The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025

The United Kingdom Emissions Trading Scheme (the “UK ETS”) was established by the Greenhouse Gas Emissions Trading Scheme Order 2020 (the “UK ETS Order”). Operators of certain industrial “installations” that engage in a “regulated activity” are required to monitor, report on, and surrender “allowances” equivalent to, their greenhouse gas emissions in each “scheme year”. Allowances are sold at auction, but some participants receive an allocation of allowances free of charge each scheme year, the number depending on the installation’s activity levels from year to year. For installations that meet the eligibility criteria, there are two schemes in addition to the main scheme, one for “hospitals or small emitters”, the other for “ultra-small emitters”. Operators of installations in the main scheme and in the hospital and small emitters scheme are required to have a permit.