Increased emphasis on climate change and carbon emissions reduction, as part of a business’ environmental, social and governance (ESG) approach, is affecting corporate transactions. In addition to schemes such as the EU Emissions Trading Scheme (EU ETS) and the UK Emissions Trading Scheme (UK ETS), additional legislation means that an organisation may be required to participate in a number of carbon reduction and/or energy efficiency schemes, as well as have reporting obligations connected with energy and carbon usage, eg: • the Climate Change Act 2008 (CCA 2008) requires annual emissions reports—see Practice Note: Mandatory greenhouse gas reporting • the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, SI 2018/1155 on Streamlined Energy and Carbon Reporting (SECR) bring in additional disclosure requirements for quoted companies and also introduce requirements for large unquoted companies and limited liability partnerships to disclose their annual energy use and greenhouse gas emissions, and related information—see Practice Note: Streamlined Energy and Carbon Reporting (SECR)—quoted companies, large unquoted companies and large limited liability partnerships • Task Force on Climate-related

What is ‘carbon management’ and why is it necessary? Regulation (EU) 2021/1119 of 30 June 2021 (the EU Climate Regulation) places a legally binding obligation on the EU to achieve a 55% reduction in carbon emissions compared to 1990 levels by 2030, a 90% reduction by 2040, and full carbon neutrality by 2050. Achieving these targets will require a major reduction in greenhouse gas emissions. At EU level, these reductions are primarily being driven by the Fit for 55 climate package of legislation, introduced pursuant to the 2019 European Green Deal. To complement EU- and Member State-level actions and measures to reduce emissions, the EU also recognises that carbon management has a role to play in achieving its climate goals. This Practice Note outlines the EU initiatives linked to carbon management, with a focus on the key legislative incentives and enabling frameworks designed to drive deployment of industrial carbon capture for use and storage and industrial carbon removals. Carbon management covers a family of interlinked technologies, as outlined

What is ‘carbon management’ and why is it necessary? Regulation (EU) 2021/1119 of 30 June 2021 (the EU Climate Regulation) places a legally binding obligation on the EU to achieve a 55% reduction in carbon emissions compared to 1990 levels by 2030, a 90% reduction by 2040, and full carbon neutrality by 2050. Achieving these targets will require a major reduction in greenhouse gas emissions. At EU level, these reductions are primarily being driven by the Fit for 55 climate package of legislation, introduced pursuant to the 2019 European Green Deal. To complement EU- and Member State-level actions and measures to reduce emissions, the EU also recognises that carbon management has a role to play in achieving its climate goals. This Practice Note outlines the EU initiatives linked to carbon management, with a focus on the key legislative incentives and enabling frameworks designed to scale up nature-based carbon removals and carbon farming. Carbon management covers a family of interlinked technologies, as outlined in the table below. Technology family Aims Carbon

Basic principles Carbon markets operate within the ‘science’ of economics, the study of the allocation of scarce resources between competing ends (Lionel Robbins, An Essay on the Nature & Significance of Economic Science (2nd ed, revised and extended, 1949), Ch 1.3). Within this framework, a decent environment is just such a scarce resource. The core claim of carbon markets is that by assigning property rights to greenhouse gas (GHG) emissions (‘putting a price on carbon’), market actors can allocate the use of this property in a cost-effective way. Accordingly, a given emissions objective (say, reducing emissions by 100% by 2050) is achieved at the lowest cost. By putting a price on carbon, markets generate climate-friendly incentives such as discouraging the use of carbon-intensive activities, and encouraging investment in the low-carbon economy such that when actors are faced with the social cost of their high-carbon goods and services, they will switch to low-carbon alternatives. Emissions trading schemes (ETS) are a specific, if increasingly common, form of carbon markets. They

Carbon trading agreements 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 System (EU ETS). Following Brexit, the UK has established its own standalone UK Emissions Trading Scheme (UK ETS). For more information, see Brexit, the EU ETS, and UK ETS section below. 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 Carbon trading—who and how? 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 Emissions Trading Scheme (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

Background The pricing of carbon internationally, especially by emissions trading schemes (ETS), has become significantly more widespread. Previously concentrated in the EU, the number of carbon pricing instruments has increased globally. Experiments with emissions trading started in the US in the 1970s and 1980s in the context of action against ‘acid rain’ and sulphur dioxide (SOx) rather than climate change. The resultant Clean Air Act Amendments of 1990 (104 Stat. 2468, P.L. 101-549) (the Act) created the Acid Rain Program under Title IV of the Act, authorising emissions trading. The perceived success of SOx trading moved emissions trading into the political mainstream in the US. This in turn gave the Clinton Administration experience and detailed economic modelling which it used at the Kyoto Conference of the Parties (COP) in 1997 to persuade other parties that emissions trading at the international level could significantly reduce the costs of emissions reduction. International emissions trading in the form of Joint Implementation, Clean Development Mechanism, and International Emissions Trading

Carbon pricing: background Carbon pricing has been the most prominent instrument in efforts to address climate change. At the international level the Kyoto Protocol and its flexibility mechanisms (the Clean Development Mechanisms (CDM), Joint Implementation (JI), and International Emissions Trading: arts 12, 6, 17 respectively) provided countries with commitments under the Kyoto Protocol with market-based means to limit or reduce greenhouse gas (GHG) emissions, in addition to national measures. In turn the Kyoto Protocol inspired the EU’s Emission Trading System (ETS) established by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for GHG emission allowance trading within the Community and amending Council Directive 96/61/EC (EU ETS Directive), which has since been followed by a wide variety of carbon pricing schemes, whether established, in pilot form, or prospective, see Practice Note: Carbon markets—international emissions trading schemes. Each does much the same thing—create a market for carbon permits or allowances, and above all signalling the real costs associated with carbon

Originally produced in partnership with Dr Justin Macinante of Edinburgh School of Law, The University of Edinburgh. Updated by Dalia Majumder-Russell, Alex Ibrahim and Shinae Lee of CMS Cameron McKenna Nabarro Olswang LLP. Conceptual context Emissions trading is a way of pricing the impacts of an activity that would not otherwise be factored into the cost of that activity, such as the emission of greenhouse gases (GHGs). Emission trading can be set up as: • cap and trade—entities will have a cap imposed on their level of emissions and are either allocated or buy allowances in respect of those emissions. If their emissions exceed their cap, they need to purchase allowances from other entities that have allowances to spare, or otherwise pay a penalty at the end of the relevant compliance period. Thus, cap and trade schemes are compliance schemes • baseline and credit—entities undertake projects by which emissions are reduced below a baseline, either through emission avoidance, emission reduction or removal (that is, sequestering the pollutants from the atmosphere), thereby generating a credit. Credits can be sold to other entities

Sabz Ali Khan and Sabrina Khan, were found guilty of 18 health and safety offences at Lilo Grill restaurant on 21 February 2023 following a trial at Newport Crown Court and sentenced on 23 March 2023. Cabinet Member for Shared Regulatory Services at Cardiff Council, Councillor Dan De’Ath, describes this as ‘the worst case of neglect at a restaurant that we have come across in the past 15 years’.

CASE HUB ARCHIVED–this archived case hub reflects the position at the date of the decision of 22 September 2017; it is no longer maintained. See further, timeline and commentary. Case facts Outline UK merger investigation into the completed acquisition by Cardtronics Holdings Limited of DirectCash Payments Inc, a transaction with horizontal overlaps in local markets for the deployment of automatic teller machines (ATMs). Latest developments On 22 September 2017, the CMA unconditionally cleared the transaction, confirming its provisional findings. Parties Cardtronics Holdings Limited (Cardtronics) is a subsidiary of Cardtronics plc, a US-based company. Cardtronics plc is the world’s largest ATM owner and operator, providing services to approximately 225,000 ATMs with operations in Australia, Canada, Germany, Ireland, Mexico, New Zealand, Poland, Puerto Rico, Spain, the UK and the USA.. DirectCash Payments Inc (DCP) is a Canadian-based company. DCP operates approximately 25,000 ATMs across Australia, Canada, the UK, New Zealand and Mexico. Market(s) Deployment of ATMs to site owners, such as convenience stores and pubs, supplying both free-to-use and pay-to-use ATMs and the supply of ATM services to ATM users.

Local Government analysis: The defendant local authority unlawfully terminated the provision of accommodation and support under section 19 of the Care Act 2014 (CA 2014), to an asylum seeker with care and support needs and his mother, who was his carer, on the basis of purported entitlement to accommodation and support provided by the Home Secretary in section 95 of the Immigration and Asylum Act 1999 (IAA 1999). The court discussed the interplay between the defendant's obligations under the CA 2014 and the Home Secretary's obligations under IAA 1999, in relation to the provision of accommodation to asylum seekers with eligible care needs The court held the defendant’s decision to terminate the accommodation and support under CA 2014 unlawful. Written by Tim Baldwin, barrister at Garden Court Chambers, London.

Local Government analysis: The Court of Appeal dismissed a challenge to Devon County Council’s decision to close a non-statutory mental health support service, holding that the general duties in Part 1 of the Care Act 2014 (CA 2014) were neither mandatory relevant considerations nor matters whose omission rendered the decision irrational. The court emphasised that statutory duties arising under separate legislative schemes will generally only require consideration where expressly or necessarily engaged by the decision in question. It also reaffirmed the deference owed to informed professional assessments by public authorities when determining the purpose and value of services. The decision provides important guidance on relevant considerations in judicial review and the limited circumstances in which unengaged statutory duties may influence public law decision-making. Produced in partnership with Paul Ridout of HCR Legal LLP. We are very sorry to hear of Paul’s recent death.