The Department for Energy Security and Net Zero (DESNZ) has published the UK ETS Authority’s confirmation that it will make changes to free allocation rules to ensure participants who permanently cease their operations can’t benefit from surplus free allowances in their final year.
It sets out responses to Technical Changes One and Two from the 2023 consultation, confirming changes to free allocation rules to ensure participants who permanently cease their operations do not receive excess free allocation in their final year.
The new rules will ensure that the free allocation received in a participant’s final year of operation is proportionate to their activity levels. The changes include an exemption for sites which are ceasing activity to decarbonise. This will support the UK ETS’s objective of incentivising a move to more carbon efficient production across the UK’s industrial sectors.
Source: DESNZ.