The Vehicle Emissions Trading Schemes Order 2023

• Citation: S.I. 2023/1394
• Sections: 250

Section 1 Citation and commencement

This Order may be cited as the Vehicle Emissions Trading Schemes Order 2023 and comes into force on the later of—

(a) 1st January 2024; or

(b) the day which is 21 days after the day on which this Order is made.

Section 2 Extent

(1) This Order extends to England and Wales and Scotland, subject to paragraph (2) and paragraph (3) .

(2) This Part and Part 8 extend to England and Wales, Scotland and Northern Ireland.

(3) On and after 1st January 2025, Parts 2 to 7 and 9 extend to England and Wales, Scotland and Northern Ireland.

Section 3 Interpretation

(1) In this Order—

“ administrator ” means the administrator of the Trading Schemes, appointed in accordance with article 6(1);

“ allowance ” means a CCTS allowance, a CRTS allowance, a VCTS allowance or a VRTS allowance;

“ approval authority ” means the authority with competence for all aspects of the type-approval of a vehicle, or of the individual vehicle approval, in accordance with Regulation (EU) 2018/858 ;

“ base vehicle ” means a vehicle which is used at the initial stage of a multi-stage type-approval;

“ baseline ”—

in relation to a CCTS participant, is the number resulting from the calculation applicable to that participant which is specified in Part 1 of Schedule 1; and

in relation to a VCTS participant, is the number resulting from the calculation applicable to that participant which is specified in Part 2 of Schedule 1;

“ car ” means a passenger car, other than an SPV, which is a vehicle of category M1;

“ car club ” means a person who meets the conditions in Schedule 2;

“ car club service ” means the service described in paragraph 2 of Schedule 2;

“ CCTS ” means the Non-Zero-Emission Car CO 2 Trading Scheme, established by article 4(1)(b);

“ CCTS allowance ” has the meaning given in article 33;

“ CCTS participant ” means a manufacturer which is a CCTS participant in accordance with article 32(1) or a group of manufacturers which is a pool CCTS participant in accordance with article 32(2);

“ certificate of conformity ”, in relation to a car, a van, an SPV or a base vehicle, means the document referred to in Articles 36 and 37 of Regulation (EU) 2018/858 and issued by a manufacturer which certifies that the vehicle conforms to the approved type of vehicle and complies with all regulatory requirements applicable at the time of its production;

“ civil penalty ” means a financial penalty or non-financial penalty which may be imposed under articles 97 to 106;

“ complete ”, in relation to a van or a base vehicle, means a van or a base vehicle which does not need to be completed in order for that vehicle to satisfy the relevant technical requirements of Regulation (EU) 2018/858 ;

“ completed ”, in relation to a van, means a van resulting from a multi-stage type-approval which satisfies the relevant technical requirements of Regulation (EU) 2018/858 ;

“ connected ”, in relation to two or more manufacturers, means connected within the meaning of section 1122 of the Corporation Tax Act 2010 ;

“ credit ” means a CRTS credit or a VRTS credit;

“ CRTS ” means the Non-Zero-Emission Car Registration Trading Scheme, established by article 4(1)(a);

“ CRTS allowance ” has the meaning given in article 12(1);

“ CRTS credit ” means a CRTS credit acquired in accordance with articles 18 to 23B, 57A and 58A ;

“ CRTS participant ” means a manufacturer which is a CRTS participant in accordance with article 11(1) or a group of manufacturers which is a pool CRTS participant in accordance with article 11(2);

“ eco-innovation ” means an innovative technology approved as an eco-innovation pursuant to Article 11 of Regulation (EU) 2019/631 ;

“ incomplete ”, in relation to a base vehicle, means a base vehicle which must undergo at least one further stage of completion in order for the base vehicle to satisfy the relevant technical requirements of Regulation (EU) 2018/858 ;

“ individual vehicle approval ” means the procedure whereby the approval authority certifies that a particular vehicle, whether unique or not, satisfies the relevant administrative provisions and technical requirements for individual vehicle approval in accordance with Regulation (EU) 2018/858 ;

“ individual vehicle approval certificate ”, in relation to a car, a van, an SPV or a base vehicle, means an EU individual vehicle approval certificate, as referred to in Article 44.4 of Regulation (EU) 2018/858 , or a national individual vehicle approval certificate, as referred to in Article 45.5 of that Regulation;

“ low-volume CRTS participant ” means a CRTS participant which is to be treated as a low-volume CRTS participant in accordance with Schedule 4;

“ low-volume VRTS participant ” means a VRTS participant which is to be treated as a low-volume VRTS participant in accordance with Schedule 4;

“ manufacturer ”, except in Part 8—

in relation to a car, a complete van or an SPV which has a certificate of conformity, means the person identified as the manufacturer on that certificate;

in relation to a car, a complete van or an SPV which has an individual vehicle approval certificate, means the person who obtained that approval;

in relation to a completed van which is not within paragraph (e), the base vehicle of which has a certificate of conformity, means the person identified as the manufacturer on that certificate of conformity;

in relation to a completed van, the base vehicle of which has an individual vehicle approval certificate, means the person who obtained the individual vehicle approval;

in relation to a completed van, where the completed vehicle was type-approved in accordance with Annex 21 to Regulation (EU) 2017/1151 or Regulation (EU) 595/2009 , means the person identified as the manufacturer on the certificate of conformity for the completed vehicle;

“ mass in running order ”, in relation to a car, a van, an SPV or a base vehicle, means the mass of the vehicle, with its fuel tank filled to at least 90% of its capacity, including the mass of the driver, the fuel and liquids, fitted with the standard equipment in accordance with the manufacturer’s specifications and, when they are fitted, the mass of the bodywork, the cabin, the coupling and the spare wheel as well as the tools;

“ member ”, in relation to a pool participant in the Trading Schemes, means a manufacturer which is a member of a group of manufacturers in relation to which the administrator has granted an application under Schedule 5 (application by two or more manufacturers to be a pool participant in the Trading Schemes);

“ multi-stage type-approval ” means the procedure whereby one or more approval authorities certifies that, depending on its state of completion, an incomplete or completed type of vehicle satisfies the relevant administrative provisions and technical requirements of Regulation (EU) 2018/858 ;

“ NZE car ” means a car in relation to which the zero-emission conditions are not met;

“ NZE van ” means a van in relation to which the zero-emission conditions are not met;

“ participant in the Trading Schemes ” means a manufacturer or group of manufacturers which is a participant in one or more of the Trading Schemes;

“ pool CCTS participant ” means a CCTS participant consisting of a group of two or more manufacturers which is a pool CCTS participant in accordance with article 32(2);

“ pool CRTS participant ” means a CRTS participant consisting of a group of two or more manufacturers which is a pool CRTS participant in accordance with article 11(2);

“ pool participant in the Trading Schemes ” means a pool CCTS participant, a pool CRTS participant, a pool VCTS participant or a pool VRTS participant;

“ pool VCTS participant ” means a VCTS participant consisting of a group of two or more manufacturers which is a pool VCTS participant in accordance with article 64(2);

“ pool VRTS participant ” means a VRTS participant consisting of a group of two or more manufacturers which is a pool VRTS participant in accordance with article 43(2);

“ registered ” and “registration” are to be construed in accordance with paragraphs (2) and (3);

“ registry ” has the meaning given in article 6(2);

“ Regulation (EC) No 595/2009 ” means Regulation (EC) No 595/2009 of the European Parliament and of the Council of 18 June 2009 on type-approval of motor vehicles and engines with respect to emissions from heavy duty vehicles (Euro VI) and amending Regulation (EC) No 715/2007 and Directive 2007/46/EC and repealing Directives 80/1269/EEC , 2005/55/EC and 2005/78/EC , as that Regulation has effect in domestic law , or, as the case may be, as it has effect in EU law from time to time and by virtue of the Windsor Framework ;

“ Regulation (EU) 2017/1151 ” means Commission Regulation (EU) 2017/1151 of 1 June 2017 supplementing Regulation (EC) No 715/2007 of the European Parliament and of the Council on type-approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information, amending Directive 2007/46/EC of the European Parliament and of the Council, Commission Regulation (EC) No 692/2008 and Commission Regulation (EU) No 1230/2012 and repealing Commission Regulation (EC) No 692/2008 , as that Regulation has effect in domestic law , or, as the case may be, as it has effect in EU law from time to time and by virtue of the Windsor Framework ;

“ Regulation (EU) 2018/858 ” means Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC , as that Regulation has effect in domestic law , or, as the case may be, as it has effect in EU law from time to time and by virtue of the Windsor Framework ;

“ Regulation (EU) 2019/631 ” means Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO 2 emission performance standards for new passenger cars and for new light commercial vehicles, and repealing Regulations (EC) No 443/2009 and (EU) No 510/2011 ;

“ Regulation (EU) 427/2014 ” means Commission Implementing Regulation (EU) No427/2014 of 25 April 2014 establishing a procedure for the approval and certification of innovative technologies for reducing CO 2 emissions from light commercial vehicles pursuant to Regulation (EU) No510/2011 of the European Parliament and of the Council ;

“ Regulation (EU) 725/2011 ” means Commission Implementing Regulation (EU) No725/2011 of 25 July 2011 establishing a procedure for the approval and certification of innovative technologies for reducing CO 2 emissions from passenger cars pursuant to Regulation (EC) No 443/2009 of the European Parliament and of the Council ;

“ scheme year ” means the period beginning with the date on which this Order comes into force and ending with 31st December 2024, or any of the six subsequent calendar years during the trading period, and—

a reference to the 2024 scheme year is a reference to the period beginning with the date on which this Order comes into force and ending with 31st December 2024; and

a reference to a later scheme year described by a calendar year (for example, the “2026 scheme year”) is a reference to the scheme year beginning with 1st January of that year;

“ specific emissions of CO 2 ”, in relation to a car, a van or an SPV, means the CO 2 emissions of the car, van or SPV, expressed in grams of CO 2 per kilometre and determined in accordance with paragraphs (4) to (6);

“ SPV ” means a vehicle which—

is of category M1 or N1, or is a vehicle of category N2 which falls within the description in paragraph (c) of the definition of “van”; and

has specific technical features that enable it to perform a function that requires special arrangements or equipment, as set out in point 5 of Part A of Annex 1 to Regulation (EU) 2018/858 ;

“ SPV car manufacturer ” means a person who—

is not a CRTS participant, nor a member of a group of manufacturers which is a pool CRTS participant, for a scheme year;

is the manufacturer of a ZE SPV of category M1 which is registered during the scheme year; and

notifies the administrator in accordance with article 74(2) (notification of SPV manufacturer’s contact details) for that scheme year;

“ SPV manufacturer ” means an SPV car manufacturer or an SPV van manufacturer;

“ SPV van manufacturer ” means a person who—

is not a VRTS participant, nor a member of a group of manufacturers which is a pool VRTS participant, for a scheme year;

is the manufacturer of a ZE SPV of the following kind which is registered during the scheme year—

a ZE SPV of category N1; or

a ZE SPV of category N2 which falls within the description in paragraph (c) of the definition of “van”; and

notifies the administrator in accordance with article 74(2) (notification of SPV manufacturer’s contact details) for that scheme year;

“ trading period ” means the period beginning with the date on which this Order comes into force and ending with 31st December 2030;

“ Trading Schemes ” has the meaning given in article 4(1);

“ trading window ” means the period beginning with 1st November and ending with 31st December of the year following a scheme year;

“ type-approval ” means the procedure whereby the approval authority certifies that a type of vehicle satisfies the relevant administrative provisions and technical requirements for type-approval in accordance with Regulation (EU) 2018/858 , and “ type-approved ” is to be construed accordingly;

“ UN Regulation No 154 ” means UN Regulation No 154 – Uniform provisions concerning the approval of light duty passenger and commercial vehicles with regards to criteria emissions, emissions of carbon dioxide and fuel consumption and/or the measurement of electric energy consumption and electric range (WLTP);

“ van ” means a vehicle, other than an SPV, which is—

a vehicle of category N1 which is type-approved in accordance with Annex 21 to Regulation (EU) 2017/1151 ;

a vehicle—

of category N1;

which is type-approved in accordance with Regulation (EC) 595/2009 ; and

in relation to which the zero-emission conditions are met; or

a vehicle—

of category N2;

which is type-approved in accordance with Annex 21 to Regulation (EU) 2017/1151 or Regulation (EC) 595/2009 ;

which has a maximum mass for the purposes of Article 4 of Regulation (EU) 2018/858 which exceeds 3,500 kilograms but which does not exceed 4,250 kilograms, and the proportion of that mass which exceeds 3,500 kilograms is attributable entirely to the mass of the vehicle’s energy storage system; and

in relation to which the zero-emission conditions are met;

“ VCTS ” means the Non-Zero-Emission Van CO 2 Trading Scheme, established by article 4(1)(d);

“ VCTS allowance ” has the meaning given in article 65;

“ VCTS participant ” means a manufacturer which is a participant in the VCTS in accordance with article 64(1) or a group of manufacturers which is a pool VCTS participant in accordance with article 64(2);

“ VRTS ” means the Non-Zero-Emission Van Registration Trading Scheme, established by article 4(1)(c);

“ VRTS allowance ” has the meaning given in article 44(1);

“ VRTS credit ” means a VRTS credit acquired in accordance with articles 25A, 26A and 50 to 55B ;

“ VRTS participant ” means a manufacturer which is a participant in the VRTS in accordance with article 43(1) or a group of manufacturers which is a pool participant in the VRTS in accordance with article 43(2);

“ Windsor Framework ” means the part of the EU withdrawal agreement known as the Windsor Framework by virtue of Joint Declaration No. 1/2023 of 24th March 2023 made between the EU and the United Kingdom in the Joint Committee established by the EU withdrawal agreement ;

“ ZE ”, in relation to a car, a van or an SPV, means a car, a van or an SPV, as the case may be, in relation to which the zero-emission conditions are met;

“ ZE wheelchair accessible SPV ” means a ZE SPV which—

is a vehicle of category M1; and

is constructed or converted specifically so that it accommodates one or more persons seated in their wheelchairs when travelling on the road;

“ the zero-emission conditions ” are—

in relation to a car, a van or an SPV in relation to which type-approval or individual vehicle approval was granted before the date on which this Order comes into force, conditions A and C in paragraphs (7) and (9); and

in relation to any other car, van or SPV, and subject to paragraph (8A), conditions A to C in paragraphs (7) to (9) .

(2) Subject to paragraph (3), a reference to registration, in relation to a car, a van or an SPV, is a reference to the first registration in the United Kingdom of that car, van or SPV under section 21 of the Vehicle Excise and Registration Act 1994 , and references to such a vehicle being “registered” are to be construed accordingly.

(3) A reference to registration, in relation to a car, a van or an SPV, does not include the registration of a car, van or SPV which—

(a) was registered (within the meaning of Article 3(53) of Regulation (EU) 2018/858 ) outside the United Kingdom more than three months before the date of its registration within the meaning of paragraph (2); or

(b) is permanently removed from the United Kingdom within the period of three months beginning with the date of its registration within the meaning of paragraph (2).

(4) The specific emissions of CO 2 of a car, a complete van or an SPV, other than a vehicle within paragraph (4A) or (5), are the CO 2 emissions of the vehicle which are specified as the “combined” CO 2 emissions in the certificate of conformity or individual vehicle approval certificate, as the case may be.

(4A) Where the administrator has granted an application under Schedule 3A (alternative specific emissions of CO 2 : OVC hybrid electric vehicles) in respect of a car or van, the specific emissions of CO 2 of the vehicle are to be determined in accordance with Part 6 of that Schedule.

(5) Where—

(a) a car, a complete van or an SPV is classed as an OVC hybrid electric vehicle in the certificate of conformity or individual approval certificate; and

(b) in the case of a car or complete van, paragraph (4A) does not apply in relation to the vehicle,

the specific emissions of CO 2 of the vehicle are those specified as the “weighted, combined” CO 2 emissions in that certificate.

(6) The specific emissions of CO 2 of a completed van , other than a van within paragraph (4A), are determined in accordance with Schedule 3.

(7) Condition A is that the car, the van or the SPV must have specific emissions of CO 2 of zero grams per kilometre.

(8) Condition B—

(a) in relation to a car, a complete van or an SPV, is that the minimum electric range, determined in accordance with Annex 21 to Regulation (EU) 2017/1151 , must be at least 100 miles; and

(b) in relation to a completed van, is that the minimum electric range of the base vehicle, determined in accordance with Annex 21 to Regulation (EU) 2017/1151 , must be at least 100 miles.

(8A) Condition B does not need to be met in the case of a vehicle which was type-approved in accordance with Annex 21 to Regulation (EU) 2017/1151 as a Fuel Cell Vehicle or a Fuel Cell Hybrid Vehicle where the fuel cell is powered by hydrogen.

(8B) For the purposes of paragraph (8A)—

“ Fuel Cell Vehicle ” has the same meaning as in—

point 3.3.19 of Annex XXI of Regulation (EU) 2017/1151 as that Regulation has effect in domestic law, or

where the Regulation (EU) 2017/1151 as that Regulation applies in EU law is relevant, paragraph 3.3.19 of UN Regulation No 154;

“ Fuel Cell Hybrid Vehicle ” has the same meaning as in—

point 3.3.20 of Annex XXI of Regulation (EU) 2017/1151 as that Regulation has effect in domestic law, or

where the Regulation (EU) 2017/1151 as that Regulation applies in EU law is relevant, paragraph 3.3.20 of UN Regulation No 154.

(9) Condition C—

(a) in relation to a car, or in relation to an SPV of category M1, is that the manufacturer must provide a warranty with the car or the SPV—

(i) in respect of any traction battery, hydrogen fuel cell stack or hydrogen tank, covering a warranty period of at least eight years, or a distance of least the first 100,000 miles, whichever is reached first;

(ii) in respect of any traction battery, providing for replacement of the battery if it falls below 70% capacity during the warranty period in paragraph (i); and

(iii) in respect of the remainder of the vehicle, covering a warranty period of at least three years, or a distance of at least the first 60,000 miles, whichever is reached first; and

(b) in relation to a van, an SPV of category N1 or an SPV of category N2 which is within the description in paragraph (c) of the definition of “van”, is that the manufacturer must provide a warranty with the van or the SPV—

(i) in respect of any traction battery, hydrogen fuel cell stack or hydrogen tank, covering a warranty period of at least eight years, or a distance of least the first 100,000 miles, whichever is reached first;

(ii) in respect of any traction battery, providing for replacement of the battery if it falls below 65% capacity during the warranty period in paragraph (i); and

(iii) in respect of the remainder of the vehicle, covering a warranty period of at least three years, or a distance of at least the first 60,000 miles, whichever is reached first.

(10) A reference in this Order to a vehicle being a vehicle of category M1, N1 or N2 is a reference to that vehicle category as defined in Article 4 of Regulation (EU) 2018/858 .

(11) Subject to paragraph (12), any reference in this Order to rounding a number to the nearest whole number, or to calculating a number to the nearest decimal place, is to be read as a reference to rounding down any fraction of less than one half and rounding up any other fraction.

(12) Paragraph (11) does not apply where a provision of this Order specifies that a number which is not a whole number is to be rounded up to the nearest whole number.

Section 4 Establishment of the Trading Schemes

(1) This Order establishes the following trading schemes, referred to in this Order as “ the Trading Schemes ”—

(a) the Non-Zero-Emission Car Registration Trading Scheme;

(b) the Non-Zero-Emission Car CO 2 Trading Scheme;

(c) the Non-Zero-Emission Van Registration Trading Scheme; and

(d) the Non-Zero-Emission Van CO 2 Trading Scheme.

(2) The purpose of the Trading Schemes is to limit, or encourage the limitation of, the emission of greenhouse gas resulting from the registration of NZE cars and NZE vans.

Section 5 Period by reference to which the Trading Schemes operate

The Trading Schemes operate by reference to the trading period.

Section 6 Administration of the Trading Schemes

(1) The Secretary of State is appointed as the administrator of the Trading Schemes.

(2) The administrator must establish an electronic system (“the registry”) for the purposes of the Trading Schemes, in particular to keep track of—

(a) participants in the schemes;

(b) the allocation of allowances to participants;

(c) the acquisition of credits by participants and SPV manufacturers;

(d) the trading of allowances and credits by participants and SPV manufacturers; and

(e) the surrender or expiry of allowances and credits.

(3) The administrator must create an account in the registry for—

(a) each manufacturer which is a participant in the Trading Schemes, or which is a member of a pool participant in the Trading Schemes; and

(b) each SPV manufacturer.

Section 7 Allowances and credits: general

Allowances allocated, and credits acquired, for the purposes of the Trading Schemes may not be used by participants in the Trading Schemes or SPV manufacturers for any other purpose.

Section 8 Pool participants in the Trading Schemes: general

(1) Each manufacturer which is a member of a pool participant in the Trading Schemes is jointly and severally liable—

(a) to comply with requirements placed on the pool participant in the Trading Schemes by or under this Order; and

(b) in respect of a financial civil penalty imposed on the pool participant in the Trading Schemes under Part 6 .

(2) Paragraph (3) applies to any reference in this Order to a participant in the Trading Schemes being the manufacturer of a car, a van, a base vehicle or an SPV, where that participant is a pool participant in the Trading Schemes.

(3) A reference to which this paragraph applies is to be read as a reference to the pool participant in the Trading Schemes being the manufacturer of a car, a van, a base vehicle or an SPV, as the case may be, of which a member of the group of manufacturers making up the pool participant in the Trading Schemes is the manufacturer.

(4) Any obligation on the administrator to give a notice to, or to notify, a pool participant in the Trading Schemes may be complied with by giving the notice to, or notifying, the manufacturer identified to the administrator in accordance with—

(a) paragraph 5 (c) (i) of Schedule 5 (application to be treated as a pool participant) in the application made under that Schedule; or

(b) article 83 (1) (updating information provided with application under Schedule 5 ).

Section 9 Interpretation of Chapter 1

In this Chapter—

(a) the retention by a CRTS participant of a CRTS allowance for use for a scheme year later than the scheme year of allocation in accordance with article 14(1) is referred to as “ banking ” the CRTS allowance;

(b) a CRTS allowance which is retained for use for a scheme year later than the scheme year of allocation is referred to as a “ banked ” CRTS allowance;

(c) the surrender by a CRTS participant, in accordance with article 15, of a CRTS allowance which is due to be allocated to the participant for a future scheme year is referred to as “ borrowing ” the CRTS allowance;

(d) a CRTS allowance which is surrendered as described in paragraph (c) is referred to as a “ borrowed ” CRTS allowance;

(e) “ scheme year of pooling ” means a scheme year for which a group of two or more manufacturers is a pool CRTS participant;

(f) “ banked pool allowances ” means CRTS allowances which were banked by a pool CRTS participant for a scheme year of pooling and which remain available for use in accordance with article 14(1) for one or more of the scheme years which follow a scheme year of pooling;

(g) “ borrowed pool allowances ” means CRTS allowances which were borrowed by a pool CRTS participant for a scheme year of pooling but which were not accounted for in accordance with article 15 for a scheme year of pooling;

(h) “ departing member ” means a manufacturer which ceases to a member of a pool CRTS participant part-way through the trading period;

(i) “ joining manufacturer ” means a manufacturer which becomes a member of a pool CRTS participant part-way through the trading period;

(j) “ in-year banked allowances ”, in relation to a scheme year of pooling, means CRTS allowances which were available to a pool CRTS participant to account for its activity in the CRTS in accordance with article 27 for that scheme year of pooling, but which were not required by it in order to do so;

(k) “ in-year borrowed allowances ”, in relation to a scheme year of pooling, means CRTS allowances which were borrowed by a pool CRTS participant in order to account for its activity in the CRTS for that scheme year of pooling.

Section 10 Activity to which the CRTS applies and unit of measurement of activity

(1) The activity to which the CRTS applies is the registration of an NZE car during the trading period.

(2) The unit of measurement of that activity is the registration of one NZE car.

Section 11 Participants in the CRTS

(1) The manufacturer of a car which is registered during a scheme year is a CRTS participant for that scheme year, subject to paragraph (2).

(2) Two or more manufacturers of a car which is registered during a scheme year are a pool CRTS participant for that scheme year, where the administrator has granted an application made by those manufacturers under Schedule 5 (application by two or more manufacturers to be a pool participant in the Trading Schemes) for that scheme year which relates to the CRTS.

(3) A CRTS participant is a low-volume CRTS participant for a scheme year where that participant meets the criteria to be treated as a low-volume CRTS participant in accordance with Schedule 4.

(4) Where there is any doubt as to the identification of the manufacturer of a car in accordance with paragraph (a) or (b) of the definition of “manufacturer” in article 3(1), the administrator may identify the CRTS participant in relation to the registration of that car.

Section 12 CRTS allowances and limits on CRTS allowances and CRTS activity

(1) A CRTS allowance is an allowance for the registration of one NZE car.

(2) The total amount of CRTS allowances which may be allocated for the trading period is limited in accordance with article 13.

(3) The total number of units of activity in the CRTS which may be accounted for by the surrender of a CRTS allowance or a CRTS credit in accordance with article 27 for the trading period is limited to the number which results from the following calculation.

Step 1

Calculate the “relevant percentage” for each scheme year which is—

for the 2024 scheme year, 100%

for the 2025 scheme year and the 2026 scheme year, the sum of—

the percentage shown in column 2 of the Table in Part 1 of Schedule 6 (percentage of car registrations for calculating CRTS allowances) for that scheme year;

the percentage shown in article 15(2) (limits on borrowed CRTS allowances) for that scheme year; and

the percentage shown in article 23(3) to (5) (limits on conversion of unused CCTS allowances into CRTS credits) for that scheme year; and

for the 2027 scheme year, the 2028 scheme year, the 2029 scheme year and the 2030 scheme year, the percentage shown in column 2 of the Table in Part 1 of Schedule 6 for that scheme year.

Step 2

Calculate the number of cars registered during the trading period by a low-volume CRTS participant or by a CRTS participant described in article 13(4) or (6).

Step 3

Calculate the total number of cars registered during the trading period, subtract from that number the number obtained at Step 2, and multiply the resulting number by the average of the relevant percentages obtained at Step 1.

Step 4

Calculate the number which is equal to 2.5% of all the cars, vans and SPVs which are registered during the trading period.

Step 5

Calculate the number of ZE SPVs of category M1 of which an SPV car manufacturer is the manufacturer, which were to be used exclusively by a car club for the provision of a car club service for a period of 18 months from the date the SPV was registered and which were registered during the trading period, and multiply that number by 0.5.

Step 6

Calculate the number of ZE SPVs of category M1 which are registered during the trading period.

Step 7

Calculate the number of ZE wheelchair accessible SPVs which are registered during the trading period and multiply that number by 0.5.

Step 8

Add together the numbers which result from Steps 2 to 7.

Section 13 Allocation of CRTS allowances

(1) The administrator must allocate CRTS allowances in accordance with paragraphs (2) to (7), and subject to paragraph (8).

(2) Except where a CRTS participant falls within paragraph (3), or where paragraph (5) or (7) applies, the administrator must allocate to a CRTS participant for each scheme year a number of CRTS allowances which is equal to P multiplied by T, where—

(a) P is the percentage shown in column 2 of the Table in Part 1 of Schedule 6 for that scheme year; and

(b) T is the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year.

(3) The administrator must allocate to a low-volume CRTS participant a number of CRTS allowances for a scheme year which is equal to the number of cars of which the low-volume CRTS participant is the manufacturer and which are registered during that scheme year, subject to a maximum of 2,499 CRTS allowances.

(4) Paragraph (5) applies for the purpose of calculating the number of CRTS allowances to be allocated to a CRTS participant where—

(a) the CRTS participant is not a low-volume CRTS participant for the scheme year for which the calculation is made (referred to in this paragraph and in paragraph (5) as “the transition year”);

(b) the CRTS participant was a low-volume CRTS participant for the scheme year immediately preceding the transition year; and

(c) the transition year is not the 2030 scheme year.

(5) Where this paragraph applies, the administrator must allocate to the CRTS participant a number of CRTS allowances for the transition year which is equal to the higher of—

(a) the number of cars of which the CRTS participant is the manufacturer and which were registered during the transition year, subject to a maximum of 2,499 CRTS allowances; or

(b) the number which results from the application of the formula in paragraph (2) for the transition year.

(6) Paragraph (7) applies for the purpose of calculating the number of CRTS allowances to be allocated to a CRTS participant which—

(a) was a low-volume CRTS participant by virtue of Part 2 of Schedule 4 for the 2029 scheme year; and

(b) is the manufacturer of fewer than 2,500 cars, but more than 999 cars, which were registered during the 2030 scheme year.

(7) Where this paragraph applies, the administrator must allocate to the CRTS participant a number of CRTS allowances for the 2030 scheme year which is equal to the higher of—

(a) the number of cars of which the CRTS participant is the manufacturer and which were registered during the 2030 scheme year, subject to a maximum of 2,499 CRTS allowances; or

(b) the number which results from the application of the formula in paragraph (2) for the 2030 scheme year.

(8) The allocation of allowances in accordance with this article may not result in the allocation of part of a CRTS allowance which is smaller than one tenth of a CRTS allowance, and a CRTS participant’s allocation of CRTS allowances must, where necessary, be rounded to the nearest decimal place accordingly.

Section 14 Banking CRTS allowances

(1) A CRTS allowance which is allocated to a CRTS participant in accordance with article 13 for a scheme year (referred to in this article as “ the scheme year of allocation ”) may be—

(a) surrendered in accordance with article 27 by that CRTS participant, or by a CRTS participant which acquires the CRTS allowance through trading in accordance with article 25, for the scheme year of allocation or for any of the three subsequent scheme years;

(b) traded in accordance with article 25 during the trading window following the scheme year of allocation, or the trading window following any of the three subsequent scheme years, by that CRTS participant or by a CRTS participant which acquires the CRTS allowance through trading in accordance with article 25;

(ba) traded in accordance with article 25A during the trading window following the scheme year of allocation, or the trading window following any of the three subsequent scheme years, by that CRTS participant or by a CRTS participant which acquires the CRTS allowance through trading in accordance with article 25;

(c) exchanged for CCTS allowances in accordance with article 35 during the trading window following the scheme year of allocation, or the trading window following any of the three subsequent scheme years, by that CRTS participant or by a CRTS participant which acquires the CRTS allowance through trading in accordance with article 25;

(d) exchanged for part of a VRTS credit in accordance with article 55A during the trading window following the scheme year of allocation, or the trading window following any of the three subsequent years, by that CRTS participant or by a CRTS participant which acquires the CRTS allowance through trading in accordance with article 25.

(2) A CRTS participant may bank parts of CRTS allowances, but may not bank a part smaller than one tenth of a CRTS allowance.

Section 15 Borrowing CRTS allowances

(1) Subject to the following provisions of this article, a CRTS participant may, for any scheme year other than the 2030 scheme year , surrender in accordance with article 27 a number of CRTS allowances which are due to be allocated to it for later scheme years.

(2) A CRTS participant may borrow CRTS allowances provided—

(a) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2024 scheme year does not exceed 16.5% of the total number of cars of which the participant is manufacturer and which are registered during the 2024 scheme year;

(b) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2025 scheme year does not exceed 19.6% of the total number of cars of which the participant is manufacturer and which are registered during the 2025 scheme year; ...

(c) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2026 scheme year does not exceed 8.25% of the total number of cars of which the participant is manufacturer and which are registered during the 2026 scheme year;

(d) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2027 scheme year does not exceed 7.6% of the total number of cars of which the participant is manufacturer and which are registered during the 2027 scheme year;

(e) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2028 scheme year does not exceed 7.8% of the total number of cars of which the participant is manufacturer and which are registered during the 2028 scheme year; and

(f) the number of CRTS allowances which the CRTS participant borrows to surrender for the 2029 scheme year does not exceed 6.6% of the total number of cars of which the participant is manufacturer and which are registered during the 2029 scheme year.

(3) The total number of cars of which a CRTS participant is the manufacturer and which are registered during a scheme year is the number notified to the participant by the administrator under article 79.

(4) A CRTS participant may borrow parts of CRTS allowances, but may not borrow a part smaller than one tenth of a CRTS allowance.

(5) Where a CRTS participant intends to borrow CRTS allowances in accordance with this article for use for a scheme year—

(a) the CRTS participant must notify the administrator of that intention, and of the intended number of borrowed CRTS allowances, before the end of the trading window which follows that scheme year; and

(b) the administrator must decide whether or not the intended number of borrowed CRTS allowances is appropriate and notify the CRTS participant in writing of that decision.

(6) A CRTS participant may borrow CRTS allowances which are due to be allocated to it for the 2025 scheme year or for any subsequent scheme year and must account for any borrowed allowances in accordance with the following paragraphs of this article.

(7) Where a CRTS participant borrows a number of CRTS allowances to surrender for a scheme year, the participant must account for the borrowed allowances by surrendering an equivalent number of CRTS allowances or CRTS credits for the following scheme year or a subsequent scheme year, together with an additional number of CRTS allowances or CRTS credits, calculated in accordance with paragraphs (8) to (11).

(8) If the CRTS participant accounts for the borrowed allowances for the scheme year which follows immediately after the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 3.5% of the number of borrowed allowances.

(9) If the CRTS participant accounts for the borrowed allowances for a scheme year which begins one year after the end of the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 7.12% of the number of borrowed allowances.

(10) If the CRTS participant accounts for the borrowed allowances for a scheme year which begins two years after the end of the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 10.87% of the number of borrowed allowances.

(10A) If the CRTS participant accounts for the borrowed allowances for a scheme year which begins three years after the end of the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 14.75% of the number of borrowed allowances.

(10B) If the CRTS participant accounts for the borrowed allowances for a scheme year which begins four years after the end of the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 18.77% of the number of borrowed allowances.

(10C) If the CRTS participant accounts for the borrowed allowances for a scheme year which begins five years after the end of the scheme year for which the borrowed allowances were surrendered, the CRTS participant must surrender—

(a) a number of CRTS allowances or CRTS credits which is equal to the number of borrowed allowances; and

(b) an additional number of CRTS allowances or CRTS credits which amounts to 22.93% of the number of borrowed allowances.

(11) Where the number of additional CRTS allowances or CRTS credits which is to be surrendered in accordance with sub-paragraph (b) of any of paragraphs (8) to (10C) is not a whole number, the number is to be rounded up to the nearest whole number of allowances or credits.

(12) A CRTS participant must account for a borrowed CRTS allowance for a scheme year no later than the 2030 scheme year .

(13) Where a CRTS participant decides to account for borrowed CRTS allowances for a scheme year earlier than the 2030 scheme year , that participant must notify the administrator of its decision, before the end of the trading window which follows the scheme year for which the participant intends to account for the allowances.

(14) Where a decision by a CRTS participant not to account for borrowed CRTS allowances for a scheme year would result in the participant having banked CRTS allowances standing in its name in the registry for the following scheme year, the CRTS participant must give a notification under paragraph (13) which relates to the number of borrowed CRTS allowances which would prevent that outcome.

(15) A borrowed CRTS allowance may not be traded under article 25 or 25A or exchanged under article 35 or 55A .

Section 16 Banked allowances: pool CRTS participants

(1) The administrator must transfer to a departing member its share of any banked pool allowances, calculated in accordance with paragraphs (2) and (3).

(2) The departing member’s share of banked pool allowances is the number which results from adding together the departing member’s share of the in-year banked allowances for each of the scheme years of pooling during which it was a member of the pool CRTS participant, calculated in accordance with paragraph (3).

(3) The departing member’s share of the in-year banked allowances for a scheme year of pooling is calculated as follows.

Step 1

Calculate “PZE”, which is the number of ZE cars of which the pool CRTS participant is treated as being the manufacturer in accordance with article 8(3) and which were registered during the scheme year of pooling.

Step 2

Calculate “MZE”, which is the number of ZE cars of which the departing member is the manufacturer and which were registered during the scheme year of pooling.

Step 3

Divide MZE by PZE.

Step 4

The departing member’s share of the in-year banked allowances for a scheme year of pooling is the number of those allowances multiplied by the number obtained at step 3.

(4) A departing member may use its share of the banked pool allowances in accordance with article 14, as if those allowances had been allocated to it for the scheme year of pooling for which they were allocated to the pool CRTS participant.

(5) Any banked CRTS allowances which remain available for use in accordance with article 14 by a joining manufacturer may be used by the pool CRTS participant in accordance with article 14 during the scheme years of pooling, as if those allowances had been allocated to the pool CRTS participant for the scheme year for which they were allocated to the joining manufacturer.

(6) The administrator must update the registry to reflect the apportionment of banked pool allowances in accordance with this article.

Section 17 Borrowed allowances: pool CRTS participants

(1) A departing member’s share of the borrowed pool allowances is the number of CRTS allowances which results from adding together the departing member’s share of the in-year borrowed allowances for each of the scheme years of pooling during which it was a member of the pool CRTS participant, calculated in accordance with paragraph (2).

(2) The departing member’s share of the in-year borrowed allowances for a scheme year of pooling is calculated as follows.

Step 1

Calculate “PNZE”, which is the number of NZE cars of which the pool CRTS participant is treated as being the manufacturer in accordance with article 8(3) and which were registered during the scheme year of pooling.

Step 2

Calculate “MNZE”, which is the number of NZE cars of which the departing member is the manufacturer and which were registered during the scheme year of pooling.

Step 3

Divide MNZE by PNZE.

Step 4

The departing member’s share of the in-year borrowed allowances for a scheme year of pooling is the number of those allowances multiplied by the number obtained at step 3.

(3) A departing member must account for its share of the borrowed pool allowances in accordance with article 15(7), as if those allowances had been borrowed by the departing member for the scheme year of pooling for which they were borrowed by the pool CRTS participant.

(4) Any borrowed CRTS allowances which have not been accounted for by a joining manufacturer in accordance with article 15(7) must be so accounted for by the pool CRTS participant for the scheme years of pooling, as if those allowances had been borrowed by the pool CRTS participant for the scheme year for which they were borrowed by the joining manufacturer.

(5) The administrator must update the registry to reflect the apportionment of borrowed CRTS allowances in accordance with this article.

Section 18 CRTS credits: general

(1) A CRTS participant may acquire a CRTS credit in accordance with articles 19, 20 , 23 to 23B, 57A and 58A .

(2) Where it acquires a CRTS credit for a scheme year, a CRTS participant may—

(a) surrender that CRTS credit for that scheme year in accordance with article 27; or

(b) trade the credit in accordance with article 25 during the trading window following that scheme year , unless the credit was acquired by the CRTS participant in accordance with article 23, 23A, 23B, 57A or 58A .

(3) An SPV car manufacturer may acquire a CRTS credit in accordance with article 21 or 22.

(4) An SPV car manufacturer may trade a credit acquired for a scheme year in accordance with article 26 or 26A during the trading window following that scheme year.

(5) Where a CRTS participant or an SPV car manufacturer acquires a CRTS credit in accordance with articles 19 to 23B , the administrator must update the registry accordingly (see also the requirement for the administrator to update the registry in articles 57A(7) and 58A(8)) .

Section 19 CRTS credits: registration of ZE SPVs (CRTS participants)

(1) A CRTS participant acquires a CRTS credit for a scheme year for each ZE SPV of which it is the manufacturer and which—

(a) is registered during the scheme year;

(b) is a vehicle of category M1; and

(c) is not a ZE wheelchair accessible SPV.

(2) A CRTS participant acquires one and a half CRTS credits for a scheme year for each ZE wheelchair accessible SPV of which it is the manufacturer and which is registered during the scheme year.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 20 CRTS credits: car clubs (CRTS participants)

(1) Subject to paragraph (6), a CRTS participant acquires half a CRTS credit for a scheme year (in addition to any CRTS credit acquired under article 19 where applicable) for each ZE car or ZE SPV of category M1—

(a) of which it is the manufacturer and which is registered during the scheme year; and

(b) which is to be used exclusively by a car club for the provision of a car club service for a period of 18 months from the date it is registered.

(2) The administrator must record in the registry the expiry of a half CRTS credit acquired by a CRTS participant under paragraph (1) if—

(a) the administrator gives written notice to the CRTS participant that it is satisfied that a ZE car or ZE SPV of category M1 mentioned in paragraph (1)(a) is not being, or has not been, used in accordance with paragraph (1)(b); and

(b) the CRTS participant has not traded that half CRTS credit in accordance with article 25 nor surrendered it in accordance with article 27.

(3) Where a CRTS participant receives, before 1st November 2031, a notice from the administrator in accordance with paragraph (2)(a) and it has traded in accordance with article 25, or surrendered in accordance with article 27, a half CRTS credit acquired under paragraph (1) to which that notice applies, that participant must account for each such half CRTS credit in accordance with article 27(1)(b).

(4) A CRTS participant must comply with the obligation in paragraph (3)—

(a) for the scheme year for which the administrator is satisfied that a ZE car or ZE SPV of category M1 is not being, or has not been, used in accordance with paragraph (1)(b); or

(b) for the 2030 scheme year, where the administrator is so satisfied after the end of 2030 scheme year but before 1st November 2031.

(5) The administrator may not give a notice in accordance with paragraph (2)(a) where—

(a) a car club has ceased to use a ZE car or ZE SPV for the purposes of offering a car club service because the vehicle has sustained damage; and

(b) the Secretary of State has been notified of that in accordance with paragraph 1 or 2 of Schedule 3A to the Road Vehicles (Registration and Licensing) Regulations 2002 .

(6) A CRTS participant may not acquire a number of CRTS credits for a scheme year in accordance with this article which exceeds 2.5% of the number of cars, vans and SPVs of which that participant is the manufacturer and which were registered during the scheme year.

Section 21 CRTS credits: registration of ZE SPVs (SPV car manufacturers)

(1) An SPV car manufacturer acquires a CRTS credit for a scheme year for each ZE SPV of which it is the manufacturer and which—

(a) is registered during the scheme year;

(b) is a vehicle of category M1; and

(c) is not a ZE wheelchair accessible SPV.

(2) An SPV car manufacturer acquires one and a half CRTS credits for a scheme year for each ZE wheelchair accessible SPV of which it is the manufacturer and which is registered during a scheme year.

Section 22 CRTS credits: car clubs (SPV car manufacturers)

(1) Subject to paragraph (3), an SPV car manufacturer acquires half a CRTS credit for a scheme year (in addition to any CRTS credit acquired under article 21 where applicable) for each ZE SPV of category M1—

(a) of which it is the manufacturer and which is registered during the scheme year; and

(b) which is to be used exclusively by a car club for the provision of a car club service for a period of 18 months from the date it is registered.

(2) The administrator must record in the registry the expiry of a half CRTS credit acquired by an SPV car manufacturer under paragraph (1) if—

(a) the administrator gives written notice to the SPV car manufacturer that it is satisfied that a ZE SPV mentioned in paragraph (1)(a) is not being, or has not been, used in accordance with paragraph (1)(b); and

(b) the SPV car manufacturer has not traded that half CRTS credit in accordance with article 26 or 26A .

(3) Where an SPV car manufacturer receives, before 1st November 2031, a notice from the administrator in accordance with paragraph (2)(a) and it has traded in accordance with article 26 or 26A a half CRTS credit acquired under paragraph (1) to which that notice applies, the SPV car manufacturer must forfeit a half CRTS credit to which it becomes entitled under paragraph (1) for each half CRTS credit to which the notice relates.

(4) The administrator may not give a notice in accordance with paragraph (2)(a) where—

(a) a car club has ceased to use a ZE SPV for the purposes of offering a car club service because the vehicle has sustained damage; and

(b) the Secretary of State has been notified of that in accordance with paragraph 1 or 2 of Schedule 3A to the Road Vehicles (Registration and Licensing) Regulations 2002.

Section 23 CRTS credits: conversion of unused CCTS allowances

(1) A CRTS participant may acquire one CRTS credit in exchange for 167 unused CCTS allowances by making a request to the administrator if—

(a) the CRTS participant’s number of units of activity in the CCTS in a scheme year does not exceed the number of CCTS allowances which were allocated to it in accordance with article 34 for that year;

(b) the CRTS participant has more CCTS allowances than it requires in order to comply with article 38(1) (accounting for activity in the CCTS) for that scheme year (referred to in this article as “ unused CCTS allowances ”); and

(c) the unused CCTS allowances were allocated by the administrator for any scheme year other than the 2030 scheme year .

(2) A request under paragraph (1)—

(a) must be made during the trading window following the scheme year for which the unused CCTS allowances were allocated; and

(b) must be for a whole number of CRTS credits.

(3) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2024 scheme year is limited to a number of CRTS credits which does not exceed 14.3% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year .

(4) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2025 scheme year is limited to a number of CRTS credits which does not exceed 25.2% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year .

(5) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2026 scheme year is limited to a number of CRTS credits which does not exceed 26.4% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year .

(5A) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2027 scheme year is limited to a number of CRTS credits which does not exceed 26.6% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year.

(5B) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2028 scheme year is limited to a number of CRTS credits which does not exceed 31.2% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year.

(5C) A request under paragraph (1) to exchange unused CCTS allowances allocated for the 2029 scheme year is limited to a number of CRTS credits which does not exceed 33% of the total number of cars of which the CRTS participant is the manufacturer and which were registered during that scheme year.

(6) A CRTS credit acquired in accordance with this article may not be traded under article 25.

Section 23A CRTS credits: conversion of unused VRTS allowances by a CRTS participant which is also a VRTS participant

(1) During a trading window, a CRTS participant which is also a VRTS participant may acquire two CRTS credits in exchange for one unused VRTS allowance by making a request to the administrator if—

(a) the participant’s number of units of activity in the VRTS in a scheme year does not exceed the sum of—

(i) the number of VRTS allowances which were allocated to the participant in accordance with article 45 for that year;

(ii) the number of any VRTS allowances which were banked by the participant in accordance with article 46 and were available for it to use at the beginning of the trading window; and

(iii) the number of any VRTS credits which were acquired by the participant in accordance with article 55 (conversion of unused VCTS allowances);

(b) the participant has more VRTS allowances than it requires in order to comply with article 59 (accounting for activity in the VRTS) for that scheme year (referred to in this article as “ unused VRTS allowances ”); and

(c) the participant did not acquire the unused VRTS allowances in accordance with article 47 (borrowing VRTS allowances).

(2) A request under paragraph (1)—

(a) must be made during the trading window following the scheme year for which the participant intends to surrender the CRTS credits to which the request relates; and

(b) may be for the exchange of a part of a VRTS allowance but may not be for the exchange of a part which is smaller than one tenth of a VRTS allowance.

(3) A CRTS credit acquired in accordance with this article may not be traded under article 25.

Section 23B CRTS credits: conversion of VRTS credits by a CRTS participant which is also an SPV van manufacturer

(1) During a trading window, a CRTS participant which is also an SPV van manufacturer may acquire two CRTS credits in exchange for one VRTS credit by making a request to the administrator.

(2) A request under paragraph (1)—

(a) must be made during the trading window following the scheme year for which the participant intends to surrender the CRTS credits to which the request relates; and

(b) may be for the exchange of a part of a VRTS credit but may not be for the exchange of a part which is smaller than one tenth of a VRTS credit.

(3) A CRTS credit acquired in accordance with this article may not be traded under article 25.

Section 24 Measuring activity in the CRTS

A CRTS participant’s number of units of activity in the CRTS during a scheme year is the number of NZE cars of which the participant is the manufacturer and which are registered during that scheme year, as notified to the participant by the administrator in accordance with article 79.

Section 25 Trading CRTS allowances and credits: CRTS participants

(1) During a trading window, a CRTS participant may trade any CRTS allowances or CRTS credits with another CRTS participant, but may not trade—

(a) a CRTS allowance which was borrowed in accordance with article 15; or

(b) a CRTS credit which was acquired in accordance with article 23 (conversion of unused CCTS allowances) , article 23A (conversion of unused VRTS allowances), article 23B (conversion of VRTS credits by a SPV van manufacturer), article 57A (trading VRTS allowances with CRTS participants) or article 58A (trading VRTS credits with CRTS participants: SPV van manufacturers) .

(2) A CRTS participant may trade parts of CRTS allowances or CRTS credits, but may not trade a part smaller than one tenth of a CRTS allowance or CRTS credit.

(3) Each CRTS participant which is party to a trade under this article must, before the end of the trading window, notify the administrator of the trade and each notification must include—

(a) the name and account number in the registry of the CRTS participant which is the transferor;

(b) the name and account number in the registry of the CRTS participant which is the transferee;

(ba) a statement of the fact that the trade was carried out under this article;

(c) the number of CRTS allowances or CRTS credits traded; and

(d) the price paid for those CRTS allowances or CRTS credits.

(4) A CRTS participant which trades a CRTS allowance or a CRTS credit in accordance with this article must inform the other party to the trade of their account number in the registry.

(5) Where a CRTS participant is a pool CRTS participant, a reference in this article to a CRTS participant’s account number is a reference to the account number of the manufacturer identified to the administrator in accordance with—

(a) paragraph 5(c)(i) of Schedule 5 (application to be treated as a pool participant) in the application made under that Schedule; or

(b) article 83(1) (updating information provided with application under Schedule 5).

(6) Where a trade is notified in accordance with paragraph (3), the administrator must update the registry and notify the parties to the trade accordingly.

(7) Unless the administrator is satisfied that notification of a trade has been given in accordance with this article, the trade is treated as not having taken place.

Section 25A Trading CRTS allowances with VRTS participants

(1) During a trading window, a CRTS participant may trade any unused CRTS allowances with a VRTS participant if—

(a) the CRTS participant’s number of units of activity in the CRTS in a scheme year does not exceed the sum of—

(i) the number of CRTS allowances which were allocated to the CRTS participant in accordance with article 13 for that year;

(ii) the number of any CRTS allowances which were banked by the CRTS participant in accordance with article 14 and were available for it to use at the beginning of the trading window; and

(iii) the number of any CRTS credits which were acquired by the CRTS participant in accordance with article 23 (conversion of unused CCTS allowances) and are available for it to use;

(b) the CRTS participant has more CRTS allowances than it requires in order to comply with article 27 (accounting for activity in the CRTS) for that scheme year (referred to in this article as “ unused CRTS allowances ”); and

(c) the CRTS participant did not acquire the unused CRTS allowances in accordance with article 15 (borrowing CRTS allowances).

(2) Where a CRTS participant trades a CRTS allowance under this article, the CRTS allowance is automatically converted to four tenths of a VRTS credit on disposal.

(3) The CRTS participant may trade parts of CRTS allowances (in which case the conversion rate in paragraph (2) applies on a proportional basis) but may not trade a part smaller than one tenth of a CRTS allowance.

(4) Each party to a trade under this article must, before the end of the trading window, notify the administrator of the trade, and each notification must include—

(a) the name and account number in the registry of the transferor;

(b) the name and account number in the registry of the transferee;

(c) a statement of the fact that the trade was carried out under this article;

(d) the number of CRTS allowances traded; and

(e) the price paid for those CRTS allowances.

(5) Each party to a trade under this article must inform the other party to the trade of their account number in the registry.

(6) Where—

(a) the transferor is a pool CRTS participant, article 25(5) applies to a trade under this article as it applies to a trade under that article;

(b) the transferee is a pool VRTS participant, article 57(5) applies to a trade under this article as it applies to a trade under that article.

(7) Where a trade is notified in accordance with paragraph (4), the administrator must update the registry and notify the parties to the trade accordingly.

(8) Unless the administrator is satisfied that notification of a trade has been given in accordance with paragraph (4), the trade is treated as not having taken place.

Section 26 Trading CRTS credits with CRTS participants : SPV car manufacturers

(1) An SPV car manufacturer may trade CRTS credits acquired by it under article 21 or 22 with a CRTS participant in accordance with paragraphs (2) and (3).

(2) An SPV car manufacturer may only trade a CRTS credit under this article during the trading window following the scheme year for which the CRTS credit was acquired by the SPV car manufacturer.

(3) A trade under this article must comply with paragraphs (2) to (5) of article 25, as if references to a CRTS participant in those paragraphs (except for the reference in paragraph (3)(b)) include an SPV car manufacturer.

(4) Where a trade is notified in accordance with article 25(3), the administrator must update the registry and notify the parties to the trade accordingly.

(5) Unless the administrator is satisfied that notification of a trade has been given in accordance with this article, the trade is treated as not having taken place.

Section 26A Trading CRTS credits with VRTS participants: SPV car manufacturers

(1) An SPV car manufacturer may trade any CRTS credits acquired by it under article 21 or 22 with a VRTS participant in accordance with paragraphs (2) to (7).

(2) An SPV car manufacturer may only trade a CRTS credit under this article during the trading window following the scheme year for which the CRTS credit was acquired by the SPV car manufacturer.

(3) Where an SPV car manufacturer trades a CRTS credit with a VRTS participant under this article, the CRTS credit is automatically converted to four tenths of a VRTS credit on disposal.

(4) An SPV car manufacturer may trade parts of CRTS credits (in which case the conversion rate in paragraph (3) applies on a proportional basis) but may not trade a part smaller than one tenth of a CRTS credit.

(5) Each party to a trade under this article must, before the end of the trading window, notify the administrator of the trade, and each notification must include—

(a) the name and account number in the registry of the transferor;

(b) the name and account number in the registry of the transferee;

(c) a statement of the fact that the trade was carried out under this article;

(d) the number of CRTS credits traded; and

(e) the price paid for those CRTS credits.

(6) Each party to a trade under this article must inform the other party to the trade of their account number in the registry.

(7) Where the transferee is a pool VRTS participant, article 57(5) applies to a trade under this article as it applies to a trade under that article.

(8) Where a trade is notified in accordance with paragraph (5), the administrator must update the registry and notify the parties to the trade accordingly.

(9) Unless the administrator is satisfied that notification of a trade has been given in accordance with paragraph (5), the trade is treated as not having taken place.

Section 27 Accounting for activity in the CRTS

(1) For each scheme year, and no later than 31st December of the year following a scheme year, a CRTS participant must account for—

(a) each unit of its activity in the CRTS, measured in accordance with article 24, by surrendering a CRTS allowance or a CRTS credit;

(b) each half CRTS credit which the participant must account for in accordance with article 20(3) (car clubs), by surrendering a half CRTS allowance or a half CRTS credit; and

(c) any additional CRTS allowances or CRTS credits which the participant must surrender, or which it chooses to surrender, for that scheme year in accordance with article 15(7) (accounting for borrowed CRTS allowances).

(2) A CRTS participant must surrender in accordance with paragraph (1) CRTS allowances and CRTS credits which are recorded in its name in the registry, including any CRTS allowances or CRTS credits acquired through trading in accordance with article 25 or 26, in the following order of priority—

(a) CRTS credits;

(b) CRTS allowances which were allocated by the administrator for the scheme year for which the surrender is made;

(c) borrowed CRTS allowances;

(d) banked CRTS allowances.

(3) The administrator must update the registry to record the surrender of CRTS allowances and CRTS credits.

Section 28 Payments: CRTS

(1) Where a CRTS participant has insufficient CRTS allowances or CRTS credits to account for the matters in article 27(1) for a scheme year, it must make a payment to the administrator.

(2) Subject to paragraph (2A), the payment amount is £12,000 for—

(a) each unit of the CRTS participant’s activity in the CRTS during the scheme year, measured in accordance with article 24, which the participant does not account for by surrendering a CRTS allowance or a CRTS credit to the administrator on or before the 31st December of the year following that scheme year;

(b) each CRTS credit which the CRTS participant must account for in accordance with article 20(3) (car clubs) for the scheme year, and which the participant does not account for by surrendering a CRTS allowance or a CRTS credit to the administrator on or before the 31st December of the year following that scheme year; and

(c) each additional CRTS allowance which the CRTS participant must account for in accordance with article 15(7) (borrowed CRTS allowances) for the scheme year and which the participant does not account for by surrendering a CRTS allowance or CRTS credit to the administrator on or before the 31st December of the year following that scheme year.

(2A) For the 2024 scheme year, the payment amount in respect of each of the matters mentioned in paragraph (2)(a), (b) or (c) is £15,000.

(3) The administrator must give a CRTS participant notice of a requirement to make a payment in accordance with this article (referred to in this article as a “ payment notice ”).

(4) A payment notice must be in writing and must set out—

(a) the amount of the payment and how the amount is calculated;

(b) the date by which payment must be made, which must not be less than 30 days after the date on which the notice is given;

(c) that payment must be made to the administrator;

(d) how payment must be made; and

(e) information about rights of appeal.

(5) A CRTS participant which receives a payment notice under this article must make the payment in accordance with the notice.

(6) The administrator must pay any payment received under this article into the consolidated fund.

Section 29 Banked or borrowed CRTS allowances of former CRTS participants

(1) This article applies to a person who—

(a) was a CRTS participant, or a member of a pool CRTS participant, for a scheme year;

(b) is no longer a CRTS participant or a member of a pool CRTS participant for the subsequent scheme year; and

(c) has banked CRTS allowances standing in their name in the registry or has not yet accounted for borrowed CRTS allowances in accordance with article 15.

(2) In this article, a person described in paragraph (1) is referred to as a “ former CRTS participant ”, and the first scheme year for which the person no longer participates in the CRTS, as described in paragraph (1)(b), is referred to as the “ first non-participation scheme year ”.

(3) A former CRTS participant may dispose of a banked CRTS allowance referred to in paragraph (1)(c) through trading in accordance with article 25 or 25A, or exchanging in accordance with article 35 or 55A, during the trading window which follows the first non-participation scheme year, as if references in those articles to a CRTS participant (except for the reference in article 25(3)(b) ) include the former CRTS participant.

(4) A former CRTS participant must account for a borrowed CRTS allowance referred to in paragraph (1)(c) in accordance with article 15 before the end of the trading window which follows the first non-participation scheme year.

(5) A former CRTS participant may comply with the obligation in paragraph (4) by—

(a) surrendering a banked CRTS allowance;

(b) acquiring a CRTS allowance or CRTS credit during the trading window which follows the first non-participation scheme year through exchanging in accordance with article 23, 23A or 23B, or trading in accordance with article 25, 26, 57A or 58A , as if references in those articles to a CRTS participant include the former CRTS participant, and surrendering that allowance or credit; or

(c) making a payment in accordance with article 28.

Section 30 Expiry of CRTS allowances and CRTS credits

(1) The administrator must record in the registry the expiry of a CRTS allowance, including a CRTS allowance which has been traded in accordance with article 25, which is—

(a) surrendered by a CRTS participant in accordance with article 27;

(b) not surrendered by a CRTS participant for—

(i) the scheme year for which it was allocated;

(ii) any of the three subsequent scheme years; or

(iii) a scheme year earlier than the scheme year for which it was due to be allocated, in accordance with article 15 (borrowing CRTS allowances);

(c) not surrendered by a former CRTS participant in accordance with article 29(5)(a); ...

(ca) converted into part of a VRTS credit pursuant to a trade under article 25A;

(cb) converted into part of a VRTS credit in accordance with article 55A; or

(d) converted into CCTS allowances in accordance with article 35.

(2) The administrator must record in the registry the expiry of a CRTS credit, including a CRTS credit which has been traded in accordance with article 25 or 26, which is—

(a) surrendered by a CRTS participant in accordance with article 27; ...

(b) not surrendered by a CRTS participant for the scheme year for which the credit was acquired;

(c) converted into part of a VRTS credit pursuant to a trade under article 26A; or

(d) converted into part of a VRTS credit in accordance with article 55B.

Section 31 Activity to which the CCTS applies and unit of measurement of activity

(1) The activity to which the CCTS applies is the registration of an NZE car during the trading period.

(2) The unit of measurement of that activity is each gram of CO 2 per kilometre emitted by such a car.

Section 32 Participants in the CCTS

(1) Subject to paragraph (2) , the manufacturer of more than 999 NZE cars which are registered during a scheme year is a CCTS participant for that year.

(2) Where two or more manufacturers are collectively the manufacturers of more than 999 NZE cars which are registered during a scheme year, those manufacturers are a pool CCTS participant for that scheme year if the administrator has granted an application made by those manufacturers under Schedule 5 (application by two or more manufacturers to be a pool participant in the Trading Schemes) for that scheme year which relates to the CCTS.

(3) Where there is any doubt as to the identification of the manufacturer of a car in accordance with paragraph (a) or (b) of the definition of “manufacturer” in article 3 (1) , the administrator may identify the CCTS participant in relation to the registration of that car.

Section 33 CCTS allowances

A CCTS allowance is an allowance for an NZE car which is registered during a scheme year to emit one gram of CO 2 per kilometre.

Section 34 Allocation of CCTS allowances

(1) Subject to paragraph (2), the administrator must allocate to each CCTS participant for each scheme year a number of CCTS allowances which is equal to N multiplied by B, where—

(a) N is the number of NZE cars of which the participant is the manufacturer and which are registered during that scheme year; and

(b) B is that participant’s baseline.

(2) Where the number of CCTS allowances which results from the application of the formula in paragraph (1) is not a whole number, the number is to be rounded to the nearest whole number.

Section 35 Conversion of unused CRTS allowances into CCTS allowances

(1) During a trading window, a CCTS participant may acquire 135 CCTS allowances in exchange for one unused CRTS allowance by making a request to the administrator if—

(a) the participant's number of units of activity in the CRTS in a scheme year, measured in accordance with article 24, does not exceed the sum of—

(i) the number of CRTS allowances which were allocated to the participant in accordance with article 13 for that year; and

(ii) the number of any CRTS allowances which were banked by the participant in accordance with article 14 and were available for it to use at the beginning of the trading window;

(b) the participant has more CRTS allowances than it requires (referred to in this article as “ unused CRTS allowances ”) in order to comply with article 27(1) (accounting for activity in the CRTS) for that scheme year; and

(c) the participant did not acquire the unused CRTS allowances by means of borrowing under article 15.

(2) A request under paragraph (1)—

(a) must be made during the trading window following the scheme year for which the CCTS participant intends to surrender the CCTS allowances to which the request relates; and

(b) must relate to a whole number of CRTS allowances.

(3) If a CCTS participant makes a request in accordance with paragraph (1), the administrator must update the registry accordingly.

Section 36 Measuring activity in the CCTS

(1) The number of units of activity that must be accounted for by a CCTS participant for a scheme year is the sum of the number of grams of CO 2 per kilometre emitted by each NZE car of which the participant is the manufacturer and which is registered during the scheme year.

(2) For the purposes of this article, the number of grams of CO 2 per kilometre emitted by an NZE car is the specific emissions of CO 2 of the car, with that number having been—

(a) if applicable, reduced in accordance with paragraph (3); and

(b) if applicable, corrected in accordance with Article 13(3) of Regulation (EU) 2019/631 (lack of correspondence of CO 2 emission and fuel consumption values).

(3) An NZE car’s specific emissions of CO 2 are reduced by the number of grams of CO 2 per kilometre specified in the car’s certificate of conformity as CO 2 savings achieved by any eco-innovation, unless—

(a) the Secretary of State has given a notice to the administrator in accordance with Article 12(2)(b) of Regulation (EU)725/2011 which relates to that eco-innovation; and

(b) the notice was given during the scheme year which immediately preceded the scheme year for which a CCTS participant’s number of units of activity in the CCTS is measured.

(4) A CCTS participant’s number of units of activity during a scheme year, if not a whole number, is calculated to three decimal places only.

Section 37 Trading CCTS allowances

(1) During a trading window, a CCTS participant may trade any CCTS allowances with another CCTS participant.

(2) A CCTS participant must trade whole numbers of CCTS allowances.

(3) Each CCTS participant which is a party to a trade must, before the end of the trading window, notify the administrator and each notification must include—

(a) the name and account number in the registry of the CCTS participant which is the transferor;

(b) the name and account number in the registry of the CCTS participant which is the transferee;

(c) the number of CCTS allowances traded; and

(d) the price paid for those CCTS allowances.

(4) A CCTS participant which trades a CCTS allowance in accordance with this article must inform the other party to the trade of their account number in the registry.

(5) Where a CCTS participant is a pool CCTS participant, a reference in this article to a CCTS participant’s account number is a reference to the account number of the manufacturer identified to the administrator in accordance with—

(a) paragraph 5 (c) (i) of Schedule 5 (application to be treated as a pool participant) in the application made under that Schedule; or

(b) article 83 (1) (updating information provided with application under Schedule 5 ).

(6) Where a trade is notified in accordance with paragraph (3), the administrator must update the registry and notify the parties to the trade accordingly.

(7) Unless the administrator is satisfied that notification of a trade has been given in accordance with this article, the trade is treated as not having taken place.

Section 38 Accounting for activity in the CCTS

(1) For each scheme year, and no later than 31st December of the year following a scheme year, a CCTS participant must account for each unit of its activity during the scheme year, measured in accordance with article 36 , by surrendering a CCTS allowance.

(2) The administrator must update the registry to record the surrender of CCTS allowances.

Section 39 Payments: CCTS

(1) Where a CCTS participant has insufficient CCTS allowances to account for its activity during a scheme year in accordance with article 38 , it must make a payment to the administrator.

(2) The payment amount is £86 for each unit of a CCTS participant’s activity during a scheme year, measured in accordance with article 36 , which the participant does not account for by surrendering a CCTS allowance to the administrator on or before 31st December of the year following that scheme year.

(3) Where the payment amount referred to in paragraph (2) is not a whole number of pence, the amount is to be rounded to the nearest whole number of pence.

(4) The administrator must give a CCTS participant notice of a requirement to make a payment in accordance with this article (referred to in this article as a “ payment notice ”).

(5) A payment notice must be in writing and must set out—

(a) the amount of the payment and how the amount is calculated;

(b) the date by which payment must be made, which must not be less than 30 days after the date on which the notice is given;

(c) that payment must be made to the administrator;

(d) how payment must be made; and

(e) information about rights of appeal.

(6) A CCTS participant which receives a payment notice under this article must make the payment in accordance with the notice.

(7) The administrator must pay any payment received under this article into the consolidated fund.

Section 40 Expiry of CCTS allowances

The administrator must record in the registry the expiry of a CCTS allowance, including a CCTS allowance which has been traded in accordance with article 37 , which is—

(a) surrendered by a CCTS participant;

(b) not surrendered in accordance with article 38 for the scheme year for which it was allocated under article 34 or for which it was acquired under article 35 (conversion of unused CRTS allowances into CCTS allowances); or

(c) converted into CRTS credits in accordance with article 23 .

Section 41 Interpretation of Chapter 3

In this Chapter—

(a) the retention by a VRTS participant of a VRTS allowance for use for a scheme year later than the scheme year of allocation in accordance with article 46(1) is referred to as “ banking ” the VRTS allowance;

(b) a VRTS allowance which is retained for use for a scheme year later than the scheme year of allocation is referred to as a “ banked ” VRTS allowance;

(c) the surrender by a VRTS participant, in accordance with article 47, of a VRTS allowance which is due to be allocated to the participant for a future scheme year is referred to as “ borrowing ” the VRTS allowance;

(d) a VRTS allowance which is surrendered as described in paragraph (c) is referred to as a “ borrowed ” VRTS allowance;

(e) “ scheme year of pooling ” means a scheme year for which a group of two or more manufacturers is a pool VRTS participant;

(f) “ banked pool allowances ” means VRTS allowances which were banked by a pool VRTS participant for a scheme year of pooling and which remain available for use in accordance with article 46(1) for one or more of the scheme years which follow a scheme year of pooling;

(g) “ borrowed pool allowances ” means VRTS allowances which were borrowed by a pool VRTS participant for a scheme year of pooling but which were not accounted for in accordance with article 47 for a scheme year of pooling;

(h) “ departing member ” means a manufacturer which ceases to a member of a pool VRTS participant part-way through the trading period;

(i) “ joining manufacturer ” means a manufacturer which becomes a member of a pool VRTS participant part-way through the trading period;

(j) “ in-year banked allowances ”, in relation to a scheme year of pooling, means VRTS allowances which were available to a pool VRTS participant to account for its activity in the VRTS in accordance with article 59 for that scheme year of pooling, but which were not required by it in order to do so;

(k) “ in-year borrowed allowances ” means VRTS allowances which were borrowed by a pool VRTS participant in order to account for its activity in the VRTS for a particular scheme year of pooling.

Section 42 Activity to which the VRTS applies and unit of measurement of activity

(1) The activity to which the VRTS applies is the registration of an NZE van during the trading period.

(2) The unit of measurement of that activity is the registration of one NZE van.

Section 43 Participants in the VRTS

(1) The manufacturer of a van which is registered during a scheme year is a VRTS participant for that year, subject to paragraph (2).

(2) Two or more manufacturers of a van which is registered during a scheme year are a pool VRTS participant for that scheme year, where the administrator has granted an application made by those manufacturers under Schedule 5 (application by two or more manufacturers to be a pool participant in the Trading Schemes) for that scheme year which relates to the VRTS.

(3) A VRTS participant is a low-volume VRTS participant for a scheme year where that participant meets the criteria to be treated as a low-volume VRTS participant in accordance with Schedule 4.

(4) Where there is any doubt as to the identification of the manufacturer of a van in accordance with paragraphs (a) to (e) of the definition of “manufacturer” in article 3(1), the administrator may identify the VRTS participant in relation to the registration of that van.

Section 44 VRTS allowances and limits on VRTS allowances and VRTS activity

(1) A VRTS allowance is an allowance for the registration of one NZE van.

(2) The total amount of VRTS allowances which may be allocated for the trading period is limited in accordance with article 45.

(3) The total number of units of activity in the VRTS which may be accounted for by the surrender of a VRTS allowance or a VRTS credit in accordance with article 59 for the trading period is limited to the number which results from the following calculation.

Step 1

Calculate the “relevant percentage” for each scheme year which is—

for the 2024 scheme year and the 2025 scheme year, 100%;

for the 2026 scheme year, the sum of—

the percentage shown in column 2 of the Table in Part 2 of Schedule 6 (percentage of van registrations for calculating VRTS allowances) for that scheme year;

the percentage shown in article 47(2) (limits on borrowed VRTS allowances) for that scheme year; and

the percentage shown in article 55(3) to (5) (limits on conversion of unused VCTS allowances into VRTS credits) for that scheme year; and

for the 2027 scheme year, the 2028 scheme year, the 2029 scheme year and the 2030 scheme year, the percentage shown in column 2 of the Table in Part 2 of Schedule 6 for that scheme year.

Step 2

Calculate the number of vans registered during the trading period by a low-volume VRTS participant or by a VRTS participant described in article 45(4) or (6).

Step 3

Calculate the total number of vans registered during the trading period, subtract from that number the number obtained at Step 2, and multiply the resulting number by the average of the relevant percentages obtained at Step 1.

Step 4

Calculate the number which is equal to 2.5% of all the cars, vans and SPVs which are registered during the trading period.

Step 5

Calculate the number of ZE SPVs of category N1, and ZE SPVs of category N2 which are within the description in paragraph (c) of the definition of “van” in article 3(1), of which an SPV van manufacturer is the manufacturer, which were to be used exclusively by a car club for the provision of a car club service for a period of 18 months from the date the SPV was registered and which were registered during the trading period, and multiply that number by 0.5.

Step 6

Calculate the number of ZE SPVs of category N1, or of category N2 which fall within the description in paragraph (c) of the definition of “van” in article 3(1), which are registered during the trading period.

Step 7

Add together the numbers which result from Steps 2 to 6.

Section 45 Allocation of VRTS allowances

(1) The administrator must allocate VRTS allowances in accordance with paragraphs (2) to (7) and subject to paragraph (8).

(2) Except where a VRTS participant falls within paragraph (3), or where paragraph (5) or (7) applies, the administrator must allocate to a VRTS participant for each scheme year a number of VRTS allowances which is equal to P multiplied by T, where—

(a) P is the percentage shown in column 2 of the Table in Part 2 of Schedule 6 for that scheme year; and

(b) T is the total number of vans of which the VRTS participant is the manufacturer and which were registered during that scheme year.

(3) The administrator must allocate to a low-volume VRTS participant a number of VRTS allowances for a scheme year which is equal to the number of vans of which the low-volume VRTS participant is the manufacturer and which were registered during that scheme year, subject to a maximum of 2,499 VRTS allowances.

(4) Paragraph (5) applies for the purpose of calculating the number of VRTS allowances to be allocated to a VRTS participant where—

(a) the VRTS participant is not a low-volume VRTS participant for the scheme year for which the calculation is made (referred to in this paragraph and in paragraph (5) as “the transition year”);

(b) the VRTS participant was a low-volume VRTS participant for the scheme year immediately preceding the transition year; and

(c) the transition year is not the 2030 scheme year.

(5) Where this paragraph applies, the administrator must allocate to the VRTS participant a number of VRTS allowances for the transition year which is equal to the higher of—

(a) the number of vans of which the low-volume VRTS participant is the manufacturer and which were registered during the transition year, subject to a maximum of 2,499 VRTS allowances; or

(b) the number which results from the application of the formula in paragraph (2) for the transition year.

(6) Paragraph (7) applies for the purpose of calculating the number of VRTS allowances to be allocated to a VRTS participant which—

(a) was a low-volume VRTS participant by virtue of Part 2 of Schedule 4 for the 2029 scheme year; and

(b) is the manufacturer of fewer than 2,500 vans, but more than 999 vans, which were registered during the 2030 scheme year.

(7) Where this paragraph applies, the administrator must allocate to the VRTS participant a number of VRTS allowances for the 2030 scheme year which is equal to the higher of—

(a) the number of vans of which the low-volume VRTS participant is the manufacturer and which were registered during the 2030 scheme year, subject to a maximum of 2,499 VRTS allowances; or

(b) the number which results from the application of the formula in paragraph (2) for the 2030 scheme year.

(8) The allocation of allowances in accordance with this article may not result in the allocation of part of a VRTS allowance which is smaller than one tenth of a VRTS allowance, and a VRTS participant’s allocation of VRTS allowances must, where necessary, be rounded to the nearest decimal place accordingly.

Section 46 Banking VRTS allowances

(1) A VRTS allowance which is allocated to a VRTS participant in accordance with article 45 for a scheme year (referred to in this article as “ the scheme year of allocation ”) may be—

(a) surrendered in accordance with article 59 by that VRTS participant, or by a VRTS participant which acquires the VRTS allowance through trading in accordance with article 57, for the scheme year of allocation, or for any of the three subsequent scheme years;

(b) traded in accordance with article 57 during the trading window following the scheme year of allocation or the trading window following any of the three subsequent scheme years, by that participant or by a VRTS participant which acquires the VRTS allowance through trading in accordance with article 57;

(ba) traded in accordance with article 57A during the trading window following the scheme year of allocation or the trading window following any of the three subsequent scheme years, by that VRTS participant or by a VRTS participant which acquires the VRTS allowance through trading in accordance with article 57;

(bb) exchanged for CRTS credits in accordance with article 23A during the trading window following the scheme year of allocation or the trading window following any of three subsequent years, by that participant or by a VRTS participant which acquires the VRTS allowance through trading in accordance with article 57;

(c) exchanged for VCTS allowances in accordance with article 67 during the trading window following the scheme year of allocation, or the trading window following any of the three subsequent years, by that participant or by a VRTS participant which acquires the VRTS allowance through trading in accordance with article 57.

(2) A VRTS participant may bank parts of VRTS allowances, but may not bank a part smaller than one tenth of a VRTS allowance.