The Carbon Accounting (Provision for 2019) Regulations 2021

Overview

These Regulations update the carbon accounting system which is used to monitor compliance with the targets for reducing greenhouse gas emissions, and provide a mechanism to account for credits and debits as a result of the operation of the EU ETS during the second year (2019) of the third carbon budget period. They are an important part of the system set up by the Climate Change Act 2008 for limiting greenhouse gas emissions. Under the 2008 Act, there is a 2050 target for reducing emissions and the Government sets limits on emissions for successive five-year periods (also known as carbon budgets). These provisions work by reference to the “net UK carbon account”, and the amount of the net UK carbon account depends in part on carbon accounting regulations detailed below.

In short, the Regulations provide the accounting system for the second year (2019) of the third carbon budget period (2018-2022) by:

• providing a mechanism to account for credits and debits to the net UK carbon account as a result of the operation of the EU ETS other than in respect of aviation during 2019;
• providing a mechanism to account for domestic aviation (flights between UK airports) during 2019, which is included in the EU ETS; and
• requiring the Secretary of State, at the end of the third carbon budget period, to cancel any carbon units bought on international markets or otherwise acquired by the Secretary of State in respect of 2019 to help meet the third carbon budget (this is extremely unlikely to be needed but section 27(4) requires the Regulations to ensure that carbon units held by the Secretary of State for this purpose are put beyond use).