The Greenhouse Gas Emissions Trading Scheme Regulations 2003

Allocation and issue of allowances

19.—(1) For each phase referred to in regulation 18(2), the Secretary of State shall decide upon—

(a) the total quantity of allowances to be allocated for that phase;

(b) the allocation of allowances to each installation including the number of those allowances to be issued in each scheme year in that phase; and

(c) where there is more than one greenhouse gas emissions permit relating to an installation, the division of the allowances allocated to that installation under sub-paragraph (b) between each part of the installation to which a separate greenhouse gas emissions permit relates.

(2) Decisions under paragraph (1) shall—

(a) be based upon the national allocation plan for the relevant phase as accepted by the European Commission under Article 9 of the Directive; and

(b) take due account of comments from the public in accordance with the provisions of the national allocation plan.

(3) The Secretary of State shall publish in England her decision under paragraph (1)—

(a) in respect of the first phase, by 1st October 2004; and

(b) in respect of the second and subsequent phases, at least twelve months before the beginning of the relevant phase.

(4) The Secretary of State shall notify the Scottish Ministers, the National Assembly for Wales and the Department of the Environment of her decision under paragraph (1).

(5) Subject to paragraphs (6), (8) and (9), the number of allowances issued each scheme year under regulation 20(3)(b) in respect of each permitted installation shall be the amount allocated in the decision under paragraph (1)(b), and if applicable, (1)(c) to that installation and, subject to paragraph (7), shall be issued by 28th February in each scheme year of each phase referred to in regulation 18(2) to the holder of the greenhouse gas emissions permit in respect of that installation.

(6) Where allowances allocated in respect of an installation in any phase referred to in regulation 18(2)(b) are cancelled in accordance with Article 13(3) of the Directive, allowances equal to the number of allowances cancelled shall be issued to the holder of the greenhouse gas emissions permit in respect of that installation for the following phase.

(7) Where, after the decision in paragraph (1) has been made, a partial transfer under regulation 14(5) is effected in relation to an installation, the allowances allocated to that installation under paragraph (1)(b), and if applicable, (1)(c), or issued in respect of that installation under paragraph (6) shall be issued for each scheme year remaining in the phase during which the transfer occurred to the holder of the original greenhouse gas emissions permit.

(8) Where the European Commission has provided for additional allowances to be allocated in respect of an installation, or installations of any description, under Article 29(1) of the Directive, the Secretary of State may issue such additional allowances as have been authorised by the European Commission to the holder of the greenhouse gas emissions permit in respect of that installation or of each installation falling within that description.

(9) Where—

(a) a person has made a statement which is false or misleading in a material particular in response to a request for information from the Secretary of State for the purposes of developing a national allocation plan under regulation 18(1) or failed to correct any such statement made for that purpose before the entry into force of these Regulations; and

(b) as a result of that statement the number allocated in respect of an installation to which the statement relates in a decision under paragraph (1)(b) or, if applicable, (1)(c) is greater than it would otherwise have been,

the number of allowances to be issued under regulation 20(3)(b) in respect of that installation in each scheme year in the recovery phase shall be the amount provided for in a supplementary decision by the Secretary of State.

(10) A supplementary decision under paragraph (9) shall ensure that the total number of allowances issued in respect of an installation in the phase to which the supplementary decision applies shall be reduced by the amount by which the numbers provided for in the decision under paragraph (1)(b) or, if applicable, (1)(c) in respect of the preceding phase exceeded the number that the decision under paragraph (1)(b) or, if applicable, (1)(c) would have provided for that installation if the statement referred to in paragraph (9)(a) had not been false or misleading.

(11) The Secretary of State shall as soon as practicable publish her supplementary decision under paragraph (9) in England and shall notify the Scottish Ministers, the National Assembly for Wales and the Department of the Environment of her decision.

(12) The Scottish Ministers shall publish in Scotland any decision notified to them under paragraph (4) or (11) as soon as practicable on notification.

(13) The National Assembly for Wales shall publish in Wales any decision notified to them under paragraph (4) or (11) as soon as practicable on notification.

(14) The Department of the Environment shall publish in Northern Ireland any decision notified to them under paragraph (4) or (11) as soon as practicable on notification.

(15) Subject to paragraphs (16), (17) and (18), the power under paragraphs (1) and (9) is exercisable—

(a) in so far as it relates to installations situated in Scotland (other than offshore installations), only with the agreement of the Scottish Ministers;

(b) in so far as it relates to installations situated in Wales (other than offshore installations), only with the agreement of the National Assembly for Wales; and

(c) in so far as it relates to installations situated in Northern Ireland (other than offshore installations), only with the agreement of the Department of the Environment.

(16) The Secretary of State may exercise the power under paragraph (1) or (9) in relation to installations situated in Scotland where—

(a) no agreement has been reached with the Scottish Ministers;

(b) she considers that it is necessary to do so to ensure that the United Kingdom complies with its obligations under the Directive; and

(c) she serves a notice on the Scottish Ministers stating that she has decided to exercise the power under paragraph (1) in relation to Scotland.

(17) The Secretary of State may exercise the power under paragraph (1) or (9) in relation to installations situated in Wales where—

(a) no agreement has been reached with the National Assembly for Wales;

(b) she considers that it is necessary to do so to ensure that the United Kingdom complies with its obligations under the Directive; and

(c) she serves a notice on the National Assembly for Wales stating that she has decided to exercise the power under paragraph (1) in relation to Wales.

(18) The Secretary of State may exercise the power under paragraph (1) or (9) in relation to installations situated in Northern Ireland where—

(a) no agreement has been reached with the Department of the Environment;

(b) she considers that it is necessary to do so to ensure that the United Kingdom complies with its obligations under the Directive; and

(c) she serves a notice on the Department of the Environment stating that she has decided to exercise the power under paragraph (1) in relation to Northern Ireland.

(19) In paragraph (9), the “recovery phase” means the earliest phase for which allowances allocated to that installation under paragraph (1)(b) or (1)(c) have not already been issued under regulation 20(3)(b).