Hansard

Good morning. I am pleased to give evidence to support the draft affirmative instrument to amend the Greenhouse Gas Emissions Trading Scheme Order 2020. The UK emissions trading scheme is a key policy for meeting Scotland’s ambitious emissions targets. The scheme is a cap and trade system that is designed to limit overall emissions in the covered sectors and incentivise cost-effective decarbonisation. When the scheme was established in January 2021, the legislation dealt exclusively with issues essential to its initiation and continued operation. At the time, ministers from the four Governments agreed to defer implementing some technical and operational aspects that were not immediately essential, with the intention of adding further provisions during the first year of operation. That is the purpose of the affirmative instrument and the negative instrument, which were laid simultaneously in Parliament. To be clear, the provisions in the affirmative instrument are designed to support the continued smooth operation of the UK ETS and to deliver the existing policy intentions rather than to fundamentally change the way in which it functions or applies in Scotland. In broad terms, the instrument aims to clarify the powers of enforcement that are granted to the regulators—the Scottish Environment Protection Agency, in Scotland’s case—and some of the enforcement actions that are available to them. It also extends enforcement powers to the registry administrator—that is, the Environment Agency. The instrument makes it an offence to intentionally obstruct a regulator in exercising powers of entry; prevents double counting of excess emissions penalties that apply for some operators; and gives the regulator powers to impose civil penalties on operators that fail to return allowances to which they are not entitled. Finally, although I am unable to go into specifics today, given the on-going discussions with the other Administrations, I am confident that, in the coming months, we will be in a position to publish a joint consultation to explore further policy reforms to the UK ETS as well as the common framework agreement. At that point, I would be more than happy to return to the committee, should it wish me to, in order to discuss the matter in greater detail.