The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2025

Amends/Commences: The Greenhouse Gas Emissions Trading Scheme Order 2020

Comes into force: 31st March 2025

Jurisdiction: UK

Summary

To align with the Carbon Border Adjustment Mechanism (CBAM), the start of the second allocation period for stationary installations has been moved from 2026 to 2027, making 2026 a standalone scheme year. The 2026 scheme year is to be treated as an extension of the first allocation period of 2021–2025.

Hospitals, Small and Ultra-Small Emitters

Hospitals and small emitters (HSE) and ultra-small emitters (USEs) may request to voluntarily exit the HSE or USE scheme and re-enter the main UK ETS for the 2027-2030 allocation period, and to apply to receive free allocation in that period if they are eligible.

Installations with low levels of emissions which started operations between 2nd January 2021 and 1st January 2024 inclusive can apply to be classed as ultra-small emitters (USEs) during the 2027-2030 period.

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