{
  "url": "https://openlegislation.uk/draft-greenhouse-gas-emissions-trading-scheme-amendment-order-2025/article-14",
  "json_url": "https://openlegislation.uk/draft-greenhouse-gas-emissions-trading-scheme-amendment-order-2025/article-14.json",
  "legislation": "ukdsi/2025/9780348266597",
  "legislation_title": "The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025",
  "legislation_url": "https://openlegislation.uk/draft-greenhouse-gas-emissions-trading-scheme-amendment-order-2025",
  "path": "article/14",
  "kind": "article",
  "number": "14",
  "heading": "Articles 3za to 3zc inserted",
  "text": "After Article 3 insert—\n“Article 3za\nCeasing operation: free allocation for last year of operation based on activity level in last year, etc.\n1. This Article applies where:\n(a) an FA installation ceases operation in a scheme year (the “last FA year”);\n(b) except where the installation has ceased operation in a previous scheme year, the surrender or revocation of an FA installation’s greenhouse gas emissions permit takes effect in a scheme year (the “last FA year”); or\n(c) a sub-installation of an FA installation ceases operation in a scheme year (the “last FA year”) but the FA installation as a whole does not.\n2. The regulator must:\n(a) based on the report on activity levels in the last FA year, determine the activity level in that year:\n(i) where paragraph 1(a) or (b) applies, of each sub-installation of the installation;\n(ii) where paragraph 1(c) applies, of the sub-installation referred to in that point; and\n(b) in respect of each sub-installation referred to in point (a):\n(i) where the historical activity level of the sub-installation has previously been determined, calculate:\n(aa) an adjustment to free allocation for the last FA year by recalculating the preliminary and final annual number of allowances to be allocated in respect of the sub-installation using the activity level determined under point (a) instead of the historical activity level of the sub-installation; and\n(bb) an adjustment to free allocation so that it is zero for the scheme years following the last FA year;\n(ii) where the historical activity level of the sub-installation has not previously been determined, calculate the preliminary and final annual number of allowances to be allocated in respect of the sub-installation for the last FA year in accordance with Article 3a(3)(b) and (c) using the activity level determined under point (a) of this paragraph.\n3. Where paragraph 2 requires the regulator to determine a sub-installation’s activity level in the last FA year, Articles 3a to 6 do not apply in relation to that sub-installation (but, where relevant, those Articles continue to apply in relation to any other sub-installation of the installation upon submission of the report on activity levels in the last FA year).\n4. This Article is subject to Article 3zb (which provides that in certain circumstances the adjustment referred to in paragraph 2(b)(i)(aa) must not be calculated).\nArticle 3zb\nDecarbonisation condition: application for no adjustment to last FA year’s allocation where product benchmark sub-installation ceases operation\n1. This Article applies where:\n(a) a product benchmark sub-installation (the “old PB sub-installation”) of an FA installation has ceased operation in a scheme year (the “last FA year”);\n(b) the report on activity levels in the last FA year is accompanied by:\n(i) an application for there to be no adjustment to the free allocation of the old PB sub-installation for the last FA year under Article 3za on the grounds that the decarbonisation condition will be met in relation to the old PB sub-installation on or before the date stated in the application (the “restart date”);\n(ii) evidence that the decarbonisation condition will be met in relation to the old PB sub-installation on or before the restart date; and\n(c) the permit for the installation has not been surrendered or revoked.\n2. The decarbonisation condition is met in relation to the old PB sub-installation if:\n(a) the old PB sub-installation has ceased operation;\n(b) new infrastructure has been installed at the installation resulting in a new sub-installation (other than a product benchmark sub-installation with the same product benchmark as the old PB sub-installation) or a change to the system boundaries of an existing sub-installation (other than a product benchmark sub-installation);\n(c) there has been no material reduction in the overall level of production of pre-cessation products produced at the installation (whether or not there is a change to the proportion of the products which make up that overall level of production); and\n(d) the installation of the new infrastructure referred to in point (b) has resulted in a material reduction in the specified emissions per unit of production of those pre-cessation products which continue to be produced at the installation.\n3. For the purposes of paragraph 2(c), a product is a “pre-cessation product” if it was produced at the installation involving a process within the system boundaries of the old PB sub-installation prior to the installation of the new infrastructure referred to in paragraph 2(b).\n4. After receiving the application, the regulator must, as soon as reasonably practicable:\n(a) assess whether or not the decarbonisation condition will be met in relation to the old PB sub-installation on or before the restart date; and\n(b) send the evidence, the regulator’s assessment and the reasons for it to the UK ETS authority.\n5. The UK ETS authority must, after considering the evidence and the regulator’s assessment and reasons:\n(a) determine whether or not the decarbonisation condition will be met in relation to the old PB sub-installation on or before the restart date;\n(b) notify the regulator of the determination;\n(c) if the UK ETS authority determines that the decarbonisation condition will be met in relation to the old PB sub-installation on or before the restart date, notify the regulator of any matters in respect of which the UK ETS authority will need evidence in order to determine whether or not the decarbonisation condition has been met (in addition to reports of the installation’s reportable emissions and activity levels).\n6. If the UK ETS authority determines under paragraph 5 that the decarbonisation condition will not be met in relation to the old PB sub-installation on or before the restart date:\n(a) the regulator must notify the operator of the determination;\n(b) Article 3za applies to the old PB sub-installation without the qualification referred to in paragraph 7(b) (and an adjustment is to be made to free allocation for the last FA year).\n7. If the UK ETS authority determines under paragraph 5 that the decarbonisation condition will be met in relation to the old PB sub-installation on or before the restart date:\n(a) the regulator must notify the operator of the determination and of any matters referred to in paragraph 5(c);\n(b) Article 3za applies to the old PB sub-installation, but the adjustment referred to in paragraph 2(b)(i)(aa) of that Article must not be calculated (and no adjustment is to be made to free allocation for the last FA year on submission of the report on activity levels in the last FA year);\n(c) the operator must notify the regulator of the date (which must be a date on or before the relevant date) on which the operator considers that the decarbonisation condition has been met in relation to the old PB sub-installation;\n(d) the regulator must notify the UK ETS authority where:\n(i) the operator fails on or before the relevant date to notify the regulator of a date under point (c); or\n(ii) the installation’s permit is surrendered or revoked on or before the relevant date.\n8. Where the operator notifies the regulator of a date under paragraph 7(c):\n(a) the first activity level report submitted under Article 3 that contains data for a period of at least 6 months before that date must include the information referred to in section 3 of Annex 4 to the Free Allocation Regulation and must be accompanied by evidence of any matters referred to in paragraph 5(c);\n(b) as soon as reasonably practicable after receiving the activity level report and any accompanying evidence, the regulator must:\n(i) assess whether the decarbonisation condition has been met in relation to the old PB sub-installation on or before the relevant date;\n(ii) send the assessment, activity level report and any accompanying evidence to the UK ETS authority;\n(c) on receiving the assessment, activity level report and any accompanying evidence, the UK ETS authority must:\n(i) determine whether or not the decarbonisation condition has been met in relation to the old PB sub-installation on or before the relevant date;\n(ii) notify the regulator of the determination;\n(d) the regulator must notify the operator of a determination under point (c).\n9. Despite paragraph 7(b), if any of the following occurs, Article 3za applies to the old PB sub-installation without the qualification referred to in paragraph 7(b) (and an adjustment is to be made to free allocation for the last FA year):\n(a) the UK ETS authority determines that the decarbonisation condition has not been met in relation to the old PB sub-installation on or before the relevant date;\n(b) the operator fails on or before the relevant date to notify the regulator of a date under paragraph 7(c);\n(c) the installation’s permit is surrendered or revoked on or before the relevant date.\n10. In this Article, the “relevant date” is the restart date or, where the UK ETS authority determines under Article 3zc that the decarbonisation condition will be met in relation to the old PB sub-installation on or before the extended date referred to in paragraph 3 of that Article, the extended date.\nArticle 3zc\nApplication for extension of time to meet decarbonisation condition\n1. This Article has effect for the purposes of Article 3zb.\n2. At least 6 months before the restart date, the operator may on one occasion only apply to the regulator to extend the date on or before which the decarbonisation condition will be met in relation to the old PB sub-installation.\n3. An application must be accompanied by:\n(a) the operator’s explanation of the reason why the decarbonisation condition will not be met in relation to the old PB sub-installation on or before the restart date and any evidence to support the explanation;\n(b) evidence that the decarbonisation condition will be met in relation to the old PB sub-installation on or before a further date (the “extended date”).\n4. After receiving the application, the regulator must, as soon as reasonably practicable:\n(a) assess whether or not the decarbonisation condition will be met in relation to the old PB sub-installation on or before the extended date; and\n(b) send the explanation, evidence, the regulator’s assessment and the reasons for it to the UK ETS authority.\n5. The UK ETS authority must after considering the explanation, evidence and the regulator’s assessment and reasons:\n(a) determine whether or not the decarbonisation condition will be met in relation to the old PB sub-installation on or before the extended date;\n(b) notify the regulator of the determination.\n6. The regulator must notify the operator of the determination.”.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "footnote",
      "label": "f1",
      "text": "See article 14 of S.I. 2020/1265 for the definition of “UK ETS authority”."
    },
    {
      "type": "footnote",
      "label": "f2",
      "text": "EUR 2019/331, amended by S.I. 2020/1557, 2021/1455, 2022/1173, 2023/850, 2023/1387, 2024/192 and this Order. See article 4(1) of S.I. 2020/1265 for the definition of “Free Allocation Regulation”."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukdsi/2025/9780348266597/article/14",
    "retrieved_at": "2026-10-30T14:40:04.782009+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}