The Greenhouse Gas Emissions Trading Scheme Regulations 2012

Adjustment of allocation: significant capacity reductions

6.—(1) This sub-paragraph applies where a sub-installation has had a significant capacity reduction—

(a) after 30th June 2011, or

(b) on or before that date, but the extent of the reduction could not be determined before 30th September 2011.

(2) Where sub-paragraph (1) applies the operator of the installation must, by the relevant date, submit to the regulator a notice containing—

(a) a statement of the reduced capacity, and of the installed capacity of the sub-installation after taking into account the capacity reduction; and

(b) a statement that the data submitted under paragraph (a) have been verified.

(3) For that purpose—

(a) the relevant date is the later of—

(i) the last day of the period of 7 months following the date of the change of capacity;

(ii) 31st December in the year in which that change occurred; or

(iii) 1st February 2013; but

(b) where the relevant date falls before 30th May 2013, the statement referred to in sub-paragraph (2)(b) need only be submitted by the latter date.

(4) Once the operator has submitted the information required by sub-paragraph (2) the regulator must—

(a) in accordance with Article 18 of the Free Allocation Decision, calculate the activity levels for the reduced capacity of the sub-installation to which the significant capacity reduction relates in accordance with Article 18(3) of the Free Allocation Decision;

(b) in accordance with Article 21(2) of the Free Allocation Decision, reduce the preliminary annual number of allowances allocated to each sub-installation by the preliminary annual number of allowances allocated to the sub-installation concerned calculated in accordance with Article 19(1) of the Free Allocation Decision insofar as the significant capacity reduction is concerned; and

(c) in accordance with Article 21(2) of the Free Allocation Decision, revise the preliminary total annual amount for the installation concerned in accordance with the methodology applied to determine the preliminary total annual amount prior to the significant capacity reduction.

(5) The regulator must request the registry administrator to withhold the allocation of allowances to the operator of an installation for as long as any of the following circumstances obtains—

(a) the regulator is investigating whether or not there has been a significant capacity reduction in relation to the installation;

(b) the information required under sub-paragraph (2)—

(i) has not been submitted in accordance with that sub-paragraph; or

(ii) has been submitted but is insufficient;

(c) the operator has submitted a notice under sub-paragraph (2)(a), but has not yet submitted the statement under sub-paragraph (2)(b);

(d) the regulator is carrying out functions under sub-paragraph (4);

(e) a notification has been given to the European Commission pursuant to paragraph 9(3)(d) and the notified amount of allowances has not yet been approved by the European Commission; or

(f) a notification has been made to the registry administrator under regulation 80(11) but the necessary changes to the national allocation table have not yet been made.

(6) The registry administrator must comply with a request made under sub-paragraph (5).

(7) Where the regulator makes a request under sub-paragraph (5) the regulator—

(a) must notify the operator of the decision to do so as soon as is reasonably practicable; and

(b) may, if the regulator considers it appropriate to do so, subsequently notify the operator that—

(i) the allocation of allowances will be permanently reduced; or

(ii) the allowances (or a proportion of them) will be issued.

(8) Where the European Commission approves the preliminary total annual amount of allowances notified under paragraph 9(1), the regulator must treat the installed capacity of the sub-installation after having had a significant capacity reduction as the sub-installation’s initial installed capacity when assessing any subsequent significant capacity change.