The annual ETS emissions compliance deadlines are the end of March (verification) and the end of April (surrender) for both the EU and the UK. For UK emitters, 2022 marks the first compliance surrender in the newly-formed UK ETS.
Do
- Make sure you can access your registry account. Every year companies subject to ETS compliance are caught out by registry access issues. The registry access procedures have changed and adding new users to an account can be a time-consuming exercise. For UK installations, it is important you have completed the account opening process. UK emitters had accounts created for them automatically, however, documents need to be submitted to ensure access to those accounts in order that you can comply.
- Have a plan to purchase your carbon allowance shortfall. Those who left it late last year ended up paying the highest carbon prices and a repeat is possible this year (for EUAs and UKAs). The last delivery date possible is 29th April but we would advise you to have your purchase complete well ahead of this date.
- Beware of a possible squeeze on UKA prices. With limited supply and plenty of pent-up demand, spot carbon allowances may be in short supply.
- Complete the required market access setup. Increasing regulatory requirements and the nascent UK ETS mean a refresh of essential paperwork may be required in order to trade. In addition, a new currency setup may be required for UKAs.
- Add accounts to your trusted list to ensure any internal movement of allowances is possible.
Don’t
- Borrow from 2022 free ETS allocation without a clear understanding of the risks and a plan to cover the shortfall.
- Leave everything until the last minute. This will cause unnecessary stress. Verifiers, the registry system and the national administrators will all be under pressure as we approach the deadlines.
- Forget about your ongoing exposure after the surrender deadline. Make a plan for next year. Prices are rising and free allocations are falling.
- Rely on offsets to reduce your compliance costs. Offsets are no longer eligible for compliance and the cost savings achieved in previous years are no longer available.
