EU ETS Compliance Year 2018

Bringing forward EU Emissions trading system 2018 compliance deadlines in the UK.

The department for Business, Energy & Industrial Strategy (BEIS) held a consultation which ran from the 6th November 2017 until the 24th November 2017 on alterations to 2018 compliance deadlines for UK installations covered by the European Emissions Trading Scheme (EUETS), to ensure that the integrity of the scheme was not in any compromised by the UK leaving Europe. Following a review of the responses to the consultation, the intention is lay legislation before Parliament in December 2017, with the intention that the changes to the regulations will take effect from the 1st January 2018. The legislation will be known as ‘The Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2017, coming into force on the 27th December 2017.

Large industrial and commercial installations which are required to report their carbon emissions under the European Emissions Trading Scheme, have operated under a compliance cycle which has seen them submit their verified annual report for the monitoring period which end on the 31st December to the regulator by the 31st March, there is then the requirement to surrender the number of allowances identified in the verification report by the 30th April.

For the compliance cycle ending the 31st December 2018, ordinarily this would mean verification by the 31st March 2019 and surrender by the 30th April 2019, both of these dates are after UK EU Exit date of the 29th March 2019. Therefore in order to provide clarity for participants in the scheme and to maintain the integrity of the scheme in general the UK is looking at legislation to bring the verification and surrender dates inboard of the exit date, after which the UK’s obligations under the scheme lapse.

The proposed revised dates for the 2018 compliance period are to have the deadline for verified moved to 11th March 2019 and the deadline for surrender of allowances moved to 15th March 2019.

For the 2019, the picture is less clear and will depend on the arrangements which are in place after the date at which the UK leaves the EU, in the event that the arrangements are not sufficiently clear by the start of 2019, the UK Government is proposing the suspension of the issuing of UK allowances for a period January 2019 until March 2019.