UK ETS: HSE Legislation Update

There has been an important update to HSE legislation with regards to the UK ETS scheme.

From 1st January to 31st March 2023, hospitals and small emitters (HSEs) can voluntarily re-join the main UK ETS scheme for the 2024 and 2025 scheme years.

Unlike the HSE scheme, main scheme participants do not have emission targets.

However, you may be eligible to receive free allocations upon joining the main scheme, if you submitted a full free allocation (NIMs) application in 2019 and it was determined to be valid by the UK ETS Authority. You may apply to the New Entrant Reserve to receive free allocation.

You are not eligible to receive free allocation upon joining the main scheme if:

  • You are an electricity generator.
  • You did not submit a NIMs application in 2019.
  • You did submit a NIMs application in 2019 however your application was not valid.


In any of these scenarios, you cannot apply to the New Entrant Reserve and instead must purchase allowances to cover all reportable emissions.

Please also note; those installations which are currently main scheme participants cannot opt out of the main UK ETS scheme, if they currently meet the HSE criteria, until the second half of the current UK ETS phase which begins in 2026.

If you have any questions and would like to discuss the latest update to HSE legislation with a member of the Swan Energy team, please contact us.

Rebecca Scarratt

Carbon Consultant

Rebecca Scarratt

Carbon Consultant

Rebecca has joined the Swan Energy team in 2021. She graduated from the University of Hull with a BSc in Geology with Physical Geography in 2020 and went on to do a MSc in Renewable Energy. Her Masters’ thesis focused on how future climate change may impact the Humber region’s wind energy sector and how adaptation strategies could be used to reduce vulnerability.

In her role at Swan Energy, Rebecca supports the consultancy work the team does with clients across the UK.