UK ETS—regulated activities, operators, installations and exemptions — 2022
Produced in partnership with Steven Gray of DLA Piper UK LLP
Last updated on 11/08/2022

The following Environment practice note produced in partnership with Steven Gray of DLA Piper UK LLP provides comprehensive and up to date legal information covering:

  • UK ETS—regulated activities, operators, installations and exemptions
  • The functioning of the UK ETS
  • Installation operators under the UK ETS
  • Excluded installations
  • Aviation in the UK ETS
  • Scope
  • Free allowances and purchasing allowances
  • Exemptions
  • Consultation on developing the UK ETS
  • Energy Intensive Industries
  • More...

UK ETS—regulated activities, operators, installations and exemptions

Since the end of the Brexit transition period (completion-day'>IP completion day) on 31 December 2020, the UK no longer participates in the Emissions Trading System (ETS) of the EU. The EU ETS seeks to limit the total amount of certain greenhouse gases (GHG) emitted by factories, power plants and other installations in the system through a scheme of allowance trading on the cap and trade principle. It commenced with Phase I in 2005 and is based on Directive 2003/87/EC (later amended by Directive 2009/29/EC). Phase III of EU ETS commenced in January 2013 and ended in 2020. Phase IV runs from 2021–30.

For more details on the EU ETS and carbon trading, see Practice Notes:

  1. EU ETS Directive 2003/87/EC—snapshot

  2. EU Emissions trading system—outline

  3. Carbon markets—basic principles and future developments

  4. Carbon markets—carbon trading agreements

  5. Carbon markets—price of Carbon

  6. Carbon markets—international emissions trading schemes

  7. When is a greenhouse gas permit required under Phase III EU ETS? [Archived]

Prior to Brexit, the EU ETS was implemented in the UK by the Greenhouse Gas Emissions Trading Scheme Regulations 2012, SI 2012/3038 which extend to the whole of the UK. For more information of the UK’s participation in the EU ETS before the end of IP completion day, see Practice Notes:

  1. EU ETS Phase III UK implementation—legal framework, key obligations and administration [Archived]

  2. EU ETS Phase

Related documents:
Key definition:
Brexit definition
What does Brexit mean?

means: (a) the United Kingdom (UK) ceasing to be a member state of the European Union (EU) and/or the European Economic Area (EEA) on Exit Day; and/or (b) the commencement, end of[ or variation in] any transitional, trading or other arrangements from time to time between: (i) the UK and the EU and/or EEA (including during any implementation period and IP Completion Day); and/or (ii) the UK and any other country, group of countries, international organisation, bloc or body (including the World Trade Organization) in contemplation of or (directly or indirectly) in connection with the UK’s said cessation of membership;

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