Small Emitter and Hospital Opt-out Scheme

The government has now launched the UK’s Small Emitter and Hospital Opt-out Scheme which will allow eligible installations to be excluded from the EU ETS for Phase III (2013-2020). The application period for the scheme has now closed.

The Opt-out Scheme has been designed in consultation with relevant stakeholders and aims to offer a simple alternative to the EU ETS which reduces the regulatory burden on opted out small emitters whilst maintaining incentives for emission reductions. We estimate that the scheme will offer savings to industry of up to £80 million over the period, depending on take up.

The Opt-out Scheme offers deregulatory savings through:

  • Replacement of requirement to surrender allowances with an emission reduction target
  • Simplified monitoring, reporting and verification requirements, including removal of requirement for third party verification
  • No requirement to hold a registry account
  • Less burdensome rules for target adjustment following an increase in installation capacity

Further details on the scheme are contained in the following documents:


Draft historic emissions targets in Appendix I of the Opt-out policy paper, above, were amended on 18 June 2012. This was to ensure the basis for those targets is completely consistent with the methodology agreed with the Commission (as set out in paragraphs 4.8-4.10 of the paper). This has resulted in a marginal reduction in installation targets for 2014 to 2020 – the change by 2020 amounts to a further reduction in targets of approximately 0.6%.

Application process

The application period for the Opt-out Scheme ran from 23 May to 18 July 2012.

244 applications were received from operators wishing to be excluded from the EU ETS and participate in the UK’s Small Emitter and Hospital Opt-out Scheme instead. Government has submitted the final list of installations to the European Commission for approval to be excluded, as required by the EU ETS Directive.

Operators will be notified once the Commission makes its decision.

Operators who applied to opt out should continue to prepare for the beginning of Phase III as normal, including by providing information to the regulator on request so that an up to date permit can be issued for the installation for Phase III.

Small emitters workshop 12 June 2012

An informal workshop was held on 12 June 2012 to assist operators in considering the Small Emitter and Hospital Opt-Out scheme.

The document below contains the following presentations from the workshop:

  1. DECC: Policy Overview, Application Process and Targets
  2. Steve Reeson, Food and Drink Federation: Overview of issues to consider when deciding whether to opt out
  3. Martyn Kenny, Tarmac: Considering the opt out, some example installations.
  4. Environment Agency: Monitoring Reporting and Auditing
Small emitters workshop presentations: 12 June 2012 Size: [703 KB] File Type: [.pdf]



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