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The Community Emissions Trading Scheme (Allocation of Allowances for Payment) Regulations 2008

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Transfer of excess allowances

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9.—(1) If, following an auction, the Environment Agency transfers a number of allowances to a nominated holding account in excess of the number of allowances which should have been transferred to that account (“excess allowances”), when the transfer of excess allowances comes to the account holder’s notice, that account holder must, as soon as reasonably practicable—

(a)give notice to the Environment Agency and to the person conducting the auction;

(b)where the nominated holding account is administered by the Environment Agency, request that the Environment Agency transfers the excess allowances from that account to the Party holding account.

(2) When an excess transfer comes to the notice of the Environment Agency, whether by notification from an account holder under sub-paragraph (1)(a) or otherwise, and if—

(a)the Environment Agency is not in receipt of a request under sub-paragraph (1)(b); and

(b)the nominated holding account is administered by the Environment Agency,

then the Environment Agency must transfer the excess allowances from that account to the Party holding account as soon as reasonably practicable.

(3) In the event that an account holder sells or otherwise deals in the excess allowances or any interest in the excess allowances the person conducting the auction may require the account holder to pay—

(a)the auction clearing price, or

(b)if the auction clearing price is, in accordance with the Scheme, replaced by the reserve price, the reserve price,

in each case multiplied by the number of excess allowances transferred to the account holder.

(4) Payment required to be made under paragraph (3) must be made into the nominated bank account by the date specified by the person conducting the auction.

(5) If payment required under paragraph (3) is not received in full by the date specified by the person conducting the auction, any outstanding amount is payable by the account holder on demand.

(6) In paragraph (3), “reserve price” has the meaning given to it by the Scheme.

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