UK Emissions Trading Scheme: Business and Regulations Impact Assessment (BRIA)
This Business and Regulatory Impact Assessment (BRIA) covers the potential impacts on Scottish businesses due to upcoming changes to the UK Emissions Trading Scheme (ETS).
Footnotes
1. Developing the UK Emissions Trading Scheme (UK ETS) Consultation (2022) and associated documents.
2. Main Response and associated impact assessment to the Developing the UK ETS Consultation.
3. Traded sector refers to those sectors already covered by the UK ETS, which include energy-intensive industry (including manufacturing, upstream and downstream oil and gas, construction and steel), non-renewable power sector and some aviation.
4. The UK ETS currently includes domestic flights within the UK, flights between the UK and the European Economic Area and those between Great Britain and Switzerland.
5. Scottish Greenhouse Gas Statistics 2021.
6. For further details on how the UK ETS incentivises decarbonisation, see the analytical annex to the consultation.
7. CSCF is a process by which a reduction in all free allocations is applied and occurs when the total amount of required free allocation is greater than allowances in the industry cap, and no additional allowances are available.
8. Climate Change Committee (2022) Letter: Development of the UK Emissions Trading Scheme (UK ETS). Letter from Lord Deben, Chair of the Climate Change Committee, to Graham Stuart MP, Minister of State at the Department for Business, Energy and Industrial Strategy, copying in the portfolio Ministers of the devolved administrations.
9. The methodology for free allocations for aviation is different from those of stationary instillations and is therefore considered separately.
10. Climate Change (Scotland) Act 2009
11. Climate Change (Emissions Reduction Targets) (Scotland) Act 2019
12. Scottish Government: National Performance Framework
13. This was defined as those who operate in Scotland or who are key to Scottish supply chains.
14. Climate Change Committee (2021) Letter: UK Emissions Trading Scheme and CORSIA Letter from Lord Deben, Chair of the Climate Change Committee, to Anne-Marie Trevelyan MP, Minister of State at the Department for Business, Energy and Industrial Strategy, copying in the portfolio Ministers of the devolved administrations.
15. Hospital and Small Emitter (HSE) Opt-out scheme accounts for around a quarter of sites in Scotland that are participating in the UK ETS but only accounted for 4% (0.3 MtCO2e) of total emissions for Scottish sites in the UK ETS in 2021. These installations are given an allocation of emissions which are included towards the overall cap, but they are not able to participate in the purchasing of additional allowances. These have been excluded from our analysis
16. Data is presented for each country based on their regulator, for static installations the emissions will occur in the region that it is located. The exception is for aviation where emissions are reported to the regulator where the airline is registered rather than where the emissions occur.
18. Carbon leakage refers to the movement of production and associated emissions from one country to another due to different levels of decarbonisation effort through carbon pricing and climate regulation. As a result of carbon leakage, the objective of decarbonisation efforts – to reduce global emissions – would be undermined.
19. ISBN/9781835214169">Island Communities Impact Assessment - UK Emissions Trading Scheme
21. UK Health Expert Advisory Group (2020), Sustainable Health Equity: Achieving a Net Zero UK
22. This is based on an average price of £52 from the primary auctions as reported on the ICE website.
23. Data from the electricity generation section of the Scottish Energy Statistics Hub.
24. ISBN/9781835214169">Island Communities Impact Assessment - UK Emissions Trading Scheme
Contact
Email: emissions.trading@gov.scot
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