The UK ETS Authority published proposals on three operational changes to the scheme on the 23^rd of September 2024.

The UK ETS Authority has now begun seeking views on changes to the functioning of the scheme in the following areas:

• The publication of UK ETS Registry transaction data
• The disclosure of UK ETS information by a national authority
• Applications to obtain Ultra-Small Emitter (USE) status for the 2026-2030 allocation period

While recent consultations have covered a large array of proposals and focused on the extension of the scheme within current but also new sectors, the latest release outlines administrative revisions to three specific areas.

Proposed amendments to each of these areas are further detailed below. This is a brief overview of the full consultation, to read the full document click here.

1. Publication of UK ETS Registry transaction data

Currently, the UK ETS Authority is required to publish a range of annual reports detailing registry account holders, their free allocation received, emissions reported and allowances surrendered. All public UK ETS reports can be viewed here. From May 2025, the Authority will also be obligated by the current legislation to publish a summary of registry account transactions from three years ago.  This summary would need to detail the number of transactions, the number of allowances involved as well as both the type of transferring receiving account.

The proposal is to publish a full history of completed transactions, rather than the current requirement of a summary report, with the exception of internal Authority transfers. This proposal would seek to keep the delay period for publication at three years. With this change, the Authority aims to increase market transparency and allows better review of the functionality of the market. It is believed that the three year delay still offers adequate protection to any commercially sensitive data.

2. Disclosure of UK ETS information by a national authority

The sharing of UK ETS information by the Regulators or the Authority is currently prohibited, apart from some strict exceptions. As it stands, UK ETS data is unable to be shared with Government departments outside of the designated ETS team. In this consultation, plans to loosen the restrictions on data shared are outlined with the main cited benefit being more effective policy development across other Government departments which aim to reduce greenhouse gas emissions. More specifically, there is a proposal to allow data sharing from each of the UK national Regulators with the Climate Change Committee (CCC).

The Authority has also outlined plans to allow sharing of information with external third parties, where necessary. In the past, external contractors have been used to aid policy development but have been unable to access UK ETS information due to current regulation. Although there is mention of commercial non-disclosure agreements being used in these cases, the Authority has sought opinion on whether or not this is adequately robust protection.

3. Ultra-Small Emitter (USE) Applications for 2026-2030

USE status allows eligible installations with a low level of emissions to opt out of the scheme almost completely, by only having to monitor emissions internally and ensure they do not breach the threshold. Installations can only can gain USE status by opting out before the period begins. The current requirements for the 2026 – 2030 allocation period are as follows:

• The regulated activity must have begun to be carried out at the installation on or before 1January 2021.
• The installation’s reportable emissions in 2021, 2022 and 2023 scheme years do not exceed the maximum amount (2,499 tonnes CO2e as per paragraph 1 of Schedule 8 to the Order).

The UK ETS Authority has proposed that qualifying installations (under 2 500tCO₂ per annum) who have commenced a regulated activity before the allocation period and have at least one full scheme year of verified emissions should be illegible for USE status. Meaning a site who began operation in mid-2021 shall submit data from scheme years 2022, 2023 & 2024. Whereas a site who began operation on January 1^st 2024 will only submit the one years verified data from scheme year 2024.

If you would like to respond, you can do so before the closing date of the 15^th of October via email to ukets.consultationresponses@energysecurity.gov.uk. 

Click here to get in touch with the Swan Energy team if you have any questions.