UK to allow small emitters to opt out of emissions trading

Posted at May 28, 2012 » By : » Categories : News » Comments Off on UK to allow small emitters to opt out of emissions trading

The UK government has confirmed that small emitters and hospitals will be given the option to ‘opt out’ of the EU Emissions Trading System (EU ETS) from 2013.

The opt out scheme is part of the government’s drive to reduce the burden of unnecessary regulation as part of its wide-ranging ‘Red Tape Challenge’.

The government says the scheme could cover some 250 organisations, saving them up to £80 million between 2013 and 2020.

These organisations account for only 1% of UK emissions, the Department of Energy and Climate Change (DECC) said in a statement, but can see costs of over £1/tCO2 compared to just £0.04/tCO2 for larger emitters.

“Under the proposals smaller installations, who experience higher costs from complying with the current regulations, will be able to opt out of the system from 2013,” says Energy Minister Greg Barker. “We have worked closely with industry looking at their needs in order to develop and design a policy which genuinely saves companies money and time, while still ensuring we meet environmental goals.”

Organisations will have to have verified annual emissions less than 25,000 tCO2e from 2008 onwards to be eligible to opt out of the EU ETS and, where an organisation undertakes combusion, have thermal capacity of 35 MW between 2008 and 2010.

Only stationary installations will be eligible, so airlines will not be able to opt out under the scheme.

But organisations that opt out of the EU ETS and then exceed this limit will face fines for every extra tonne of CO2 emitted in line with the EU emission allowance price.

The move has been welcomed by industry groups such as the British Ceramic Confederation and the Mineral Products Association.

“Industry is going through a tough time and anything the government can do to ease the regulatory burden can only be good for business, jobs and growth,” says Nigel Jackson, chief executive of the Mineral Products Association.

However, the influential Parliamentary committee, the Environmental Audit Committee has strongly criticised the government’s efforts to cut environmental red tape as potentially damaging for the country’s burgeoning green economy.

Organisations have until July 18 this year to apply to the opt out scheme, which will take effect from January next year when Phase III of the EU ETS begins.

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Related stories:
UK government publishes long-awaited Energy Bill (23-May)
Cutting environmental red tape stalling green economy, UK warned (21-May)
UK promises to cut red tape on EU ETS (8-May)
‘Greenest ever’ government cuts environmental red tape (20-Mar)

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