The Vehicle Emissions Trading Schemes Order 2023

Part 2 Baseline for the VCTS

Interpretation and general

21.  In this Part—

(a) the period beginning with 1st January 2021 and ending with 31st December 2021 is referred to as “2021”;

(b) the period beginning with 1st January 2022 and ending with 31st December 2022 is referred to as “2022”;

(c) the period beginning with 1st January 2023 and ending with 31st December 2023 is referred to as “2023”;

(d) “adjusted specific emissions of CO₂”, in relation to a van, means the specific emissions of CO₂ of the van, reduced where applicable by the number of grams of CO₂ per kilometre specified in the certificate of conformity of that van as being due to any eco-innovation;

(e) “exempt manufacturer” means a manufacturer to which Article 4, points (b) and (c) of Article 7(4), Article 8 and points (a) and (c) of Article 9(1) of Regulation (EU) 2019/631 did not apply by virtue of Article 2(4) of that Regulation;

(f) “excess emissions premium” means a requirement to pay a specified amount where a manufacturer’s average specific emissions exceed its specific emissions target under Article 8 of Regulation (EU) 2019/631;

(g) “non-ZE van” means a van which has specific emissions of CO₂ greater than zero grams per kilometre;

(h) “pool” means a group of manufacturers which formed a pool for the purposes of meeting their obligations under Article 4 of Regulation (EU) 2019/631;

(i) “pool manager” means a manufacturer nominated as the manager of a pool in accordance with Article 6(2)(b) of Regulation (EU) 2019/631;

(j) “specific emissions target” has the same meaning as it had in Regulation (EU) 2019/631, as it stood immediately before the coming into force of this Order;

(k) “2021 individual NZE average emissions”, in relation to a manufacturer, means the average of the adjusted specific emissions of CO₂ of the non-ZE vans of which that manufacturer is the manufacturer and which were registered during 2021;

(l) “2021 individual specific emissions target” means the specific emissions target for a manufacturer for 2021;

(m) “2021 pool specific emissions target” means the specific emissions target to which the manufacturers in a pool were collectively subject, for the purposes of meeting their obligations under Article 4 of Regulation (EU) 2019/631 for 2021, in accordance with Article 6 of that Regulation;

(n) “2021 individual performance”, in relation to a manufacturer, means the average of the specific emissions of CO₂, as specified in the information published by the Secretary of State pursuant to Article 9(1)(b) of Regulation (EU) 2019/631, of the non-ZE vans of which the manufacturer was the manufacturer and which were registered during 2021;

(o) “2021 pool performance”, in relation to a pool, means the average of the specific emissions of CO₂, as specified in the information published by the Secretary of State pursuant to Article 9(1)(b) of Regulation (EU) 2019/631, of the non-ZE vans of which a member of the pool was the manufacturer and which were registered during 2021;

(p) “2021 individual excess”, in relation to a manufacturer, is calculated by applying the following formula—

where—

• “A” is the manufacturer’s 2021 individual performance; and

• “B” is the manufacturer’s 2021 individual specific emissions target;

(q) “2021 pool excess”, in relation to a pool, is calculated by applying the following formula—

where—

• “C” is the pool’s 2021 pool performance; and

• “D” is the pool’s 2021 pool specific emissions target.

22.  Paragraphs 25 to 39 apply for the purposes of calculating the baseline for a VCTS participant consisting of a manufacturer which is not a member of a pool VCTS participant.

23.  Paragraph 40 applies for the purposes of calculating the baseline for a VCTS participant which is a pool VCTS participant.

24.  A baseline which is calculated in accordance with this Part, if not a whole number, is calculated to three decimal places only.

Existing manufacturer which met 2021 target

25.  Paragraph 26 applies for the purpose of calculating the baseline for a VCTS participant—

(a) which had a 2021 individual specific emissions target; and

(b) in relation to which no excess emissions premium was imposed for 2021 on—

(i) the manufacturer; or

(ii) the pool manager for a pool of which the manufacturer was a member for 2021.

26.  Where this paragraph applies, the VCTS participant’s baseline is the higher of—

(a) the manufacturer’s 2021 individual NZE average emissions; or

(b) the manufacturer’s 2021 individual specific emissions target.

Exempt manufacturer for 2021

27.  The baseline for a VCTS participant which was an exempt manufacturer for 2021 is the manufacturer’s 2021 individual NZE average emissions.

Existing manufacturer which did not meet 2021 target

28.  Paragraph 29 applies for the purpose of calculating the baseline for a VCTS participant—

(a) which had a 2021 individual specific emissions target;

(b) which was not a member of a pool for 2021; and

(c) on which an excess emissions premium was imposed for 2021.

29.  Where this paragraph applies, the VCTS participant’s baseline is the number resulting from the application of the following formula—

where—

• “E” is the manufacturer’s 2021 individual NZE average emissions; and

• “F” is the manufacturer’s 2021 individual excess.

Existing manufacturer in non-compliant pool met individual 2021 target

30.  Paragraph 31 applies for the purpose of calculating the baseline for a VCTS participant which—

(a) had a 2021 individual specific emissions target;

(b) was a member of a pool for 2021 and—

(i) an excess emissions premium was imposed on the pool manager for that pool for 2021; but

(ii) the manufacturer met its individual 2021 specific emissions target.

31.  Where this paragraph applies, the VCTS participant’s baseline is the higher of—

(a) the manufacturer’s 2021 individual NZE average emissions; or

(b) the manufacturer’s 2021 individual specific emissions target.

Existing manufacturer in non-compliant pool did not meet individual 2021 target

32.  Paragraph 33 applies for the purpose of calculating the baseline for a VCTS participant where—

(a) the manufacturer had a 2021 individual specific emissions target;

(b) the manufacturer was a member of a pool for 2021;

(c) an excess emissions premium was imposed on the pool manager for that pool in relation to 2021; and

(d) the manufacturer did not meet its 2021 individual specific emissions target.

33.  Where this paragraph applies, the VCTS participant’s baseline is the number resulting from the application of the following formula—

where—

• “E” is the manufacturer’s 2021 individual NZE average emissions; and

• “H” is the 2021 pool excess for the pool of which the manufacturer was a member

New manufacturer in 2022

34.  Paragraph 35 applies for the purpose of calculating the baseline for a VCTS participant which—

(a) did not have a 2021 individual specific emissions target;

(b) was not an exempt manufacturer for 2021; and

(c) is the manufacturer of a non-ZE van which was registered during 2022.

35.  Where this paragraph applies, the VCTS participant’s baseline is the average of the adjusted specific emissions of CO₂ of the non-ZE vans of which that VCTS participant is the manufacturer and which were registered during 2022.

New manufacturer in 2023

36.  Paragraph 37 applies for the purpose of calculating the baseline for a VCTS participant which—

(a) did not have a 2021 individual specific emissions target;

(b) was not an exempt manufacturer for 2021;

(c) is not the manufacturer of a non-ZE van which was registered during 2022; and

(d) is the manufacturer of a non-ZE van which was registered during 2023.

37.  Where this paragraph applies, the VCTS participant’s baseline is the average of the adjusted specific emissions of CO₂ of the non-ZE vans of which that VCTS participant is the manufacturer and which were registered during 2023.

New manufacturer from 2024

38.  Paragraph 39 applies for the purpose of calculating the baseline for a VCTS participant which—

(a) did not have a 2021 individual specific emissions target;

(b) was not an exempt manufacturer for 2021;

(c) is not the manufacturer of a non-ZE van which was registered during 2022 or 2023; and

(d) becomes a VCTS participant, or a member of a pool VCTS participant, on or after the date on which this Order comes into force.

39.  Where this paragraph applies, the VCTS participant’s baseline is the average of the adjusted specific emissions of CO₂ of all the non-ZE vans registered during the calendar year preceding the scheme year in which the participant first becomes a VCTS participant, or a member of a group of manufacturers which is a pool VCTS participant.

Pool VCTS participant

40.—(1) The baseline for a VCTS participant which is a pool VCTS participant is calculated as follows.

• Step 1

  Calculate the baseline for each manufacturer which is a member of the pool VCTS participant in accordance with whichever of paragraphs 25 to 39 is applicable to each manufacturer.

• Step 2

  Multiply each baseline calculated in accordance with step 1—

  (a)

  by the number of non-ZE vans of which the manufacturer was the manufacturer and which were registered in 2021; or

  (b)

  where the manufacturer was not the manufacturer of a van which was registered in 2021, by the number of non-ZE vans of which the manufacturer is the manufacturer and which were registered during the calendar year in which the manufacturer first became a VCTS participant or a member of a pool VCTS participant.

• Step 3

  Add together the numbers resulting from step 2.

• Step 4

  Calculate the total number of non-ZE vans of which the manufacturers which are members of the pool VCTS participant are the manufacturer and which were registered—

  (a)

  during 2021; or

  (b)

  where the manufacturer was not the manufacturer of a van which was registered in 2021, during the calendar year in which the manufacturer first became a VCTS participant or a member of a pool VCTS participant.

• Step 5

  Divide the number resulting from step 3 by the number resulting from step 4.

(2) The pool VCTS participant’s baseline is the number resulting from step 5.