Important EU ETS updates

Important EU ETS updates

The UK government has recently released a newsletter and documents containing important updates regarding the transition to a new UK carbon pricing scheme in 2021. The main focuses were changes to the union registry accounts, reporting in 2020 (including activity level reporting) and a consultation on the permit conditions of a UK ETS.

We have summarised the important information from these documents, below. If you would like to discuss anything mentioned in this update and how it could impact your installation, please get in touch.

Registry Accounts 

There will be no free allocation possible after 31st December 2020 including any outstanding adjustments from previous years in Phase III. 

Holding accounts in the union registry will be fully functional until the 30th April 2021, the deadline for surrendering allowances for the 2020 reporting year. However, there will be no access to UK trading accounts from 1st January 2021 and therefore these accounts will not be able to receive incoming transactions after this date. 

To retain the assets in your UK trading account they must be transferred into another account on or before 31st December 2020.

EU trading accounts can transfer allowances into UK holding accounts after 1st January 2021.

2020 Reporting

Current permits will be transferred to the new regime, be that a carbon tax or a UK ETS, in December 2020. For this reason, the Competent Authorities have asked that permit variations should be avoided from 6th November to 31st December 2020. 

•  All non-significant changes should be made through a notification before the 31st December 2020. 

•  All significant changes should also be made through a notification summarising the changes to the monitoring plan and should state that you wish to apply for a permit variation. 

The CA will respond stating that permit variations should be made in January 2021. Any outstanding permit variations in December will be asked to withdraw. In a case of a permit transfer before 2021 the regulator should be contacted.

Installations that will become ultra-low emitters in 2021 will have their permits revoked in December 2020, however, reporting obligations for 2020 still apply and emissions should still be monitored going forward to ensure compliance.

As the scheme is changing in 2021 significant capacity changes or partial cessations that occurred in 2020 do not need to be reported and there will be no task to complete on ETSWAP. 

Verification will occur as normal, with the addition of verification of data relating to activity level reporting. Where verification visits cannot occur due to COVID-19 restrictions, installations should apply for a site visit waiver through their verification body.

Activity Level reporting

The European Commission have released a draft template of the annual activity level reporting template. It is a similar format to the NIMs form and includes an import of the summary page of the approved NIMs. 2019 and 2020 activity level data should be inputted into the same template and the template attached to an additional page in the Annual Emissions Report form on ETSWAP. If installations have not applied for free allowances, then the page can be left blank. 

Installations in the Small Emitter and Hospital Opt-Out Scheme will not have this additional page added to their Annual Emissions Report. 

Reporting attributable emissions to sub installations in not mandatory but will be necessary for future NIMs exercises. The completion of this section should be discussed with your verification body.

MMP

The obligation to monitor activity level in accordance with your MMP starts as soon as it is approved by the Competent Authority. For the period of 2019 and 2020 before your MMP was approved the data should be gathered in accordance with the validated MMP that was used for the baseline period. If your MMP has been updated and approved based on better data sources and these are available, then they should be used.

UK ETS Consultation

There is a consultation out on the permit conditions of a UK ETS for full participants and participants in the Hospital and Small Emitter Opt-Out Scheme. These are very similar to the current conditions apart from the conditions relating to significant capacity reduction and partial cessation have been replaced by activity level reporting.

If you would like to discuss anything mentioned in this update, please call us on 01484 843867 or email info@swanenergy.co.uk. 

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