EU ETS Phase III UK implementation—legal framework, key obligations and administration
EU ETS Phase III UK implementation—legal framework, key obligations and administration

The following Environment guidance note provides comprehensive and up to date legal information covering:

  • EU ETS Phase III UK implementation—legal framework, key obligations and administration
  • Brexit impact
  • EU ETS—basics
  • Legal framework
  • Key obligations
  • Administration, including regulators and registries

Originally produced in partnership with Navraj Singh Ghaleigh, Senior Lecturer in Climate Law, University of Edinburgh

Brexit impact

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.

EU ETS—basics

The EU Emissions Trading System (EU ETS) is the largest ETS in the world by volume, covering 2GtCO2e and serving as the keystone of the EU’s climate and energy policy.

The EU ETS is based on Directive 2003/87 EC (later amended by Directive 2009/29/EC) establishing a scheme for greenhouse gas emission allowance trading within the Community and works on a cap and trade basis. There is a limit set on the total greenhouse gas emissions allowed by all participant sectors covered by the scheme and this limit is converted and allocated to participants as tradable allowances—one allowance (European Union Allowance-EUA) equals one tonne of carbon dioxide equivalent.

The EU ETS was initially a response to the Kyoto Protocol 1997, first mooted in 2000 by the European Commission.

The green paper articulated the basic design of