UK small emitters apply to opt out of ETS

London, 8 August (Argus) — Small emitters and hospitals in the UK have applied to opt out of the EU emissions trading scheme (ETS) from 2013, the UK's Department of Energy and Climate Change (Decc) said today, the day that the application period closed.

Decc received 244 applications from operators wishing to be excluded from the EU ETS and participate in the UK's Small Emitter and Hospital Opt-out Scheme instead. The UK government has now submitted the final list of installations to the European Commission for approval to be excluded, and operators will be notified after the commission makes its decision.

The opt-out scheme aims to reduce the regulatory burden on small emitters while maintaining incentives for emission reductions, Decc said. Administrative costs for small emitters can reach over £1/t CO2 equivalent (CO2e), while for large emitter costs are approximately 4p/t CO2e, according to Decc figures.

Decc estimates that the scheme will offer savings to industry of up to £80mn ($125mn) over phase 3 of the ETS, which runs from 2013 to 2020.

Installations that have opted out will be given an individual emissions reduction target and will face a penalty if annual emissions exceed the target. Operators will not need to surrender allowances against emissions and so will not receive a free allocation of allowances. The savings offered under the scheme include the replacement of the requirement to surrender allowances with an emission reduction target, simplified monitoring, reporting and verification, as well as the removal of the requirement to hold a registry account, Decc said earlier this year.

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