. These Regulations set out the legal framework to allow auctioning of emissions allowances.
One allowance equals one tonne of carbon dioxide (CO2) equivalent. At the end of each year, installations must have enough allowances to account for their GHG emissions. They have the flexibility to buy additional allowances on top of their allocation, or to sell surplus allowances generated from reducing their emissions below their allocation at auction. An allowance allows a participant to emit 1 tonne of carbon dioxide equivalent.
The UK ETS was implemented in the UK by The Greenhouse Gas Emissions Trading Scheme Order 2020 (‘2020 Order’). It replaces the European Union Emissions Trading System (EU ETS) for UK participants, which also follows the principles of emissions trading. For more general information on the UK ETS and how it works for participants see the entry for the 2020 Order.
The UK ETS authority for these Regulations are the national authorities, which are:
The Regulations are made under the power in section 96 of the Finance Act 2020 to make Regulations on the allocation of emissions allowances in exchange for payment. They are equivalent to the provisions made around allowances for EU ETS by Regulation (EU) 1031/2010 on the timing, administration and other aspects of auctioning of greenhouse gas allowances.
Auctions
As with the EU ETS, under the UK ETS auctioning continues to be the main means of introducing allowances into the market. Participants are also able to trade UK ETS emissions allowances on a secondary market. It is set out in Part 2 of the Regulations how bids are to be submitted and withdrawn, and how the auction clearing price is to be determined.
The minimum volume bid is one lot, and each lot auctioned must consist of 500 allowances. Each bid must state:
Each bid may only be submitted, modified or withdrawn during the bidding window set by the auction platform. Any unsold allowances can be added to the next four auctions up to a limit of 125% of their original volume.
The Auction Reserve Price (ARP) is set by these Regulations and this is the minimum price for which allowances can be sold at auctions. Bids below this price will not be accepted. The UK ETS has an ARP of £22. It is not intended that any changes will be made to the ARP before it is likely withdrawn as the scheme matures.
Auction Calendar
The auctioneer sets the auction calendar, including the bidding windows, individual volumes, auction dates, as well as the auctioned product, payment and delivery dates of the allowances to be auctioned in individual auctions each calendar year. The auction platform provider, ICE Futures, was appointed to host emissions auctions on behalf of the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS), which has been appointed as the UK Auctioneer by the Treasury. ICE published the 2021 calendar for UK ETS auctions on 26th February 2021. The first UK ETS auction is 19th May 2021.
The appointed auction platform must publish the auction calendar for a year by 15th July of the preceding year or as soon as practicable after that date. The auction platform must also report transactions to the Financial Conduct Authority in order to provide appropriate regulatory oversight.
This legislation provides for fees and costs to be charged by the auction platform and auctions are to be monitored for issues such as market abuse, money laundering, terrorist financing or other criminal activity.
Auction participants will need to register with the appointed auction platform and must also hold a registry account in the UK Emissions Trading Registry. This registry system is used to ensure the accurate accounting of all allowances issued under the UK ETS, and it is used by operators to surrender allowances each year as required by the 2020 Order.
Cost Containment Mechanism
The Cost Containment Mechanism will be triggered if the average price for one allowance on secondary futures markets is more than:
If any of the above occur then the Treasury can authorise changing the distribution of allowances or increasing the volume of allowances to be auctioned at auctions within a calendar year.
Access to Auctions
Part 4 of the Regulations legislate access to auctions by participants and details the eligibility criteria and process for those applying to bid in auctions and participate in the auction platform’s secondary market. The appointed auction platform can refuse, revoke or suspend admission to bid in auctions.
There is a right of appeal set by these Regulations against decisions made by the auction platform, such as admissions to bid.
Technical errors are corrected in The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (‘the 2021 Regulations’). There are no changes to compliance duties for organisations.
The 2021 Regulations allow auctions to be cancelled in certain circumstances and amendments to be made to the auction calendar. The appointed auction platform can now change the date or time of the opening and close of the bidding window instead of cancelling the auction.
In relation to allocation of emissions allowances, the formula for calculating the annual volume of allowances to be auctioned in a calendar year is updated. If allowances designated for free allocation to certain industrial emitters are not allocated, the Treasury can authorise their release for auction as part of the cost containment mechanism.
Functions relating to deduction of fees from auction proceeds, the submission of the auction platform’s exit strategy and the cooperation requirement to facilitate the effective monitoring of auctions that were the responsibility of the Financial Conduct Authority (‘the FCA’) are transferred to the auctioneer or the Treasury or both.
Amendments are made to the duties of the auction platform which must provide regular information about auctions to the auctioneer and the Treasury. The auction platform must keep records of checks carried out in refusing to grant admission to bid and revoking or suspending any admission to bid. The exit strategy must be submitted to the auctioneer and Treasury within 3 months of the auction platform’s date of appointment. When market abuse is reported to FCA by the auction platform, the auctioneer and the Treasury must be informed.
The auction platform must consult with the auctioneer before maximum bid sizes and other remedial measures are imposed in the case of a risk of market abuse. Maximum bid sizes can now be imposed on single entities as well as groups. When results of an auction are announced, the appointed auction platform must include details of the auctions to which the volume of any unsold allowances will be carried over.
Some updates to confidentiality are made, including ensuring the methodology for determining the prevailing secondary market price is to be treated as confidential information and that the exchange of confidential information between the auction platform and the auctioneer, the UK ETS Authority and the Treasury can take place.
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Jurisdiction: UK
Commencement: 28th June 2021
This Order sets limits on the use of international carbon units that can be used to help meet the carbon budget from 2023-2027. The carbon budget is the maximum level of greenhouse gases which the UK can emit within the given five-year period and is a requirement under the Climate Change Act 2008.
The 2021 Order sets limits for the net amount of carbon units to be credited to the net UK carbon account for the 2023-2027 budgetary period as 55,000,000 carbon units. That limit excludes the use of credits which result from the operation of the European Union Emissions Trading Scheme (EU ETS).
There are no compliance duties for organisations.
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Jurisdiction: UK
Commencement: 23rd June 2021
Amends: The Carbon Budget Orders 2009 – 2021
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Jurisdiction: UK
Commencement: 1st May 2021
Amends:
The Greenhouse Gas Emissions Trading Scheme Regulations 2012 Implement the European Union Emissions Trading System (EU ETS) into UK law.
The Environment Act 1995 creates a number of new agencies and set new standards for environmental management, regarding contaminated land and abandoned mines, national parks and air quality.
The Greenhouse Gas Emissions Trading Scheme (Amendment) and National Emissions Inventory Regulations 2005 establish an application procedure by which a person may apply to the Secretary of State for approval of one of the project activities established under the Kyoto Protocol or for authorisation to participate in the project activity.
The Environment Agency is no longer required to take account of European Union (EU) laws when considering applications for Kyoto Protocol projects* as the UK is no longer part of the EU. Instead, it must ensure that the UK’s relevant international climate law obligations are satisfied; this includes the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol**.
*Kyoto Protocol projects are emission-reduction projects used to earn certified emission reduction (CER) credits under the Protocol. These can be either Clean Development Mechanism (CDM) or Joint Implementation projects.
**The Kyoto Protocol is a protocol of the United Nations Framework Convention on Climate Change (UNFCCC), an international climate treaty. The Protocol commits industrialised countries and economies to limiting and reducing their greenhouse gas emissions, including the UK.
There are no changes to duties for organisations.
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Jurisdiction: United Kingdom
Commencement: 29th May 2021
Amends:
This Renewables Obligation Order 2015 (England and Wales) consolidates and re-enacts the Renewable Obligation Order 2009, as amended. It imposes an obligation, on all electricity suppliers licensed under the Electricity Act 1989 which supply electricity in England and Wales, to produce a certain number of renewables obligation certificates in respect of each megawatt hour of electricity that each supplies to customers in England and Wales during a specified period known as an obligation period. It also bands the different technologies that are used to generate electricity from renewable sources.
The definition of the Combined Heat and Power Quality Assurance (CHPQA) Standard in The Emissions Performance Standard Regulations 2015 (the ‘2015 Regulations‘) is updated to introduce Issue 8 of the CHPQA Standard for a period of 12 months from 29th May 2021.
Issue 8 of the CHPQA Standard is a temporary easement to reduce the financial impact of Coronavirus (COVID-19) on Combined Heat and Power (CHP) Scheme operators and to allow continuity of support under the CHPQA Programme for the 2021 certification process.
The temporary easement will allow Schemes to be recertified in 2021 where Scheme Operators can provide appropriate evidence of the impact that lockdowns and other COVID-19 restrictions have had on the operation of their Schemes.
Minor changes are also made to the 2015 Regulations by removing references to Directive 2012/27/EU on Energy Efficiency as the UK has left the EU.
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