The Greenhouse Gas Emissions Trading Scheme Order 2020

This order established a new UK emissions trading regime as the successor to the EU Emissions Trading Scheme following the UK's Withdrawal from the European Union. The scheme applies to greenhouse gas emissions from power and heat generations, energy intensive industries, and aviation.

The order provides details on the rules governing the issuance and surrender of "allowances" equivalent to emissions falling within the scope of the sceheme. A number of derogations from the general rules are created for hospitals and small and ultra-small emitters. A modified version of the EU Monitoring, Reporting and Verification scheme is also mandated under the legislation.

The order also describes the different agencies responsible for the regulation of the scheme across the UK and provides for enforcement of the scheme and sets out the penalty regime for non-compliance.

The first UKA auction took place in May 2021.