Details of the System

In accordance with the European Union (EU) Monitoring and Reporting Guidelines, all operators of installations that have received a Greenhouse Gas Emissions Trading System permit, are required, as a permit condition, to submit a monitoring and reporting plan.
This plan specifies how the operator will meet the requirements of the EU Guidelines, and MUST be implemented from the 1 January 2005.

At the end of each year the operator must submit to the Chief Inspector a verified emissions report no later than the 31 March. The operator must then surrender allowances equal to that in the emissions report by 30 April, or face financial penalties of €40 per Ton of Carbon Dioxide.
Installations who wish to exceed their emissions allocation can buy allowances from others willing to sell.

An incentive is offered to installations that can reduce their Carbon Dioxide emissions, as they will be able to sell any surplus allowance to other installations. This should result in emissions reductions in the most cost effective manner throughout the EU.

For further details of the EU Emissions Trading System (EU ETS) visit the Department of Energy and Climate Change (DECC)

1. Our regulations require you to pay a civil penalty if you do not surrender sufficient allowances to cover your reportable emissions by 30 April each year.
   
2. The penalty is set by the EU Emissions Trading Scheme Directive, which has been implemented across every Member State in the European Union.
   
3. We do not have discretion over whether or not to impose the civil penalty.
   
4. The civil penalty is currently set at €100 for every tonne of carbon dioxide for which you fail to surrender allowances, i.e. the amount, in tonnes of carbon dioxide equivalent, by which your annual reportable emissions exceeded the number of allowances you surrendered, multiplied by €100.
   
5. We will apply a civil penalty for failure to surrender sufficient allowances by 30 April each year to cover your annual reportable emissions made in the previous year.
   
6. This includes situations where you are found to have under-stated your reportable emissions for any reason whatsoever and you did not surrender sufficient allowances to cover the under-statement by the relevant 30 April deadline.
   
7. We will also apply a civil penalty for failure to surrender sufficient allowances in accordance with the requirement in any Surrender or Revocation Notice.

For more information, please read Guidance on civil penalties (.PDF 12kb).