Participants in the EU Emissions Trading System EU ETS must still comply with their obligations for the 2020 compliance year. For more information, see guidance on EU ETS obligations in 2021. From 1 January 2021 businesses subject to the new UK Emissions Trading Scheme UK ETS, which is of the same scope as the EU ETS it replaces, should prepare to comply with the new scheme. Read the guidance on Participating in the UK ETS. Overview
This guide covers the European Union Emissions Trading System EU ETS Union Registry, the use of Kyoto units for compliance within the EU ETS and carbon allowance auctions. As a cap-and-trade system, the EU ETS sets an emissions cap or limit on the total emissions allowed by all EU ETS operators, but within that limit the carbon market allows participants in the System to buy and sell allowances as they require. The carbon price signifies the amount participants in the EU ETS are willing to pay per EU allowance 1 allowance EUA equals 1 tonne of carbon dioxide CO2 or its equivalent given demand and supply. In addition, EU Aviation allowances EUAAs have been created to be used for compliance by airline operators. Over the course of Phase III, 50 of allowances will be auctioned. ICE Futures Europe is conducting auctions of EU ETS Phase III EUAs and EUAAs on behalf of BEIS. Operators also have the option to use certain Kyoto Units for compliance within the EU ETS, subject to limits. An EU ETS operator can access the secondary carbon market to buy allowances or Kyoto Units through multiple routes
The European Union Registry is an online database hosted and managed by the European Commission by which EUAs, EUAAs and Kyoto Units are held, traded and surrendered for compliance purposes. Participants are advised to seek their own, independent professional advice on these matters. For more information about how the EU ETS works see How to participate in the EU ETS. Phase III registries
The EU ETS Union Registry operates in a similar way to an online bank account. The registry system is a web-based application that records
An account holder can hold, transfer, cancel or acquire EU Allowances and eligible Kyoto units. The European Union Transaction Log EUTL checks, records, and authorises all transactions that take place between accounts in the European Union registry. The EUTL can be viewed online and provides detailed information on the compliance of EU ETS operators, Union Registry account holders and transactions between accounts. Computerised registries are key components of the EU ETS and wider international emissions trading under the UN Framework Convention on Climate Changes UNFCCCs Kyoto Protocol. From June 2012, registry systems were brought together to a single registry system, operated and managed by the European Commission. Each Member State now has its own national administrator and national registry section within the single Union Registry. The Environment Agency is the national administrator for the UK and is responsible for the maintenance and administration of the UK national registry section within the European Union Registry. The functional requirements of the registry are determined by the European Commission through the Registry Regulations and the UNFCCC secretariat through various COPMOP decisions. How to open an account in the registry
Installations and aircraft operators who carry out Annex I activities, pursuant to Directive 200387EC, are required to open accounts in the Union Registry. In addition to operator accounts, the Union Registry also contains person holding accounts and trading accounts. Any individual or organisation can apply to open such accounts, which can be used purely for trading units. Such accounts have no compliance obligations. Any further questions or queries on the operation and functionalities of the Union Registry should be directed by email to the UK registry administrator.
Information on the Registry pre-2012 and migration to the Union Registry can be viewed on the National Archives website. Kyoto units in Phase III
Operators have the option to use certain Kyoto Units for compliance within the EU ETS, subject to limits on the type and quantity of units specified in the ETS Directive and Registry Regulation. These limits are set out below, along with information on how to use these units for compliance within the EU ETS. Type of units
Certain Certified Emissions Reductions CERs and Emissions Reduction Units ERUs can be used for compliance in the EU ETS. Further information on this, including FAQs, can be found on the European Commission website. Quantity of units
Operators and aircraft operators may exchange eligible CERs and ERUs for EUAs and EUAAs up to limits. Limits are cumulative across Phase II and Phase III of the EU ETS and are specified in a European Commission regulation on international credit entitlement adopted on 8 November 2013. How to use units in the EU ETS
In Phase III, certain CERs and ERUs can be swapped for EUAs, subject to the limits discussed above, in the Union Registry. Operators can transfer valid CERs and ERUs into a central account in the Union Registry, and once verified as eligible for use by that operator within the EU ETS the operators EUA holding account will be credited with the equivalent number of EUAs. Aircraft operators may request this swap and be credited with EUAAs. The European Commission Registry Regulation sets out the process for this in more detail. Operators of installations and aircraft operators regulated under the EU ETS should note that the exchange of eligible Commitment Period 1 International Project Credits into general and aviation allowances, must occur by 31st March 2015, after which they will become ineligible for use in the EU ETS. Your International Project Credit entitlement limit is displayed in your Operator Holding Account or your Aircraft Operator Holding Accounts. More information on this and the applicable rules is available on the European Commission International carbon market web page, specifically FAQ 7, 8 and 11. Any further questions or queries on the holding or swapping of Kyoto Units within the Registry should be directed by email to the UK registry administrator etregistryhelpenvironment-agency.gov.uk. Phase III auctioning
Auctioning is an effective way of distributing allowances to the market and reinforces the polluters pay principle. It encourages businesses to take account of the full cost of carbon in the decisions they make. The European Commissions Auctioning Regulation governs the auctioning of Phase III EUAs and EUAAs.
It provided for the establishment of a common EU auction platform and granted member states the right to opt out and set up national platforms - the UK, Germany and Poland exercised this right. The UK was the first EU member state to hold an auction in phase II 2008 to 2012 and auctioned 10 of allowances compared to the EU average of 3. The UK appointed ICE Futures Europe to conduct auctions of EU ETS Phase III allowances on behalf of the then DECC. Further information is available on the ICE emissions website. Certain firms will need to apply to the Financial Conduct Authority FCA for a variation of permission in order to participate in the regulated activity of bidding in emissions auctions. Further information is available on the FCA website. BEIS performs the role of UK Auctioneer for these auctions. This role is required by EU legislation and is responsible for the conduct of the auctions. The EU is in the process of appointing a Single Auction Monitor SAM to monitor and report on the conduct of certain emissions auctions across Europe. For more information, please see the European Commission website. For other information about the UKs EU ETS auctions please contact enquiriesbeis.gov.uk. Phase III auction calendar
The full schedule for Phase III EUA and EUAA auctions is available on the ICE emissions auctions web pages. Phase III auction results
The UKs first Phase III EUA auction was held on 21 November 2012. For more information please see the associated press notice. For results from further phase III auctions, please see the ICE Futures Europe emissions auctions web pages. For additional coverage of auction results please see the European Commission web pages. Phase II auction results
During Phase II of the EU ETS, the UK held 30 successful competitive auctions, selling almost 123 million EUAs and raising approximately 1.3 billion for the exchequer. For results from Phase II auctions, please see the Debt Management Office website. Re-procurement of the UKs Phase III EU ETS auction platform
UK ministers agreed to retain the UKs opt-out from the EU Emissions Trading System EU ETS common auction platform following expiry of the contract with the current provider in November 2017. On 4 February 2016 DECC launched the first stage of the re-procurement process by publishing a Prior Information Notice through the Tender Electronics Daily Website, and held a market engagement day for potential bidders in March 2016. If you have enquiries, please contact enquiriesbeis.gov.uk.
Further information
For other information about the auctions please contact enquiriesbeis.gov.uk. Union Registry Publicly Accessible Information
UN SIAR Assessment
The implementation of a national registry is required in order for each Annex B Party to be deemed eligible to participate in the Kyoto mechanisms. Requirements for national registries are set primarily through decision 13CMP.1. The below information is being made available in line with reporting requirements as set out under the Kyoto protocol which ensures consistency of reporting of public information between registries and facilitates the review of public information during the annual assessments performed under the Independent Assessment Report SIAR common operational procedure, in support of the expert review. Each registry is assessed to determine whether the appropriate requirements are met and results are forwarded in the form of Standard Independent Assessment Reports SIARs to the Expert Review Teams working under Article 8 of the Kyoto Protocol. Pursuant to paragraphs 44 to 48 of the annex to decision 13CMP.1 of the Kyoto Protocol, below is a list of the publicly available information relating to the United Kingdoms National Registry as required by the SIAR assessment. Account information from the Union Registry
Paragraph 45 of the annex to decision 13CMP.1 discusses information about accounts that must be publicly accessible. Account information from the Union Registry can be viewed in the report on Account information
Account information PDF, 1 MB, 43 pages
In accordance with Commission Regulation Article 110 EU No 3892013 the following information has been deemed to be confidential Holdings of all accounts all transactions made, the unique unit identification code of the allowances and the unique numeric value of the unit serial number of the Kyoto units held or affected by a transaction. Representative name and contact information the full name, mailing address, telephone number, facsimile number and email address of the representative of the account holder is also deemed to be confidential. Information, including the holdings of all accounts, all transactions made, the unique unit identification code of the allowances and the unique numeric value of the unit serial number of the Kyoto units held or affected by the transaction, held in the EUTL, the Union registry and every other KP registry shall be considered confidential except as otherwise required by Union law, or by provisions of national law that pursue a legitimate objective compatible with this Regulation and are proportionate
Information on Article 6 Projects JI Projects
Paragraph 46 of the annex to decision 13CMP.1 discusses information about article 6 projects, also known as Joint Implementation JI projects that must be publicly available. The United Kingdom of Great Britain and Northern Ireland does not host any Joint Implementation Projects. Information on Unit HoldingsTransactions
Paragraph 47 of the annex to decision 13CMP.1 discusses information about the unit holdings and transactions that must be publically accessible. Read the SEF report for the information as stipulated in Paragraph 47
2014 UK SEF submission for 2013 reporting year PDF, 32.6 KB, 7 pages
Holding and transaction information is only provided on a holding type level, due to more detailed information being declared confidential by EU regulations.