The Scottish Government
Detail of outcome
This consultation included a small number of proposals that require implementation via legislation ahead of the 2023 scheme year, so we are publishing an early response to set out final positions on these particular proposals before they take effect.
We will publish a full response to the remaining proposals in the consultation at a later date, including on aligning the UK ETS cap with net zero.
This early response outlines the feedback we received and the Authority decisions on the following proposals:
- aviation
- the inclusion of flights from the UK to Switzerland in the UK ETS from January 2023
- the permitting of virtual site visits for aviation verifiers in situations other than circumstances that are serious, extraordinary and unforeseeable
- updating the references in UK ETS legislation to the Renewable Transport Fuel Obligation (RTFO) sustainability criteria that are relevant to the eligibility of sustainable aviation fuels
- amendment to the Activity Level Changes Regulation due to the 2020 COVID year
- operational amendments to the UK ETS included in Chapter 9 of the consultation, including minor permitting, monitoring, reporting and verification (PMRV) amendments, and a window for hospitals and small emitters to re-enter the main scheme
Detail of feedback received
We received 90 responses to the proposals covered in this government response, from a variety of stakeholders including:
- 18 trade associations
- 14 aviation operators
- 8 manufacturing organisations
- 6 chemical organisations
- 6 oil and gas organisations
- organisations in the food and drink, and steel sectors
- local authorities
- consultancies, think tanks and NGOs
- other sectors
Original consultation
Consultation description
The UK ETS Authority made up of the UK government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland is seeking stakeholder views on proposals to develop the UK ETS which operates across England, Scotland, Wales and Northern Ireland.
Audience
This consultation is open to all, but we expect it to be of particular interest to:
- individual companies and representatives of industrial, power and aviation sectors with obligations under the UK ETS
- environmental groups
- individual companies and representatives of maritime, waste, greenhouse gas removals and agricultural sectors
To note, this consultation does not apply to NI electricity generators who participate in the EU ETS by virtue of the Ireland / Northern Ireland Protocol.
Contents
Chapter 1 sets out proposals for changes to align the UK ETS cap and trajectory with our net zero target.
Chapter 2 considers the role of Free Allocation policy as a carbon leakage mitigation tool in the context of the net zero aligned cap. It also puts forward potential improvements to the current Free Allocation regime based on stakeholder views expressed in response to the 2019 consultation on carbon pricing and the call for evidence on free allocation in 2021.
Chapter 3 sets out proposals for bringing in unallocated allowances and/or the flexible share to the market.
Chapter 4 calls for evidence on potential drivers of evolving market conditions in the UK ETS and objectives for market stability policy as the scheme evolves.
Chapter 5 sets out the scope of the review into UK ETS aviation policy. This includes proposals on the future of aviation free allocation, considering responses to the 2019 consultation on carbon pricing, the 2021 call for evidence, and UK government commissioned economic research. It also considers how the use of Sustainable Aviation Fuels (SAFs) could be incentivised under the UK ETS and options for expanding the coverage of the scheme within the aviation sector.
Chapter 6 sets out proposals and calls for evidence on possible changes to the rules for sectors currently covered by the UK ETS to ensure more greenhouse gas emissions are covered by the scheme.
Chapter 7 sets out proposals to expand the scope of the UK ETS to the domestic maritime sector and calls for evidence on expanding the UK ETS to include waste incineration and energy from waste.
Chapter 8 calls for early views on the incorporation of greenhouse gas removal (GGR) into the UK ETS and the monitoring, reporting and verification requirements necessary to address greenhouse gas emissions in the land use and agriculture sectors. We do not propose expanding the UK ETS to agriculture.
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