Transposition of EU Directive 2009/29/EC revising EU Directive 2003/87/EC: a public consultation

The EU Emissions Trading System (ETS) is one of the key policies introduced by the European Union in 2005 to help meet its greenhouse gas emissions targets, and is a central component of the UK Government’s policy for delivering emissions reductions in the UK and across the EU in line with our UK and EU targets.

Phase III of the EU ETS starts on 1 January 2013. The purpose of this consultation is to seek views on the draft 2012 Greenhouse Gas Emissions Trading System Regulations (2012 GHG Regulations) which will update the existing UK Regulations and give force to the new provisions set out in the revised EU ETS Directive (EU Directive 2009/29/EC) from 2013. This Directive, revising EU Directive 2003/87/EC, improves and extends the EU ETS for Phase III with the introduction of a centralised, EU-wide cap on emissions, new sectors and gases, and harmonised rules on free allocation with a move toward greater auctioning of allowances.

The main changes proposed in the draft 2012 GHG Regulations include:

• consolidating 13 sets of regulations into a single Statutory Instrument - this will integrate requirements for aircraft and stationary operators to reduce duplication and repeal a number of existing regulations.
• introducing an opt-out scheme for eligible small emitters and hospitals during Phase III of the EU ETS (as provided for in Article 27 of the ETS Directive) to address disproportionate regulatory burden
• achieving a more proportionate and consistent penalties regime for stationary and aircraft operators by moving to a regime of civil sanctions only, and improving regulator discretion in applying them
• using the First-tier Tribunal (FTT) for hearing appeals in England and Wales in order to improve the independence and efficiency of the process, and ensure alignment with wider government policy on handling appeals