The Vehicle Emissions Trading Schemes Order 2023

Chapter 4 The Non-Zero-Emission Van CO₂ Trading Scheme (VCTS)

Activity to which the VCTS applies and unit of measurement of activity

63.—(1) The activity to which the VCTS applies is the registration of an NZE van during the trading period.

(2) The unit of measurement of that activity is each gram of CO₂ per kilometre emitted by such a van.

Participants in the VCTS

64.—(1) Subject to paragraph (2), the manufacturer of more than 999 NZE vans which are registered during a scheme year is a VCTS participant for that year.

(2) Where two or more manufacturers are collectively the manufacturers of more than 999 NZE vans which are registered during a scheme year, those manufacturers are a pool VCTS participant for that scheme year if the administrator has granted an application made by those manufacturers under Schedule 5 (application by two or more manufacturers to be a pool participant in the Trading Schemes) for that scheme year which relates to the VCTS.

(3) Where there is any doubt as to the identification of the manufacturer of a van in accordance with paragraphs (a) to (e) of the definition of “manufacturer” in article 3(1), the administrator may identify the VCTS participant in relation to the registration of that van.

VCTS allowances

65.  A VCTS allowance is an allowance for an NZE van which is registered during a scheme year to emit one gram of CO₂ per kilometre.

Allocation of VCTS allowances

66.—(1) Subject to paragraph (2), the administrator must allocate to each VCTS participant for each scheme year a number of VCTS allowances which is equal to N multiplied by B, where—

(a) N is the number of NZE vans of which the participant is the manufacturer and which are registered during that scheme year; and

(b) B is that participant’s baseline.

(2) Where the number of VCTS allowances which results from the application of the formula in paragraph (1) is not a whole number, the number is to be rounded to the nearest whole number.

Conversion of unused VRTS allowances into VCTS allowances

67.—(1) A VCTS participant may acquire 206 VCTS allowances in exchange for one unused VRTS allowance by making a request to the administrator if—

(a) the participant’s number of units of activity in the VRTS in a scheme year, measured in accordance with article 56, does not exceed the number of VRTS allowances which were allocated to it in accordance with article 45 for that year;

(b) the participant has more VRTS allowances than it requires (referred to in this article as “unused VRTS allowances”) in order to comply with article 59 (accounting for activity in the VRTS) for that scheme year; and

(c) the participant did not acquire the unused VRTS allowances by means of borrowing under article 47.

(2) A request under paragraph (1)—

(a) must be made during the trading window following the scheme year for which the VCTS participant intends to surrender the VCTS allowances to which the request relates; and

(b) must relate to a whole number of VRTS allowances.

(3) If a VCTS participant makes a request in accordance with paragraph (1), the administrator must update the registry accordingly.

Measuring activity in the VCTS

68.—(1) The number of units of activity that must be accounted for by a VCTS participant for a scheme year is the sum of the number of grams of CO₂ per kilometre emitted by each NZE van of which the participant is the manufacturer and which is registered during the scheme year.

(2) For the purposes of this article, the number of grams of CO₂ per kilometre emitted by an NZE van is the number specified in that van’s specific emissions of CO₂, with that number having been, where applicable—

(a) reduced in accordance with paragraph (3); or

(b) corrected in accordance with Article 13(3) of Regulation (EU) 2019/631 (lack of correspondence of CO₂ emission and fuel consumption values).

(3) An NZE van’s specific emissions of CO₂ are reduced by the number of grams of CO₂ per kilometre specified in the van’s certificate of conformity as CO₂ savings achieved by any eco-innovation, unless—

(a) the Secretary of State has given a notice to the administrator in accordance with Article 12(2)(b) of Regulation (EU) 427/2014(1) which relates to the eco-innovation; and

(b) the notice was given during the scheme year which immediately preceded the scheme year for which a VCTS participant’s number of units of activity in the VCTS is measured.

(4) A VCTS participant’s number of units of activity during a scheme year, if not a whole number, is calculated to three decimal places only.

Trading VCTS allowances

69.—(1) During a trading window, a VCTS participant may trade any VCTS allowances with another VCTS participant.

(2) A VCTS participant must trade whole numbers of VCTS allowances.

(3) Each VCTS participant which is a party to a trade must, before the end of the trading window, notify the administrator and each notification must include—

(a) the name and account number in the registry of the VCTS participant which is the transferor;

(b) the name and account number in the registry of the VCTS participant which is the transferee;

(c) the number of VCTS allowances traded; and

(d) the price paid for those VCTS allowances.

(4) A VCTS participant which trades a VCTS allowance in accordance with this article must inform the other party to the trade of their account number in the registry.

(5) Where a VCTS participant is a pool VCTS participant, a reference in this article to a VCTS participant’s account number is a reference to the account number of the manufacturer identified to the administrator in accordance with—

(a) paragraph 5(c)(i) of Schedule 5 (application to be treated as a pool participant) in the application made under that Schedule; or

(b) article 83(1) (updating information provided with application under Schedule 5).

(6) Where a trade is notified in accordance with paragraph (3), the administrator must update the registry and notify the parties to the trade accordingly.

(7) Unless the administrator is satisfied that notification of a trade has been given in accordance with this article, the trade is treated as not having taken place.

Accounting for activity in the VCTS

70.—(1) For each scheme year, and no later than 31st December of the year following a scheme year, a VCTS participant must account for each unit of its activity during the scheme year, measured in accordance with article 68, by surrendering a VCTS allowance.

(2) The administrator must update the registry to record the surrender of VCTS allowances.

Payments: VCTS

71.—(1) Where a VCTS participant has insufficient VCTS allowances to account for its activity during a scheme year in accordance with article 70, it must make a payment to the administrator in accordance with this article.

(2) The payment amount is £86 for each unit of a VCTS participant’s activity during a scheme year, measured in accordance with article 68, which the participant does not account for by surrendering a VCTS allowance to the administrator on or before 31st December of the year following that scheme year.

(3) Where the payment amount referred to in paragraph (2) is not a whole number of pence, the amount is to be rounded to the nearest whole number of pence.

(4) The administrator must give a VCTS participant notice of a requirement to make a payment in accordance with this article (referred to in this article as a “payment notice”).

(5) A payment notice must be in writing and must set out—

(a) the amount of the payment and how the amount is calculated;

(b) the date by which payment must be made, which must not be less than 30 days after the date on which the notice is given;

(c) that payment must be made to the administrator;

(d) how payment must be made; and

(e) information about rights of appeal.

(6) A VCTS participant which receives a payment notice under this article must make the payment in accordance with the notice.

(7) The administrator must pay any payment received under this article into the consolidated fund.

Expiry of VCTS allowances

72.  The administrator must record in the registry the expiry of a VCTS allowance, including a VCTS allowance which has been traded in accordance with article 69, which is—

(a) surrendered by a VCTS participant;

(b) not surrendered in accordance with article 70 for the scheme year for which it was allocated under article 66 or for which it was acquired under article 67 (conversion of unused VRTS allowances into VCTS allowances); or

(c) converted into VRTS credits in accordance with article 55.

(1)

Article 12(2)(b) is inserted by article 112(3) of this Order.