The UK is taking views on whether to update its rules that exempt smaller emitters from being regulated in the EU ETS.

The consultation, which runs until Aug 28, is to help it decide whether to introduce rules for allocating free EUAs to installations that had already opted out but must return because their emissions have exceeded exemption limits.

The government also seeking views on whether to clarify existing rules for when an ETS installation is judged to have permanently closed rather than temporarily. Mothballed plants are still entitled to receive free EUAs.

In 2013, the UK introduced a law to allow ETS installations with emissions below 25,000 tonnes of CO2e a year and hospitals to be exempt if they made equivalent abatement commitments.

The EU Commission’s post-2020 ETS reform proposal included provisions for member states to continue to exempt small emitters with high EU ETS administration costs if they make equivalent contributions to cut emissions, and to add more SMEs to that list from 2021.

By Ben Garside – ben@carbon-pulse.com