On 28 April 2021, there was published on the legislation.gov.uk website The Recognised Auction Platforms and Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021. The statutory instrument comes into force on 19 May 2021.
The statutory instrument amends the Recognised Auction Platforms Regulations 2011 (the RAP Regulations) and Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (the Auctioning Regulations). The RAP Regulations ensures the appropriate regulatory treatment is in place for the auctioning and trading of UK emissions allowances. The Auctioning Regulations make detailed provision for the auctioning of emissions allowances to emit 1 tonne of carbon dioxide equivalent under the UK Emissions Trading Scheme (the UK ETS) and introduces mechanisms to support market stability in this new scheme. The UK ETS was established by the Greenhouse Gas Emissions Trading Scheme Order 2020.
The statutory instrument clarifies the position in the RAP Regulations and clarifies the position and corrects errors in the Auctioning Regulations. In particular:
- Regulation 4 of the statutory instrument omits regulation 2(2) of the Auctioning Regulations.
- Regulation 10 of the statutory instrument amends regulation 16 of the Auctioning Regulations, which sets out the requirements that persons must meet in order to bid in auctions.
- Regulation 7 of the statutory instrument amends regulation 7 of the Auctioning Regulations, which sets out how the auction clearing price for UK ETS auctions will be determined.
- Regulation 9 of the statutory instrument amends regulation 12 of the Auctioning Regulations, which provides for the cost containment mechanism that enables HM Treasury to amend the distribution or volume of allowances to be auctioned in any one year if the carbon price exceeds specified limits.
These amendments need to be in force in advance of the first UK ETS auction on 19 May 2021.