The following Environment guidance note provides comprehensive and up to date legal information covering:
Originally produced in partnership with Navraj Singh Ghaleigh, Senior Lecturer in Climate Law, University of Edinburgh
The EU Emissions Trading System (EU ETS) is the largest ETS in the world by volume. It works on a cap-and-trade basis, where a limit is set on the total greenhouse gas emissions allowed by all participant sectors covered by the scheme and this limit is converted into tradable allowances.
For more information, see Practice Notes:
EU ETS Directive 2003/87/EC—snapshot
EU Emissions trading system—outline
EU ETS Phase III UK implementation—legal framework, key obligations and administration
EU ETS Phase III UK implementation—regulated activities, operators, and installations
EU ETS Phase III UK implementation—compliance, enforcement and appeals
When is a greenhouse gas permit required?
This note focuses on the allocation of allowance as implemented at the UK. Although specified in broad terms by the revised EU ETS Directive, the details of allocation are contained in the UK’s National Implementation Measures (NIMs) and encompass auctioning, free allocation, and leakage.
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
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