Synopsis
This order will amend the Greenhouse Gas Emissions Trading Scheme Order 2020 to update rules on the full or partial cessation of operations at UK ETS installations.
Cessation notification requirements will be updated, alongside rules on recalculating the free allocation of UK ETS allowances for sub-installations that permanently ceased operations.
Summary
The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025 will amend the Greenhouse Gas Emissions Trading Scheme Order 2020 and assimilated Activity Level Changes Regulation (EU) 2019/1842 and assimilated Free Allocation Regulation (EU) 2019/331 on a forthcoming date, which has yet to be confirmed.
This legislation will apply across the UK.
What will change?
Amendments to the Greenhouse Gas Emissions Trading Scheme Order 2020 and assimilated Free Allocation Regulation (EU) 2019/331
The term ‘ceases operation’ is updated to reflect the permanent cessation of regulated activities.
A new condition within UK ETS installation permits will require the operator to notify the regulator of the intended cessation of regulated activities in advance. Permits will be varied to include this condition as soon as reasonably practicable.
A new power enables allows regulators to issue notices stating that an installation or sub-installation has ceased operations, even though certain conditions may not have been discharged.
Amendments to the assimilated Activity Level Changes Regulation (EU) 2019/1842
The amendments made will apply rules on the recalculation of free allocations UK ETS permit holders will receive when a sub-installation ceases operation. These changes aim to ensure that free allocations will reflect actual activity levels of any sub-installation that permanently ceased operations. This replaces the current policy, where free allowances allocated in the final year of the sub-installation’s operation are retained by the operator.
Activity level reports are required for the year installations or sub-installations cease operation.
Free allocations will not need to be recalculated when cessation is due to changes improving the carbon efficiency of the installation.
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