The Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2014

• Citation: S.I. 2014/3125
• Sections: 22

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2014 and come into force on 22nd December 2014.

(2) In these Regulations a reference to a numbered regulation or a numbered Schedule is to that regulation of, or Schedule to, the Greenhouse Gas Emissions Trading Scheme Regulations 2012 .

Section 2 Amendments to definitions

In regulation 3(1)—

(a) for the definition of “aviation activity”, substitute—

“aviation activity”—

in respect of paragraphs (2) to (9) of Schedule 7, has the meaning given in paragraph 1A of that Schedule; or

otherwise, means an activity listed in the table in Annex I to the Directive under the section titled ‘Aviation’, excluding the activities listed under—

points (a) to (j) of that section; and

point (k) of that section, but as if the reference to “1 January 2013” is to “1 January 2015”;

(b) for the definition of “aviation emissions”, substitute—

“aviation emissions” means emissions of carbon dioxide arising from an aviation activity;

(c) after the definition of “chief inspector”, insert—

“commercial air transport operator” has the meaning given in Article 3(p) of the Directive;

(d) after the definition of “excluded installation emissions permit”, insert—

“exempt non-commercial air transport operator” means a UK administered operator who—

is a non-commercial air transport operator; and

has annual reportable emissions of less than 1,000 tonnes;

(e) after the definition of “new operator”, insert—

“non-commercial air transport operator” means any UK administered operator who is not a commercial air transport operator;

(f) for the definition of “the Offshore Regulations”, substitute—

“the Offshore Regulations ” means the Offshore Combustion Installations (Pollution Prevention and Control) Regulations 2013;

Section 3 Powers of entry: offshore installations

For paragraphs (2) and (3) of regulation 17, substitute—

(2) The powers exercisable under paragraph (1) are the powers in regulation 25 of the Offshore Regulations (but subject to regulation 26 of those Regulations).

(3) Regulations 34(2)(d) and (e) of the Offshore Regulations apply to a failure to comply with an obligation imposed pursuant to a power exercisable under paragraph (1) as they apply to a failure to comply with an obligation imposed pursuant to regulation 25 of the Offshore Regulations.

Section 4 Amendments to definitions: aviation

In regulation 20—

(a) after the definition of “emissions plan”, insert—

“Eurocontrol” means the European organisation for air safety navigation;

“excluded aviation activity” means—

in respect of the scheme year 2013, an activity consisting in—

a flight departing from, or arriving in, an aerodrome situated in any country other than an EEA state or Croatia; or

an outermost region flight;

in respect of any other scheme year, an activity consisting in—

a flight departing from, or arriving in, an aerodrome situated in any country other than an EEA state; or

an outermost region flight;

“excluded aviation emissions” means aviation emissions arising from an excluded aviation activity;

(b) after the definition of “member State”, insert—

“non-UK operator” has the meaning given in regulation 24(2);

“outermost region” means—

in respect of the scheme year 2013, the Canary Islands, French Guiana, Guadeloupe, Martinique, Réunion, Saint-Martin, the Azores, or Madeira;

in respect of any other scheme year, the Canary Islands, French Guiana, Guadeloupe, Martinique, Mayotte, Réunion, Saint-Martin, the Azores, or Madeira;

“outermost region flight” means—

in respect of the scheme year 2013, a flight between an aerodrome located in an outermost region and an aerodrome located in—

a different outermost region;

an area of an EEA state which is not an outermost region; or

Croatia;

in respect of any other scheme year, a flight between an aerodrome located in an outermost region and an aerodrome located in—

a different outermost region; or

an area of an EEA state which is not an outermost region;

(c) after the definition of “registered office”, insert—

“Small Emitters Tool Regulation” means Commission Regulation (EU) No 606/2010 on the approval of a simplified tool developed by the European organisation for air safety navigation (Eurocontrol) to estimate the fuel consumption of certain small emitting aircraft operators , as amended from time to time;

Section 5 Application for an emissions plan by a UK administered operator

(1) This regulation applies to regulation 32.

(2) For paragraph (1), substitute—

(1) Subject to paragraphs (3), (4), (6) and (7), a UK administered operator (“A”) must apply to the regulator for a monitoring plan where required by Article 51(1) and within the period of time required by that Article.

(3) In paragraph (2), before “plan”, insert “draft”.

(4) After paragraph (6) insert—

(7) This regulation does not apply to a UK administered operator who commences aviation activities during the scheme years 2015 or 2016.

Section 6 Application for an emissions plan by a UK administered operator: 2015 activities , 2016 activities and post-2016 activities

After regulation 32, insert—

Application for an emissions plan by a UK administered operator: 2015 activities and 2016 activities

(32A)

(1) This regulation applies to a UK administered operator (“B”) who commences aviation activities other than excluded aviation activities during the scheme years 2015 (“the 2015 activities”) or 2016 (“the 2016 activities”).

(2) Subject to paragraphs (3) to (7), B must apply to the regulator for a monitoring plan by the application date.

(3) Where B is unable to foresee the date on which B is due to commence, as appropriate, the 2015 activities or the 2016 activities, B must—

(a) apply to the regulator for a monitoring plan without delay after B is aware that B will commence, as appropriate, the 2015 activities or the 2016 activities and in any event by a date no later than 6 weeks after the date on which the 2015 activities or the 2016 activities commence; and

(b) include with the application a written explanation of why B was unable to comply with paragraph (2).

(4) Paragraph (5) applies where B is unable to comply with paragraph (2) by reason only that B’s administering member State, referred to in Article 18a of the Directive, is not known by the application date.

(5) Where this paragraph applies B must—

(a) apply to the regulator for a monitoring plan in respect of, as appropriate, the 2015 activities or the 2016 activities, without delay once information on B’s administering member State becomes available; and

(b) include with the application a written explanation of why B was unable to comply with paragraph (2).

(6) Paragraph (7) applies where B was a non-UK operator and becomes a UK administered operator after the transferred operator cut-off date.

(7) Where this paragraph applies, B must apply to the regulator for a monitoring plan by the transferred operator application date.

(8) In this regulation—

(a) “application date” means—

(i) in the case of 2015 activities, the later of 31st January 2015 or the date which is 4 months before the date on which the 2015 activities are due to commence; and

(ii) in the case of 2016 activities, the date which is 4 months before the date on which the 2016 activities are due to commence;

(b) “transferred operator application date” means—

(i) in the case of 2015 activities, the later of 31st January 2015 or the last day of the 8 week period beginning with the date on which B becomes a UK administered operator; and

(ii) in the case of 2016 activities, the last day of the 8 week period beginning with the date on which B becomes a UK administered operator; and

(c) “transferred operator cut-off date” means the date which is 6 months before the date on which the 2015 activities, or 2016 activities, as appropriate, are due to commence.

Application for an emissions plan by a UK administered operator: post-2016 activities

(32B)

(1) This regulation applies—

(a) to a UK administered operator (“C”) who commences only excluded aviation activities during the scheme years 2015 or 2016; and

(b) where C carries out aviation activities after 31st December 2016 (“post-2016 activities”).

(2) Subject to paragraphs (3) to (7), C must apply to the regulator for a monitoring plan in respect of C’s post-2016 activities by a date which is no later than 4 months before the date on which C’s post-2016 activities are due to commence (“the application date”).

(3) Where C is unable to foresee the date on which C is due to commence post-2016 activities, C must—

(a) apply to the regulator for a monitoring plan in respect of C’s post-2016 activities without delay after C is aware that C will commence the post-2016 activities and in any event by a date no later than 6 weeks after the date on which the post-2016 activities commence; and

(b) include with the application a written explanation of why C was unable to comply with paragraph (2).

(4) Paragraph (5) applies where C is unable to comply with paragraph (2) by reason only that C’s administering member State, referred to in Article 18a of the Directive, is not known by the application date.

(5) Where this paragraph applies, C must—

(a) apply to the regulator for a monitoring plan in respect of C’s post-2016 activities without delay once information on C’s administering member State becomes available; and

(b) include with the application a written explanation of why C was unable to comply with paragraph (2).

(6) Paragraph (7) applies where C was a non-UK operator and becomes a UK administered operator after the transferred operator cut-off date.

(7) Where this paragraph applies, C must apply to the regulator for a monitoring plan by the transferred operator application date.

(8) In this regulation—

(a) “transferred operator application date” means the last day of the 8 week period beginning with the date on which C becomes a UK administered operator; and

(b) “transferred operator cut-off date” means the date which is 6 months before the post-2016 activities are due to commence.

Application for an emissions plan by a UK administered operator: general

(32C)

(1) An application for a monitoring plan under regulation 32A or 32B must include a draft plan to monitor the UK administered operator’s aviation emissions, together with the supporting documents which are required to be submitted under Article 12(1).

(2) If a UK administered operator has previously been issued with an emissions plan (“the existing plan”)—

(a) an application under regulation 32A or 32B may not be made without the agreement of the regulator; and

(b) any plan issued under regulation 34(1)(a) replaces the existing plan.

Section 7 Requirement to notify the regulator if no application is made for an emissions plan

(1) This regulation applies to regulation 33.

(2) In the heading to the regulation, at the end, insert “before 1st January 2015”.

(3) In paragraph (1), for “Without”, substitute “Subject to paragraph (4), without”.

(4) After paragraph (3), insert—

(4) This regulation does not apply after 31st December 2014.

Section 8 Requirement to notify the regulator if an emissions plan is not applied for on or after 1st January 2015

After regulation 33, insert—

Requirement to notify the regulator if an emissions plan is not applied for on or after 1st January 2015

(33A)

(1) Where a person (“B”)—

(a) becomes a UK administered operator on or after 1st January 2015; but

(b) is not required to apply for a monitoring plan under regulation 32 or 32A,

B must, by the relevant date, notify the regulator in accordance with paragraph (2).

(2) Where—

(a) the relevant date is before 1st September 2016, the notification must state that—

(i) B does not expect to commence an aviation activity within the four-month period beginning with the relevant date; or

(ii) B does expect to commence an aviation activity within the four-month period beginning with the relevant date, but B expects to carry out only excluded aviation activities within that four-month period;

(b) the relevant date is on or after 1st September 2016, the notification must state that B does not expect to commence an aviation activity within the four-month period beginning with the relevant date.

(3) For the purposes of this regulation, the “relevant date” is the last day of the period of 12 weeks beginning with the date on which B became a UK administered operator.

Section 9 Issue of an emissions plan

In regulation 34(1), for “regulation 32”, substitute “regulation 32, 32A or 32B,”.

Section 10 Monitoring and reporting emissions

(1) This regulation applies to regulation 35.

(2) In paragraph (1), for “Once” substitute “Subject to paragraph (5), once”.

(3) In paragraph (2), for “Monitoring” substitute “Subject to paragraph (5), monitoring”.

(4) In paragraph (3), before “A” insert “Subject to paragraphs (6) and (7),”.

(5) In paragraph (4), for “The report” substitute “Subject to paragraphs (6) to (8), the report”.

(6) After paragraph (4), insert—

(5) The obligation to monitor aviation emissions does not apply in respect of excluded aviation emissions for the scheme years 2015 and 2016.

(6) The obligation to prepare and to submit to the regulator a verified report of aviation emissions does not apply—

(a) in respect of excluded aviation emissions, for the scheme years beginning with 2013 and ending with 2016; or

(b) where, for the scheme years 2013 or 2014, A was an exempt non-commercial air transport operator.

(7) The obligation for the report to be verified in accordance with the Verification Regulation does not apply where—

(a) A has annual reportable emissions of less than 25,000 tonnes; and

(b) A has determined its emissions using the small emitters tool approved under the Small Emitters Tool Regulation and populated with data by Eurocontrol.

(8) The verified report for the scheme year 2013 must be submitted to the regulator by 31st March 2015.

Section 11 Variation of an emissions plan

In regulation 37, after paragraph (3), insert—

(3A) The regulator may, by giving notice to a UK administered operator, vary an emissions plan in order to take account of any amendments to the Directive which may be made from time to time.

Section 12 Revocation of regulation 42

(1) Regulation 42 is revoked.

(2) Where—

(a) regulation 42 applied to a person (“P”) before its revocation; and

(b) P did not comply with regulation 42,

no civil penalty applies to P in respect of the non-compliance.

Section 13 Surrender of allowances: UK aircraft operators

After regulation 42, insert—

Surrender of allowances: UK aircraft operators: 2013, 2014 and subsequent scheme years

(42A)

(1) Subject to paragraphs (3) and (4), by 30th April 2015, a UK administered operator (“A”) must surrender a number of allowances or aviation allowances equal to the sum of A’s annual reportable emissions in the scheme years 2013 and 2014.

(2) Subject to paragraph (3) and regulation 42B, for each scheme year beginning with 2015, A must, by the following 30th April, surrender a number of allowances or aviation allowances equal to A’s annual reportable emissions in that scheme year.

(3) For each scheme year beginning with 2013 and ending with 2016, the duty in paragraphs (1) and (2) does not apply in respect of A’s excluded aviation emissions.

(4) The duty in paragraph (1) does not apply for a scheme year in which A was an exempt non-commercial air transport operator.

Surrender of a deficit of allowances: UK administered operators

(42B)

(1) Paragraphs (2) and (3) apply where a deficit arises in respect of compliance by a UK administered operator with regulation 42A(1) or 42A(2) for a scheme year (the “non-compliance year”).

(2) Where the deficit does not result from an error in the verified emissions report submitted by the UK administered operator, the amount of allowances or aviation allowances that the UK administered operator is required to surrender under regulation 42A(2) for the recovery year is increased by an amount of allowances or aviation allowances equal to the deficit.

(3) Where the deficit results from an error in the verified emissions report submitted by the UK administered operator, the amount of annual reportable emissions of the UK administered operator in the year in which the error is discovered, for the purpose of regulation 42A(2), is increased by an amount of annual reportable emissions equal to the deficit.

(4) In this regulation—

(a) “deficit” means a shortfall in the number of allowances or aviation allowances surrendered, calculated as—

(i) where the non-compliance year is any scheme year beginning with 2013 and ending with 2016, x − y − z , where—

‘x’ is the amount of annual reportable emissions arising in the non-compliance year;

‘y’ is the amount of excluded aviation emissions arising in the non-compliance year (expressed in tonnes of carbon dioxide equivalent); and

‘z’ is the amount of allowances or aviation allowances which the UK administered operator surrendered for the non-compliance year; and

(ii) where the non-compliance year is any scheme year beginning with 2017, x − y , where—

‘x’ is the amount of annual reportable emissions arising in the non-compliance year; and

‘y’ is the amount of allowances or aviation allowances which the UK administered operator surrendered for the non-compliance year; and

(b) the “recovery year” means, in respect of a failure to comply with—

(i) regulation 42A(1), the scheme year 2015; or

(ii) regulation 42A(2), the scheme year following the non-compliance year.

Section 14 Failure to surrender allowances

In regulation 54(1), for “regulation 42”, substitute “regulation 42A”.

Section 15 Failure to submit an application for an emissions plan

(1) This regulation applies to regulation 60.

(2) In paragraph (1), for “A UK administered operator”, substitute “Subject to paragraphs (3) and (4), a UK administered operator”.

(3) In paragraph (1)(a), for “regulation 32(1)”, substitute “regulation 32(1), 32A(2) or 32B(2)”.

(4) In paragraph 1(b), for “regulation 32(4)”, substitute “regulation 32(4), 32A(3)(b), 32A (5)(b), 32B(3)(b) or 32B(5)(b)”.

(5) After paragraph (2), insert—

(3) A is not liable to a civil penalty for a failure to apply to the regulator for a monitoring plan, contrary to regulation 32(1), in so far as the duty to apply arose—

(a) before 1st January 2015; and

(b) only in relation to excluded aviation activities.

(4) To the extent that A was required to apply to the regulator for a monitoring plan under regulation 32(1), A is not liable to a civil penalty for a failure to apply where—

(a) the duty to apply arose before 1st January 2015; and

(b) when the duty arose, A was an exempt non-commercial air transport operator.

Section 16 Failure to notify the regulator if an emissions plan is not applied for

(1) This regulation applies to regulation 61.

(2) In paragraph (1), for “A UK administered operator”, substitute “Subject to paragraph (3), a UK administered operator” and after “regulation 33(1)”, insert “or regulation 33A(1)”.

(3) After paragraph (2), insert—

(3) A is not liable to a civil penalty for a failure to comply with regulation 33(1), where the duty under that regulation arose before 1st January 2015 and, at the time the duty arose—

(a) A carried out only excluded aviation activities; or

(b) A was an exempt non-commercial air transport operator.

Section 17 Failure to monitor aviation emissions

(1) This regulation applies to regulation 63.

(2) In paragraph (1), for “A UK administered operator”, substitute “Subject to paragraph (3), a UK administered operator”.

(3) After paragraph (2), insert—

(3) A is not liable to a civil penalty for a failure to monitor aviation emissions for the scheme years 2013 or 2014 in so far as—

(a) the duty to monitor arose in respect of excluded aviation activities; or

(b) in that scheme year, A was an exempt non-commercial air transport operator.

Section 18 Failure to report aviation emissions

(1) This regulation applies to regulation 64.

(2) For paragraph (1), substitute—

(1) Subject to paragraph (3), a UK administered operator (“A”) is liable to the civil penalties in paragraph (2) where A fails to report (or to report on time) aviation emissions, contrary to—

(a) for the scheme year 2013, regulation 35(8); or

(b) for any other scheme year, regulation 35(4).

(3) After paragraph (2), insert—

(3) A is not liable for a civil penalty for a failure to report, by 31st March 2014, aviation emissions for the scheme year 2013.

Section 19 Savings and transitional provisions: the 2010 Regulations

(1) In regulation 87(5), for “Regulations”, substitute “Subject to regulation 87AA, regulations”.

(2) After regulation 87A insert—

Obligations in relation to aviation emissions arising before 2013: deficits

(87AA)

(1) Paragraph (2) applies where—

(a) a duty is imposed on a person (“P”) under regulation 26 of the 2010 Regulations;

(b) the condition in regulation 87A(3) is satisfied; and

(c) P fails to surrender sufficient allowances or project credits, contrary to regulation 26(1) of the 2010 Regulations.

(2) Where this paragraph applies, no duty arises to surrender allowances or project credits equal to the deficit to which regulation 26(2) of the 2010 Regulations applies, in so far as the duty to surrender arises in respect of P’s international emissions.

(3) Paragraph (4) applies where—

(a) the regulator has given a person (“Q”)—

(i) a 2012 excess emissions penalty notice; and

(ii) a deficit notice; and

(b) Q brings a 2012 excess emissions penalty notice appeal.

(4) Where this paragraph applies—

(a) the 2012 excess emissions penalty appeal is deemed to include an appeal against the deficit notice; and

(b) the bringing of the 2012 excess emissions penalty appeal suspends the operation of the deficit notice pending the final determination or withdrawal of the appeal.

(5) Where paragraph (4) applies, the appeal body may, in respect of the deficit notice—

(a) affirm it;

(b) quash all or part of it;

(c) vary it; or

(d) give directions to the regulator in relation to it.

(6) In this regulation—

(a) “2012 excess emissions penalty appeal” means an appeal under regulation 52(3)(b) of the 2010 Regulations, against a 2012 excess emissions penalty notice;

(b) “2012 excess emissions penalty notice” means a notice under regulation 30(1)(a) of the 2010 Regulations that P is liable to a civil penalty under regulation 38(1)(a) of the 2010 Regulations, for a failure to surrender sufficient allowances or project credits for the calendar year beginning on 1st January 2012;

(c) “deficit notice” means a notice given under regulation 26(2)(a) of the 2010 Regulations; and

(d) “international emissions” has the meaning given in regulation 87A(1).

Section 20 Allocation of allowances: interpretation

After paragraph 1 of Schedule 7, insert—

Interpretation

(1A) For the purpose of paragraphs (2) to (9) of this Schedule, “aviation activity” means an activity listed in the table in Annex I to the Directive under the section titled ‘Aviation’, but—

(a) excluding the activities listed under points (a) to (j) of that section, and

(b) disapplying the exclusion in point (k) of that section.

Section 21 Allocation of aviation allowances from the special reserve

(1) This regulation applies to Schedule 8.

(2) In paragraph 5, for “benchmarking year”, substitute “second calendar year in the trading period”.

(3) In paragraph 8, after “Article 3f(7), insert “and Article 28a(2)”.

(4) After paragraph 8 of Schedule 8, insert—

Maximum allocation of aviation allowances from the special reserve

(9) An allocation of allowances to be issued from the special reserve under Article 3f of the Directive in any trading period must not exceed 1,000,000 allowances.

Section 22 Aircraft operator bans

After paragraph 1(4) of Schedule 10, insert—

(5) A request from the Secretary of State to the European Commission under Article 16(5) of the Directive must include—

(a) evidence that A has not complied with its obligations under these Regulations;

(b) details of any enforcement action against A that has been taken by the regulator;

(c) a justification for the imposition of an operating ban under Article 16(5) of the Directive; and

(d) a recommendation for the scope of the operating ban and any conditions that should be applied.