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EU ETS and Brexit Part 2: revised EU ETS compliance deadlines for UK operators.

  • United Kingdom
  • Brexit
  • Environment
  • Health and safety
  • Litigation and dispute management

02-02-2018

Whilst the future of UK participation in the EU Emissions Trading System (“EU ETS”) is subject to further negotiations, the position of UK operators in relation to the 2018 compliance deadlines has recently been clarified.

In October 2017 the European Parliament and Council agreed an amendment to the EU ETS Directive intended to protect the environmental integrity of the EU ETS against a hard Brexit involving the UK’s departure from the EU ETS.

The amendment to the EU ETS Directive would have made UK issued 2018 allowances invalid for EU ETS compliance by requiring UK issued allowances to be identified and changes made to the EU ETS register so that the year of allocation and the country of origin were noted.

Member State officials at the Climate Change Committee later discussed and voted on this proposal. They agreed that UK issued 2018 allowances should not be identified with a country code and should be valid for compliance, provided that UK operators are obliged to surrender their allowances by 15th March 2019, before exit day.

The UK government published a consultation in November 2017 together with draft legislation setting out its proposal to bring forward the 2018 compliance deadline for UK operators in the EU ETS to before the date of the UK’s departure from the EU. Following near unanimous support, the Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2017 were made on the 5th December 2017 (“the Regulations”). The Regulations came into force on 27th December 2017, amending the 2018 EU ETS compliance deadlines as follows:

  • verified emission reports to be submitted by 11th March 2019 (previously 31st March 2019); and
  • surrender of allowances by 15th March 2019 (previously 30th March 2019).

The amendment therefore creates a shorter time frame for the purchase of additional allowances for surrender.

Next steps

Verifiers and operators now face the additional burden of adapting to the new compliance deadlines.

Operators should consider whether it is necessary to reallocate personnel and resources to meet the earlier deadlines and plan their compliance timetable and strategy around the rescheduled dates.

For more information contact

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