London installations removed from EUETS

6 December 2012: Ahead of the start of Phase III of the EU Emissions Trading Scheme (EUETS), which starts on 1 January 2013, DECC has today introduced new legislation which looks to simplify the rules around the CO2 ‘cap and trade’ scheme.

The EUETS covers around 1,100 energy-intensive industrial installations in the UK such as power stations, refineries and large manufacturing plants. Not surprisingly, not many of these participants are located at London, however, there are a few at the very lowest end of the EUETS requirements, and it is these sites which are addressed in the changes made today. DECC’s press release states that these ‘small emitters’, many of which are hospitals, have been given the opportunity to “‘opt-out’ of the EU ETS from 2013 into a lighter touch alternative scheme, which will address the disproportionately higher administrative costs faced by these installations.”

The ‘opt out’ list includes the following schemes in London:

Other sites include the Hammersmith Hospital Energy Centre and the University College London Hospital.

Common to many of these installations is that they had chosen to utilise Combined Heat and Power (CHP) systems to provide greater energy resilience on site, access more affordable heat and power, and reduce the site’s overall environmental impact related to energy consumption. However, by choosing to install more energy efficient generation directly on site, rather than importing electricity from the grid, they also passed the threshold on energy consumption for inclusion under the EUETS rules (20MW thermal input). This brought these relatively modest generation sites under the complex EUETS rules, hence, this new action by Government to simplify the rules under their operation under the trading scheme is to be welcomed.

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