The following Environment guidance note Produced in partnership with Navraj Singh Ghaleigh of Senior Lecturer in Climate Law, University of Edinburgh provides comprehensive and up to date legal information covering:
As of exit day (31 January 2020), the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this content.
For further guidance, see Practice Note: Brexit—impact on environmental law and News Analysis: Brexit Bulletin—key updates, research tips and resources.
Although the contractual context for carbon trading shares similarities with other products, there are a number of features particular to it. This note gives an overview of these features, focusing on those raised in mandatory schemes, principally the European Union’s Emissions Trading Scheme (EU ETS).
For background on the operation and rationale of cap and trade schemes, see Practice Notes: Carbon markets—international emissions trading schemes and Carbon markets—price of Carbon
The scope of those entitled to participate in an emissions trading scheme, market participants, is a key determinant of market liquidity.
Some schemes such as the South Korean ETS restrict trading to regulated entities/installations.
Other schemes, such as the EU ETS, takes the broadest possible approach stating that 'any person may hold allowances' providing they hold an account with a national registry, as a consequence of which, financial institutions are among the biggest participants
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