The Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024

Article 44A inserted

15.  After article 44 insert—

“Deficit notices

44A.— (1) This article applies where—

(a) the operator of an installation fails to surrender allowances equal to the installation’s reportable emissions in a scheme year (the “relevant scheme year”), contrary to—

(i) article 27;

(ii) the requirements of a surrender notice under paragraph 11 of Schedule 6 (see paragraph 11(4)(b)(iii));

(iii) the requirements of a revocation notice under paragraph 12 of that Schedule (see paragraph 12(5)(b)(iii));

(b) a person who is an aircraft operator in relation to a scheme year (the “relevant scheme year”) fails to surrender allowances equal to the person’s aviation emissions in that year, contrary to article 34.

(2) The regulator may give a notice (a “deficit notice”) to the operator of the installation or to the person.

(3) The deficit notice must set out—

(a) the relevant scheme year and the installation’s reportable emissions, or the person’s aviation emissions, in that year;

(b) the number of allowances (if any) surrendered in compliance with article 27, the requirements of a surrender or revocation notice or article 34 (including any surrendered after the date by which allowances were required to be surrendered);

(c) the number of allowances representing the difference (the “deficit”) between allowances equal to the installation’s reportable emissions, or the person’s aviation emissions, in the relevant scheme year and the number referred to in sub-paragraph (b);

(d) the date (the “deficit surrender date”) on or before which the person to whom the notice is given must surrender allowances equal to the deficit;

(e) information about rights of appeal.

(4) The person to whom a deficit notice is given must surrender allowances equal to the deficit on or before the deficit surrender date.

(5) The regulator may withdraw a deficit notice at any time by giving notice of the withdrawal to the person to whom the deficit notice is given.

(6) A deficit notice may be given in respect of a failure to surrender allowances that arises before as well as after this article comes into force.

(7) In the case of a transfer of a permit under paragraph 9 of Schedule 6 (other than a partial transfer)—

(a) after the transfer date, a deficit notice may be given to the new operator only, including in respect of a failure to surrender allowances arising before the transfer date;

(b) where a deficit notice in respect of a failure to surrender allowances is given to the transferring operator before the transfer date and has not been complied with, a new deficit notice may be given to the new operator in respect of the same failure provided that the original notice is first withdrawn.

(8) A deficit notice may not be given—

(a) to the operator of an installation, if the operator holding account for the installation has been closed under paragraph 27 of Schedule 5A;

(b) to a person who is an aircraft operator in relation to a scheme year, if the person’s aircraft operator holding account has been closed under paragraph 28 of that Schedule;

(c) in respect of allowances which a transferring operator failed to surrender in a scheme year as a result of an error of the kind referred to in paragraph 10(1) of Schedule 6 (transfer of permits: underreporting discovered after transfer).

(9) In this article—

“new operator” and “transferring operator” have the meanings given in paragraph 7(1) of Schedule 6;

“transfer date” has the meaning given in paragraph 9(6) of that Schedule.”.