EU Emissions Trading System

The EU Emissions Trading System (EU ETS) is one of the key policies introduced by the EU to address greenhouse gas emissions and help meet its 2020 emission reduction targets. The EU ETS will also contribute to delivering Scotland’s goal of a 42% reduction in CO2 emissions by 2020 and 80% by 2050 compared to 1990 levels.

Installations and aircraft operators covered by the EU ETS are those which carry out activities listed in Annex I of the EU ETS Directive. These activities include combustion, production and processing of metals, production of chemicals, mineral industries, pulp and paper industries, carbon capture and storage and flights departing from or arriving in the EU.

This web page has been designed to assist operators, or others responsible for managing carbon emissions, by providing the necessary information and guidance for participation in the EU ETS. This site may also be useful to students and others wanting to learn more about the trading system.

NIMs data collection exercise

UK participation in the 2019 NIMs data collection exercise will give eligible UK operators of installations the opportunity to apply for free allocation of allowances if the UK remains in the EU ETS post-2020 (for all or part of Phase IV). As previously communicated, continued UK membership of the EU ETS post-EU Exit is being considered alongside a range of options including a carbon emissions tax and a UK ETS (linked or standalone).

This applies to UK operators of stationary installations who have, or expect to have, a greenhouse gas emissions permit on or before 30 June 2019 that want to be eligible for free allocation. This also applies to operators who do not believe they require or are not eligible for allocation (for example electricity generators, as defined by Article 3(u) of the ETS Directive) – the level of information required will however be different. 

The rules for the NIMS data collection

The rules governing the data collection exercise come from the Commission Delegated Regulation (EU) 209/331 of 19 December 2018, The Free Allocation Regulation which came into force on 28 February 2019. The European Commission has prepared a suite of guidance documents relating to the requirements. Most are now published on the European Commission's website but they are also in the Related Items section on this page. The templates for submitting information can be downloaded from the related items.

What you need to submit – by 30 June 2019

Any UK operator that wishes to be eligible to apply for a free allocation of allowances for 2021 to 2025 must submit a ‘full’, independently verified, NIMs return to the relevant regulator (EA in England, SEPA in Scotland, NRW in Wales, NIEA in Northern Ireland and OPRED for offshore installations) by 30 June 2019.

Our previous NIMs newsletter (issue 33, January 2019) explained that the UK Government and Devolved Administrations are minded to offer schemes for operators that are eligible under Article 27 and Article 27A of the EU ETS Directive. For these schemes, participants will not be required to surrender allowances.

However, if for any reason eligible operators are unsure about whether to participate in these schemes, or if they think that they may exceed the threshold for this type of installation during the first allocation period, they must submit the full, independently verified, NIMs data to their regulator in order to be eligible for free allocation.

Please note that any Article 27 and 27a policy at this moment is provisional and may change, including as a result of stakeholder responses to the public consultation. Any such schemes would also ultimately be subject to Commission approval.

It is for each operator to decide whether to participate in the 2019 NIMs data collection exercise, taking into account the consequences of not submitting an application on time (e.g. ineligibility for free allocation).

Type of EU ETS operator

NIMs baseline report

Monitoring methodology plan (MMP)

Verification report with   positive opinion

Supporting evidence for MMP

Deadline for submissions

Electricity generator

Sheet A only

No

No

No

30 June 2019

 

Article 27a

Sheet A and D.1.2

No*

No*

No*

30 June 2019

Article 27

Sheet A and D.1.2

No*

No*

No*

30 June 2019

 

Operators not applying for a   free allocation

Sheet A only

No*

No*

No*

30 June 2019

Eligible operators applying for a free allocation of allowances

All sheets except B+C

Yes

Yes

Yes

30 June 2019

 

Operators who obtained a   permit before 30 June 2019 but have not operated in the baseline period

Sheet A

Yes

No

Yes

30 June 2019

*To note that by opting to not complete these sections an operator renders itself ineligible for free allocation under the EU ETS for 2021-2025

Webinar on data collection

On 21 March, a two hour webinar session covering the following topics was delivered to around 135 participants. The presentations including the Q&A session is available by clicking on the links below:

EU ETS Article 27/27a Information Session - NIMs data collection webinar

Civil penalties

Participants or operators who have not complied with their legal requirements and received a penalty:

RWG (Repair and Overhauls) Limited

Failure to comply with Regulation 9 of the Greenhouse Gas Emissions Trading Regulations 2012. A regulated activity was carried out at the Tullos Test Facility from 1 January 2013 to 01 August 2017 without a permit.

Penalty  £55,106.53 (published August 2018)

Shell (UK) Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation at Fife NGL Plant by 30 April 2013, 30 April 2014 and 30 April 2015.

Penalty £40,056.00 (published July 2018)

ENGIE FM Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation by 30 April 2015.

Penalty £35,224 (published June 2018).

Hillhouse Quarry Group Limited

Failure to comply with Regulation 9 of the Greenhouse Gas Emissions Trading Regulations 2012. A regulated activity was carried out at Hillhouse Quarry from 1 January 2013 to 15 September 2015 without a permit.

Penalty £31,533.10 (published December 2017)

Marathon Oil Corporation

Failure to comply with Regulation 26(1) of the Aviation Greenhouse Gas Emissions Trading Scheme Regulations 2010. The operator did not surrender sufficient allowances or project credits equal to their aviation emissions for the 2012 calendar year by 30 April 2013.

Penalty £56,884.02 (published May 2017)

Simec Lochaber Hydropower 2 Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation by 30 April 2014.

Penalty £728 (published May 2017)

Aggregate Industries (UK) Limited

Failure to comply with Regulation 9 of the Greenhouse Gas Emissions Trading Regulations 2012. A regulated activity was carried out at Chryston Works from 1 January 2013 to 9 March 2015 without a permit.

Penalty £6854.10 (published February 2017)

Repsol Sinopec Resources UK Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation by 30 April 2015.

Penalty £40,501 (published February 2017)

DSM Nutritional Products (UK) Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation by 30 April 2014.

Penalty £4,690 (published July 2016)

Aggregate Industries (UK) Limited

Failure to comply with condition 2 of a Greenhouse Gas Emissions permit. The operator did not submit the annual emission report for 2013 by 31 March 2014 and the late report did not include all the annual reportable emissions for that reporting year.

Penalty £2,812 (published March 2016).

Talisman Sinopec Energy (UK) Limited

Failure to comply with condition 4 of a Greenhouse Gas Emissions Permit. The operator did not surrender sufficient allowances to cover its annual reportable emissions from the installation by 30 April 2014.

Penalty £40,804 (published March 2016).

Contact us

If you have any questions or require any further information or advice on any aspect of the ETS, please contact us.