This is a draft item of legislation. This draft has since been made as a UK Statutory Instrument: The Greenhouse Gas Emissions Trading Scheme (Nitrous Oxide) Regulations 2011 No. 1506
(This note is not part of the Regulations)
These Regulations exercise an option provided by Article 24 of Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community (“the Directive”). The Directive is implemented, as regards installations in the United Kingdom, by the Greenhouse Gas Emissions Trading Scheme Regulations 2005 (“the 2005 Regulations”)(1).
The Emissions Trading Scheme (“ETS”) established under the Directive at present applies only to emissions of carbon dioxide from the activities specified in Annex I to the Directive. From 1st January 2013, Annex I will be replaced by a new version of that Annex which includes, in particular, the emission of nitrous oxide (N2O) from the production of nitric acid(2). Under Article 24 of the Directive, however, a Member State may already apply emission allowance trading in accordance with the Directive to greenhouse gases and activities that are not yet listed in Annex I, provided that it obtains the approval of the European Commission. Where both the activity and the gas concerned are not yet listed in Annex I, the Commission’s approval is subject to the comitology procedure laid down by Article 5a of Decision 1999/468/EC(3). The United Kingdom made an application to include in the ETS nitrous oxide emissions from the production of nitric acid, and following the outcome of that procedure the Commission adopted its approval decision on …. April 2011. In giving its approval, the Commission also agreed to consequential amendments of the relevant approved national allocation plan; this is the plan that lays down the amounts of greenhouse gas allowances that are allocated to different installations within the United Kingdom for the second phase of the ETS (2008-2012).
Regulation 2 specifies that plan as so amended, for the purposes of the definition of “approved national allocation plan” in regulation 2(1) of the 2005 Regulations, and revokes in consequence regulation 2 of the Greenhouse Gas Emissions Trading Scheme (Miscellaneous Provisions) Regulations 2007(4).
Regulation 3(2) and (3) amends regulations 2(1) and 21(2) of the 2005 Regulations to take into account that new specification.
Regulation 3(4) makes provision in relation to the new entrant reserve (as defined in regulation 2(1) of the 2005 Regulations) in the case of nitric acid production.
Regulation 3(5) ensures that project credits under the Kyoto Protocol(5) may not be used to fulfil an obligation to surrender allowances for nitrous oxide emissions.
Regulation 3(6) amends the table in Schedule 1 to the 2005 Regulations so that it now includes an entry for the emission of nitrous oxide from the production of nitric acid.
Regulation 4 contains transitional provisions. These ensure that an operator who has already begun nitric acid production before the commencement of these Regulations has a period of grace during which to apply for a corresponding permit, or variation of a permit, under the 2005 Regulations. Furthermore, an operator who has monitored emissions of nitrous oxide from 1st April 2011 will be able to receive its full allocation of allowances under the national allocation plan; otherwise the allocation for 2011 is reduced to take into account the emissions that cannot be accounted for between 1st April 2011 and the commencement date.
Regulation 5 contains a saving provision.
A full impact assessment of the costs and benefits of this instrument is available from the Department of Energy and Climate Change’s National Climate Change Division (telephone 0300 060 4000), and is published alongside the instrument and its Explanatory Memorandum on the legislation website of The National Archives (http://www.legislation.gov.uk). A transposition note setting out how these Regulations implement the relevant provisions of the Directive is annexed to that Explanatory Memorandum.
SI 2005/925; relevant amendments are noted above.
See Article 1.30 of, and Annex I to, Directive 2009/29/EC; and see the transitional provision in Article 3.
Council Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ No L 184, 17.7.1999, p. 23); Article 5a was inserted by Council Decision 2006/512/EC (OJ No L 200, 2.7.2006, p 11).
Cm. 6485. Under Articles 6 and 12 of that Protocol to the UN Framework Convention on Climate Change, for the purpose of meeting its commitments under Article 3 of the Protocol, a Party included in Annex I may use emission reduction units (ERUs) resulting from projects aimed at reducing emissions (or enhancing sinks) of greenhouse gases, or make use of certified emissions reductions (CERs). Under Article 11a of the Directive, Member States are permitted to allow operators to use such units up to a percentage of the allocation of allowances to each installation.
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