At 6pm on Friday the 31st January in line with the Withdrawal Agreement the UK government confirmed the continued participation in the European Union Emissions Trading Scheme for the 2019 and 2020 period.
UK operators will continue to be able to access their accounts in the Union Registry for the purpose of 2020 compliance in the normal way for surrender on 30th April 2021. As the UK will remain in the EU ETS for 2019 and 2020 the no deal Carbon Emissions Tax (CET) will not commence.
From Monday the 3rd February the UK started the process of issuing 2019 free allocation of EUA allowances. In accordance with EU regulations, UK participants entitled to 2020 free allocation can expect to receive these allowances before the 28th February.
The statement has confirmed Redshaw Advisors’ advice relating to 2019’s delayed UK auctions and free allocation, that were held up by Brexit:
- UK installations will have to comply with the EU ETS for both 2019 and 2020 emissions as part of the Withdrawal Agreement Bill.
- The 2019 free allocation will be distributed to UK installations imminently and the 2020 free allocation will follow in the usual timeframe (end of February).
- The suspension on the CER/EUA exchange will be lifted from Monday.
- Verification and surrender deadlines will remain as 31st March and 30th April in each of the respective years.
The statement also set the date for the first UK EUA auction in more than 12 months. It will take place on 4th March and the auction calendar, to be released soon, will feature both 2019 and 2020 allowances spread over 2020.
Please contact us if you need any further clarification.