In this Schedule—

• “conversion notice” has the meaning given in paragraph 23;

• “emissions report” has the meaning given in paragraph 11(2)(b);

• “emissions target”, in relation to an installation, means a target for the installation’s reportable emissions (excluding emissions from biomass) set out in the installation’s hospital or small emitter permit; and an emissions target for a scheme year is the emissions target for that year set out in the permit;

• “hospital-qualifying installation” means—

  1. a

     in relation to an installation included in the hospital and small emitter list for 2021-2025, an installation stated in that list to be a “hospital” by the inclusion of “Y” in the entry relating to the installation in the column headed “Hospital (YES/NO)”;

  2. b

     in relation to an installation included in the hospital and small emitter list for 2026-2030, an installation that meets condition A (whether or not the installation also meets condition B or C) (see paragraphs 5 and 6);

  3. c

     in relation to an installation included in the ultra-small emitter list for 2021-2025 or the ultra-small emitter list for 2026-2030—

     1. i

        in respect of which a notice under paragraph 7(2) of Schedule 8 is given; and

     2. ii

        that is a hospital or small emitter for a scheme year by virtue of paragraph 4 of this Schedule,

     an installation that primarily provided services to a hospital in the scheme year before the notice was given;

• “maximum amount” means 24,999 tonnes of carbon dioxide equivalent.

For the purposes of this Order, in determining whether or not an installation’s reportable emissions or an estimate of reportable emissions exceed the maximum amount or an emissions target and in calculating an installation’s emissions target based on reportable emissions or an estimate, emissions from biomass must be excluded.

For the purposes of this Schedule, an installation is an installation that primarily provides services to a hospital in a scheme year if at least 85% of the heat produced by the installation in that year is used by or supplied to one or more hospitals.

In sub-paragraph (2), “illness” includes any disorder or disability of the mind and any injury or disability requiring medical or dental treatment or nursing.

This paragraph and paragraph 4 apply to determine whether or not an installation is a hospital or small emitter for a scheme year.

Subject to sub-paragraphs (3) and (4), an installation is a hospital or small emitter for the scheme years in the 2021-2025 allocation period if the installation is included in the list (the “hospital and small emitter list for 2021-2025”) of installations to be excluded from the EU ETS under Article 27 of the Directive from 1st January 2021 published for the purposes of the EU ETS on the website of SEPA on 28th May 202063.

Where a conversion notice is given to the operator of the installation stating that the installation is not a hospital or small emitter for a scheme year in the 2021-2025 allocation period, the installation is not a hospital or small emitter for that scheme year or subsequent scheme years in the allocation period.

Subject to sub-paragraphs (6) and (7), an installation is a hospital or small emitter for the scheme years in the 2026-2030 allocation period if the installation is included in the hospital and small emitter list for 2026-2030.

Where a conversion notice is given to the operator of the installation stating that the installation is not a hospital or small emitter for a scheme year in the 2026-2030 allocation period, the installation is not a hospital or small emitter for that scheme year or subsequent scheme years in the allocation period.

Subject to paragraph 3(3), an installation to which this paragraph applies by virtue of sub-paragraph (1)(a)(i) is a hospital or small emitter for the relevant scheme year and for subsequent scheme years in the 2021-2025 allocation period.

Subject to paragraph 3(6), an installation to which this paragraph applies by virtue of sub-paragraph (1)(a)(ii) is a hospital or small emitter for the relevant scheme year and for subsequent scheme years in the 2026-2030 allocation period.

The UK ETS authority must publish the hospital and small emitter list for 2026-2030 on or before 30th April 2025.

An application may not be made under this paragraph and paragraph 3 of Schedule 8.

This paragraph applies for the purposes of paragraph 5.

The operator of an installation that is a hospital or small emitter for a scheme year may apply to the regulator for a hospital or small emitter permit to come into force in that year64.

But an application may not be made if a permit for the installation is already in force.

In sub-paragraph (2), “permit” includes a permit within the meaning of GGETSR 2012 to which paragraph 1 of Schedule 11 applies (permits to be converted).

This paragraph applies where a greenhouse gas emissions permit is in force for an installation that is included in the hospital and small emitter list for 2026-2030.

The regulator must convert the greenhouse gas emissions permit into a hospital or small emitter permit with effect from 1st January 2026 by varying it under paragraph 6 of Schedule 6, so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 11.

When varying a permit under sub-paragraph (2), the regulator may make only such variations as the regulator considers necessary in consequence of the installation’s inclusion in the hospital and small emitter list for 2026-2030.

The conversion of the permit does not affect the obligations of the operator under the greenhouse gas emissions permit in respect of specified emissions before 1st January 2026.

A hospital or small emitter permit for an installation that is not a hospital-qualifying installation must contain a condition requiring the operator, if the installation’s reportable emissions in a scheme year for which the installation is a hospital or small emitter exceed the maximum amount, to give notice to the regulator on or before 31st March in the following year.

This paragraph is subject to paragraph 14.

The operator of the installation must comply with the conditions of the permit.

Where an installation is a hospital or small emitter for a scheme year, the Monitoring and Reporting Regulation 2018 has effect with the following modifications (in addition to the modifications in Schedule 4).

References in the Monitoring and Reporting Regulation 2018 to a greenhouse gas emissions permit are to be read as references to a hospital or small emitter permit.

This paragraph applies where a hospital or small emitter permit for an installation referred to in paragraph 4(2) or (3) comes into force on a day after 1st January in the relevant scheme year.

References in paragraph 11(2) to a scheme year for which the installation is a hospital or small emitter must be treated as not including a reference to the part of the relevant scheme year before the date on which the permit comes into force.

The installation’s emissions target for the relevant scheme year is the emissions target calculated under paragraph 16 or, as the case may be, 17 multiplied by the factor set out in sub-paragraph (4).

The factor is (Y – D)/Y, where—

• Y is the number of days in the relevant scheme year;

• D is the number of days in the relevant scheme year before the date on which the permit comes into force.

Paragraph 19 has effect as if the reference to the installation’s reportable emissions in the relevant scheme year were a reference to the installation’s reportable emissions in the relevant scheme year on and after the date on which the permit comes into force.

In this paragraph, “relevant scheme year” has the meaning given in paragraph 4(1)(b).

Except in the case of a hospital-qualifying installation, an emissions target for a scheme year may not exceed the maximum amount.

This paragraph overrides paragraphs 16 and 17.

This paragraph applies for the purpose of calculating an installation’s emissions targets for the scheme years in the 2021-2025 allocation period under paragraph 11(1)(f)(i) and (iii).

Where a regulated activity began to be carried out at the installation before 2019, the installation’s emissions target for a scheme year is the installation’s relevant emissions multiplied by the reduction factor for the scheme year.

In sub-paragraphs (4) and (5), “2021 estimate” means the conservative estimate of annual average emissions referred to in Article 19(4) of the Monitoring and Reporting Regulation 2012 used for the purposes of a monitoring plan submitted under that Regulation and contained in the application for a permit under GGETSR 2012 (see paragraph 1(1)(f) of Schedule 4 to GGETSR 2012).

For the purpose of this paragraph, the reduction factor for a scheme year set out in column 1 of table D is the value set out in the corresponding entry in column 2.

This paragraph is subject to paragraph 14.

Where a regulated activity begins to be carried out at the installation before 2024, the installation’s emissions target for a scheme year is the installation’s relevant emissions multiplied by the reduction factor for the scheme year.

For the purpose of this paragraph, the reduction factor for a scheme year set out in column 1 of table E is the value set out in the corresponding entry in column 2.

This paragraph is subject to paragraph 14.

Paragraph 11(1)(f)(i) and (ii) do not require the installation’s hospital or small emitter permit to contain emissions targets for scheme years (the “relevant scheme years”) for which, at the date of issue of the permit, the information required to calculate the emission targets is not available.

As soon as reasonably practicable after the information to calculate the installation’s emissions targets for the relevant scheme years becomes available, the regulator must vary the installation’s hospital or small emitter permit under paragraph 6 of Schedule 6 by adding the emissions targets.

But sub-paragraph (3) does not apply if the regulator has given a conversion notice to the operator of the installation, the effect of which is that the installation will not be a hospital or small emitter for the relevant scheme years.

The operator of an installation must ensure that the installation’s reportable emissions in a scheme year for which the installation is a hospital or small emitter do not exceed the emissions target for that year.

This paragraph is subject to paragraph 14.

In this paragraph, an installation’s “bankable amount”, in relation to a scheme year, means ET – RE, where—

• ET is the installation’s emissions target for that year;

• RE is the reportable emissions stated in the installation’s emissions report for that year.

Except where the installation is a hospital-qualifying installation, if increasing the emissions target for the next scheme year would result in an emissions target that exceeds the maximum amount, the emissions target must be increased by such amount as results in an emissions target of the maximum amount.

But sub-paragraph (2) does not apply if the regulator has given a conversion notice to the operator of the installation (the effect of which is that the installation will not be a hospital or small emitter for the scheme years in the 2026-2030 allocation period).

This paragraph applies where the amount of an installation’s reportable emissions used to calculate the installation’s emission targets (including revised emissions targets under paragraph 20) for scheme years in an allocation period is amended following a determination of emissions under article 45.

The regulator may calculate revised emissions targets for the current and future scheme years in the allocation period and, if the regulator does so, the regulator must vary the installation’s hospital or small emitter permit under paragraph 6 of Schedule 6 to include those emissions targets.

In calculating revised emissions targets under sub-paragraph (2), the regulator may take account of what revised emissions targets for past scheme years in the allocation period calculated under this paragraph might have been if the determination had been made earlier (but may not calculate revised emissions targets for past years).

Where the regulator considers that a hospital-qualifying installation ceases to be an installation that primarily provides services to a hospital in a scheme year (the “relevant scheme year”) for which the installation is a hospital or small emitter, the regulator must, as soon as reasonably practicable, give a notice (a “conversion notice”) to the operator of the installation.

Where a hospital or small emitter permit may be revoked under paragraph 12 of Schedule 6, the regulator may instead of revoking the permit give a notice (a “conversion notice”) to the operator of the installation.

Where a conversion notice is given, the regulator must convert, with effect from the date of conversion, the installation’s hospital or small emitter permit (if any) into a greenhouse gas emissions permit by varying it under paragraph 6 of Schedule 6 so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 4 of Schedule 6.

But if the regulator considers that the operator will not be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of a greenhouse gas emissions permit, the regulator must revoke the permit under paragraph 12 of Schedule 6 instead of converting it.

When varying a permit, the regulator may make only such variations as the regulator considers necessary in consequence of the installation ceasing to be a hospital or small emitter.

The conversion of the permit does not affect the obligations of the operator under the permit in respect of specified emissions before the date of conversion.

The regulator must, as soon as reasonably practicable, inform the UK ETS authority about each installation in respect of which a conversion notice is given.

The UK ETS authority must, from time to time, publish the information referred to in sub-paragraph (1).

Where a notice under sub-paragraph (1) is given, the regulator must convert, with effect from 1st January 2026, the installation’s hospital or small emitter permit (if any) into a greenhouse gas emissions permit by varying it under paragraph 6 of Schedule 6 so that the provisions of the permit are replaced by provisions that satisfy the requirements of paragraph 4 of Schedule 6.

But if, after the date referred to in paragraph (1)(b), the regulator considers that the operator will not be capable of monitoring and reporting the installation’s reportable emissions in accordance with the monitoring and reporting conditions of a greenhouse gas emissions permit, the regulator must revoke the permit under paragraph 12 of Schedule 6 instead of converting it.

When varying a permit, the regulator may make only such variations as the regulator considers necessary in consequence of the installation ceasing to be a hospital or small emitter.

The conversion of the permit does not affect the obligations of the operator under the permit in respect of specified emissions before 1st January 2026.