The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020

Made: 16th December 2020

Laid before Parliament: 17th December 2020

Laid before the Northern Ireland Assembly: 17th December 2020

Laid before the Scottish Parliament: 17th December 2020

Laid before Senedd Cymru: 17th December 2020

Coming into force in accordance with article 2

At the Court at Windsor Castle, the 16th day of December 2020

Present,

The Queen's Most Excellent Majesty in Council

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

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—

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

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

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

PART 1 — Preliminary

Citation

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This Order may be cited as the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020.

Commencement

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• (1) Except as provided by paragraph (2), this Order comes into force on 31st December 2020.

• (2) The following provisions come into force on IP completion day—

• (a) article 46 and Schedule 1 (Free Allocation Regulation amended);

• (b) article 47 and Schedule 2 (Activity Level Changes Regulation amended).

Extent

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This Order extends to the whole of the United Kingdom.

PART 2 — Greenhouse Gas Emissions Trading Scheme Order 2020 amended

Greenhouse Gas Emissions Trading Scheme Order 2020 amended

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The Greenhouse Gas Emissions Trading Scheme Order 2020 is amended in accordance with this Part.

Article 4 amended (interpretation)

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• (1) Article 4 is amended as follows.

• (2) In paragraph (1)—

• (a) after the definition of “2026-2030 allocation period” insert—

“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;

• (b) after the definition of “aircraft operator” insert—

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

• (c) after the definition of “allocation period” insert—

“allocation table” means an allocation table for the 2021-2025 allocation period or the 2026-2030 allocation period referred to in article 34A;

• (d) after the definition of “aviation activity” insert—

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

• (e) after the definition of “CCA 2008” insert—

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

• (f) after the definition of “excluded flights” insert—

“FA installation”, “FA installation for the 2021-2025 allocation period” and “FA installation for the 2026-2030 allocation period” must be construed in accordance with article 4A;

• (g) after the definition of “flight” insert—

“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;

• (h) in the definition of “Monitoring and Reporting Regulation 2018” after “of the Council” insert “ (disregarding any amendments adopted after 11th November 2020) and, except in article 24 and Schedule 4, it means that Regulation ”;

• (i) after the definition of “operator” insert—

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

• (j) in the definition of “permit” after “Schedule 7)” insert “ and, in the case of a greenhouse gas emissions permit, any monitoring methodology plan (see paragraph 4(1)(hb) and (7) of Schedule 6) ”;

• (k) after the definition of “permit” insert—

“registry” has the meaning given in paragraph 5(1) of Schedule 5A; “registry administrator” has the meaning given in article 8A;

• (l) in the definition of “surrender” for “in such a way that the allowance ceases to be available for any other purpose” substitute “ in accordance with article 27 or 34 ”;

• (m) in the definition of “Verification Regulation 2018” after “of the Council” insert “ (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 ”;

• (n) after the definition of “Verification Regulation 2018” insert—

“verification report” has the same meaning as in the Verification Regulation 2018.

Article 4A inserted

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After article 4 insert—

(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 (b) an FA installation for the 2026-2030 allocation period. (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.); (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; (b) if the operator of the installation gives a renunciation notice under Article 24 of the Free Allocation Regulation 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 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 FA installation for the 2026-2030 allocation period from— (a) the date of publication of the allocation table for the 2026-2030 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 2026-2030 allocation period under— (i) article 34H(7) (installations: errors in applications for free allocation, etc.); (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 FA installation for the 2026-2030 allocation period 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 2025 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 FA installation for the 2026-2030 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 2026-2030 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 2026-2030 allocation period.

Article 8A inserted

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After article 8 insert—

(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.

Article 9 amended (meaning of regulator)

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• (1) Article 9 is amended as follows.

• (2) After paragraph (2) insert—

(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.

Article 14 amended (meaning of UK ETS authority, etc.)

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• (1) Article 14 is amended as follows.

• (2) After paragraph (4) insert—

(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.

Article 18 amended (allowances)

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• (1) Article 18 is amended as follows.

• (2) In paragraph (1) for “direct that allowances be created” substitute “ create allowances in the registry ”.

• (3) After paragraph (2) insert—

(3) Allowances may be held only in accounts in the registry.

Article 20 amended (cap for scheme years)

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• (1) Article 20 is amended as follows.

• (2) For paragraph (1) substitute—

(1) The number of allowances created in a scheme year may not exceed the sum of— (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 allocation period, the 2026-2030 hospital and small emitter reduction factor; and (b) the balance of allowances in the new entrants' reserve on 1st January in the scheme year (see article 34G for the new entrants' reserve).

Article 21 amended (cap: hospital and small emitter reduction factors)

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• (1) Article 21 is amended as follows.

• (2) In paragraph (4)—

• (a) in sub-paragraph (a) after “verified” insert “ as satisfactory ”;

• (b) after sub-paragraph (a) insert—

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

Article 24 amended (monitoring and reporting of emissions)

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• (1) Article 24 is amended as follows.

• (2) For “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” substitute “ The Monitoring and Reporting Regulation 2018 ”.

Article 25 substituted

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For article 25 substitute—

(25) 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).

Chapter 4 of Part 2 inserted

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After article 25 insert—

(25A) Schedule 5A (registry) has effect.

Article 27A inserted

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After article 27 insert—

(27A) (1) This article applies where the operator of an installation referred to in paragraph (2) does not make an application under any of the following— (a) paragraph 5 of Schedule 7 (hospital or small emitter status for 2026-2030 allocation period); (b) paragraph 3 of Schedule 8 (ultra-small emitter status for 2026-2030 allocation period); (c) Article 4 of the Free Allocation Regulation (free allocation in 2026-2030 allocation period). (2) The installations are— (a) an installation for which a permit is issued on or before 30th June 2024; (b) an installation that is an ultra-small emitter for the 2024 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 2026-2030 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 2024 and ending on 30th June 2024. (5) The regulator must send the information submitted by the operator to the UK ETS authority on or before 30th September 2024.

Article 33 amended (reporting aviation emissions)

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• (1) Article 33 is amended as follows.

• (2) In paragraph (1) after “verified” insert “ as satisfactory ”.

• (3) In paragraph (2) for “verified in accordance” substitute “ verified as satisfactory in accordance ”.

• (4) In paragraph (3) after “under paragraph (1)” insert “ (and the verification report) ”.

Part 4A inserted

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After Part 4 insert—

(34A) (1) The UK ETS authority must compile a table (an “allocation table”) for each allocation period 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 2026-2030 allocation period, in respect of which an application for free allocation in the 2026-2030 allocation period is made under Article 4 of that Regulation. (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 2026-2030 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 2026-2030 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; or (b) an application for free allocation in the 2026-2030 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 2025; 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) for 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). (34B) (1) This article applies for the purposes of article 34A(8)(b). (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, 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, that number must be included in column B. (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. (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); (e) Article 26 of that Regulation (cessation); (f) article 34H of this Order (installations: errors in applications for free allocation, etc.). (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.) (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. (3) The UK ETS authority must publish the allocation table for the 2026-2030 allocation period as soon as reasonably practicable after it is compiled and in any event before 1st January 2026. (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). (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). (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. (34G) (1) The new entrants' reserve is a reserve of 30,249,066 allowances for the trading period. (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). (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 under Article 17(1) of the Free Allocation Regulation or Article 3a(2) of the Activity Level Changes Regulation, in chronological order of the date (and, where relevant, time) on which the operator submitted sufficient information to enable the historical activity level of the sub-installation to be determined. (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. (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. (34H) (1) This article applies where the regulator considers that, as a result of a relevant error— (a) 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 (b) 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. (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 activity level report 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), 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 that, as a result of the relevant error, 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 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, 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 FA installation for the allocation period. (8) In this article, “historical activity level” and “sub-installation” have the same meanings as in the Free Allocation Regulation. (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. (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 the person's 2010 to 2014 growth in Annex 1 activities and the person's threshold figure. (2) In this article, a person's— - “2010 to 2014 growth in Annex 1 activities” means the difference between the number of tonne-kilometres of Annex 1 activities performed by the person in 2010 and the number of tonne-kilometres of Annex 1 activities performed by the person in 2014; - “2010 to 2014 growth in aviation activity” means— 1. if the number of tonne-kilometres of aviation activity performed by the person in 2014 is greater than the number of tonne-kilometres of aviation activity performed by the person in 2010, the difference; 2. if the number of tonne-kilometres of aviation activity performed by the person in 2014 is less than or equal to the number of tonne-kilometres of aviation activity performed by the person in 2010, zero; - “aviation activity ratio” means the person's 2010 to 2014 growth in aviation activity divided by the person's 2010 to 2014 growth in Annex 1 activities; - “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. (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; and (b) in relation to which the person is an aircraft operator, and references in this Chapter to a person's “aviation free allocation entitlement” must be construed accordingly. (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) An application under this article must be submitted to the regulator on or before 31st March 2021. (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 (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). (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; 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.

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. (7) The UK ETS authority must— (a) approve the applicant's aviation free allocation entitlement, making any corrections to the calculation referred to in paragraph (1)(b) that the UK ETS authority considers appropriate; (b) inform the regulator accordingly. (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. (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). (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). (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). (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. (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. (34R) (1) This article applies where the regulator considers that, but for a relevant error, the number of allowances set out in the aviation allocation table as a person's aviation free allocation entitlement for a scheme year would be materially greater or materially less. (2) In this article, “relevant error” means— (a) an error in an application under article 34L or 34Q; (b) an error of the regulator or the UK ETS authority in the exercise of functions under this Order (including under this article). (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 but for the relevant error, 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 greater or materially less, 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). (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 article 34C(1)(b) to (f). (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). (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) either— (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; or (ii) the person was not an aircraft operator in relation to the scheme year. (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); or (b) are allocated for a scheme year in relation to which the person is not an aircraft operator. (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. (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. (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; (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 paragraph (1)(a) to (g) 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.

Article 35 amended (charges)

19

• (1) Article 35 is amended as follows.

• (2) In paragraph (1) after “regulator” in both places insert “ or the registry administrator ”.

• (3) In paragraph (2) after sub-paragraph (h) insert—

(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.

• (4) In paragraph (4) after “regulator” insert “ or the registry administrator ”.

• (5) In paragraph (5) after “regulator” in both places insert “ or, as the case may be, the registry administrator ”.

• (6) In paragraph (6) after “regulator” insert “ or the registry administrator ”.

• (7) In paragraph (7) after “regulator” insert “ or the registry administrator ”.

• (8) In paragraph (8) for “The regulator is not” substitute “ Neither the regulator nor the registry administrator is ”.

• (9) After paragraph (8) insert—

(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.

Article 36 substituted and article 36A inserted

20

For article 36 substitute—

(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. (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.

Article 37 substituted

21

For article 37 substitute—

(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.

Article 39 amended (inspections)

22

• (1) Article 39 is amended as follows.

• (2) In paragraph (1) after “this Order” insert “ , the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation ”.

Article 40 amended (powers of entry, etc.)

23

• (1) Article 40 is amended as follows.

• (2) In paragraph (1)(d)(i) after “this Order” insert “ , the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation ”.

• (3) In paragraph (2) after “this Order” insert “ , the Monitoring and Reporting Regulation 2018, the Verification Regulation 2018, the Free Allocation Regulation or the Activity Level Changes Regulation ”.

Article 44 amended (enforcement notices)

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 49 amended (regulator must publish names of persons subject to civil penalty under article 52)

25

• (1) Article 49 is amended as follows.

• (2) After paragraph (2) insert—

(3) This article is subject to article 75C (national security).

Article 65 amended (failure to comply with enforcement notice)

26

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 70 amended (right of appeal)

27

• (1) Article 70 is amended as follows.

• (2) In paragraph (1)—

• (a) in sub-paragraph (a) after “regulator” insert “ or the registry administrator ”;

• (b) for sub-paragraph (b) substitute—

(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.

• (3) In paragraph (2)—

• (a) after sub-paragraph (b) insert—

(ba) article 34H(4) (notice of regulator's estimate of value of parameter); (bb) article 34V (return of allowances: notice to operator, etc.);

• (b) in sub-paragraph (c) for “article 44(1)” substitute “ article 44(1) or (2A) ”;

• (c) after sub-paragraph (g) insert—

(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); (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);

• (d) after sub-paragraph (m) insert—

(n) Article 8(6)(b) of the Free Allocation Regulation (notice rejecting monitoring methodology plan); (o) Article 3(5) of the Activity Level Changes Regulation (notice of regulator's estimate of value of parameter in activity level report).

• (4) For paragraph (4) substitute—

(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.

Article 71 amended (appeal body)

28

• (1) Article 71 is amended as follows.

• (2) After paragraph (3) insert—

(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.

Article 72 amended (effect of appeals)

29

• (1) Article 72 is amended as follows.

• (2) In paragraph (1) for “paragraphs (2) to (4)” substitute “ paragraphs (2) to (6) ”.

• (3) In paragraph (2)(c)—

• (a) after paragraph (i) insert—

(ia) article 34W(1) (notice to withhold allowances);

• (b) in paragraph (ii) for “article 44(1)” substitute “ article 44(1) or (2A) ”;

• (c) after paragraph (ii) insert—

(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); (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);

• (d) after paragraph (v) insert—

(vi) Article 8(6)(b) of the Free Allocation Regulation (notice rejecting monitoring methodology plan).

• (4) After paragraph (5) insert—

(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).

Article 73 amended (determination of appeals)

30

• (1) Article 73 is amended as follows.

• (2) In paragraph (1)(d) after “regulator's” insert “or the registry administrator's”.

Article 75 amended (information notices)

31

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Articles 75A to 75C inserted

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After article 75 insert—

(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. (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 ; (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. (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. (75C) (1) The UK ETS authority may not publish any information under article 34D (allocation tables: publication, etc.) or 34N (aviation allocation table) 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); (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).

Article 77 amended (transitional provisions)

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• (1) Article 77 is amended as follows.

• (2) After paragraph (3) insert—

(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.

Schedule 3 amended (applications, notices, etc.)

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• (1) Schedule 3 is amended as follows.

Paragraph 1 amended (submission of applications, notices, etc. to regulators)2In paragraph 1—aafter sub-paragraph (1)(a) insert—aathe Monitoring and Reporting Regulation 2018;abthe Verification Regulation 2018;acthe Free Allocation Regulation;adthe Activity Level Changes Regulation;;bin sub-paragraph (5) after “previous application made to the regulator” insert “ (including an application under GGETSR 2012) ”;cin sub-paragraph (11) for “as the regulator may require” substitute “ as may be required ”.

Paragraph 2 amended (determination of applications by regulators)3In paragraph 2(5), before sub-paragraph (a) insert—zaarticle 34L (application for aviation free allocation entitlement);zbarticle 34Q (application for transfer of aviation free allocation entitlement);.

Heading to Part 2 amended4In the heading to Part 2 for “or UK ETS authority” substitute “ , UK ETS authority or registry administrator ”.

Paragraph 3 amended (service of notices, etc.)5In paragraph 3—aafter sub-paragraph (1)(c) insert—dthe registry administrator.;bin sub-paragraph (3)(b) after “service of notices or directions” insert “ (including an address provided under GGETSR 2012) ”;cafter sub-paragraph (3) insert—3AA notice may be given by the registry administrator to a person who holds an account—ain any of the ways set out in paragraph (3);bby sending it by electronic means in the registry.;dafter sub-paragraph (6) insert—7In 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..

Schedule 4 amended (modifications to Monitoring and Reporting Regulation 2018)

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• (1) Schedule 4 is amended as follows.

• (2) In the heading for “Commission Regulation (EU) 2018/2066” substitute “ Monitoring and Reporting Regulation 2018 ”.

• (3) In paragraph 1—

• (a) for “Commission Implementing Regulation (EU) 2018/2066” substitute “ The Monitoring and Reporting Regulation 2018 ”;

• (b) after paragraph (a) insert—

(aa) for “greenhouse gas emissions permit” in each place there were substituted “ permit ”;

• (4) For paragraph 4(e) substitute—

(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;

• (5) In paragraph 11 before sub-paragraph (a) insert—

(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.

• (6) After paragraph 31 insert—

(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 CO2(e). The total annual emissions of the installation shall be calculated as the sum of these three rounded values.

• (7) Omit paragraph 33(c).

• (8) After paragraph 38(a) insert—

(aa) in section 8, in subsection B, in calculation method B (overvoltage method) for “FCF2F6” in both places there were substituted “ FC2F6 ”;

Schedule 5 substituted

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For Schedule 5 substitute—