UK Carbon Emissions Tax (UK Brexit)

I posted before about the Carbon Emissions Tax that will be applied in place of EU ETS (the EU carbon trading scheme). The UK Government issued yesterday further instructions on this Carbon Emissions Tax. These instructions are here.

UK Carbon Emissions Tax – imminent key dates

From 30 March 2019, if there is no transition, business emissions from 1 January 2019 onwards will no longer be covered by the EU ETS, so UK businesses will no longer need to surrender allowances for these emissions at the end of each year.

However, all stationary installations currently participating in the EU ETS should continue to comply with the regulations for the monitoring, reporting and verification of greenhouse gases. These regulations will underlie the new UK Carbon Emissions Tax.

The UK Carbon Emissions Tax is provided for in the Finance Act 2019 and will be introduced on 1 April 2019 – the reporting period for stationary operators will be 1 April 2019 to 31 December 2019. The 2019 tax will be set at £16 per tonne. Subject to state aid approval, the scheme to compensate energy-intensive industries for the indirect costs of the EU ETS would remain in place to compensate for the indirect emission costs of the new Carbon Emissions Tax.

The Finance Act 2019 is now added to the Brexit Law List, in Cardinal Environment EHS Legislation Registers & Law Checklists.

Accounts administered by the UK in the EU ETS allowance registry and the Kyoto Protocol registry will be blocked from the point of the UK leaving the EU. Operators wishing to retain access to their allowances after the withdrawal date should consider opening an account in another member state’s registry for this purpose, and should consider the amount of time this is likely to take. Clean Development Mechanism project developers with a UK Letter of Authority will also need a letter of approval from a different Designated National Authority.

Until further notice, the UK government will not issue or auction any 2019 EU ETS allowances. It remains possible for allowances to be purchased through the European Energy Exchange (EEX) auction platform, and on the secondary market. Operators should consider this when planning to meet 2018 compliance obligations. To make sure obligations will not be affected, the government brought forward the 2018 compliance year deadlines, published on 7 March 2018. This states that a company (in EU ETS) needs to report its 2018 emissions by 11 March 2019, and surrender allowances for those emissions by 15 March 2019.

Guidance on this was issued in October 2018 – here.

F-gases and ODS (UK Brexit)

I posted before that the UK will regulate Fluorinated Greenhouse Gases (F-gases) and Ozone Depleting Substances (ODS) from 30th March 2019, and that a Technical Notice had been issued on this (the Environment Agency would be the regulator).

New Guidance on Use and Trade is now issued.

The new Brexit Use and Trade Guidance is here. I will add this to the Brexit Law List, in Cardinal Environment EHS Legislation Registers and Law Checklists.

F-gas and ODS are substances used mainly as refrigerants, but also in other products including:

• medical inhalers

• fire extinguishers

• insulation foams

• solvents

• feedstocks for the manufacture of other chemicals

This affects UK companies that :

• produce, supply, import, export or use bulk F-gas or ODS

• manufacture or import equipment containing F-gas or ODS

In addition, the document applies to the service of :

• commercial, industrial and transport refrigeration and air conditioning systems

• other products containing F-gas or ODS

New UK ODS and Fgas regulations transfer most of the requirements of the EU regulations into UK law. These are found in the Brexit Law List.

The UK will continue to:

• restrict ODS

• use the same schedule as the EU to phase down HFCs (hydrofluorocarbons, the most common type of -gas) by 79% by 2030 relative to a 2009 to 2012 baseline.

That means UK F-gas quotas will follow the same phase down steps as the EU:

• limited to 63% of the baseline in 2019 and 2020

• reducing to 45% of the baseline in 2021

Most of the rules for F-gas and ODS will not change. However, the UK will have separate quota systems, and the IT systems UK businesses use to manage quotas and report on use will change.

UK companies will need to comply with EU regulations on products they place on the EU market after exit (since after 30 March, the UK will be a ‘third country’).

Scotland, Wales and Northern Ireland have all decided to remain part of a single, UK-wide system if the UK leaves the EU with no deal on 29 March 2019.

The Environment Agency will administer the systems for the whole of the UK.

F-gases

When the UK leaves the EU, many of the rules for F-gases will not change, including requirements or restrictions:

• to prevent intentional release of F-gases

• to prevent the unintentional release of F-gases during production and use

• to minimise and repair leakages

• to check leaks and keep records

• to use leakage detection systems

• to provide evidence that trifluoromethane produced during the production of F-gases has been destroyed

• to recover F-gases from equipment for recycling, reclamation or destruction

• on placing certain products and equipment on the market

• on sales of F-gases to businesses which do not hold the relevant certificates or attestations

• for product and equipment labelling

• on the use of certain F-gases for magnesium die-casting, vehicle tyres or servicing certain refrigeration equipment

Requirements in the UK will also not change on:

• the individual qualifications and company certifications you need to install, service, maintain, repair, decommission or check for leaks in certain equipment or the recover F-gas

• the content and requirements of training and certification programmes

• the validity of existing certificates and training attestations, including those issued by EU member states both before and after the UK leaves the EU.

ODS

When the UK leaves the EU, the rules will stay the same for ODS that a UK company :

• imports

• supplies

• uses

• recovers

• destroys

UK companies will have the same responsibilities to:

• maintain equipment

• control leaks

Rules on how a UK company supplies and uses ODS will remain the same, including for:

• feedstock

• process agents

• destruction

• reclamation

• essential laboratory and analytical use

• halons for certain critical uses

NOTE : the above is written for the situation “post 30 March if there is no deal in place”. This is a short hand. Please keep following the Blog for updates.

Road Haulage (NI Brexit)

UPDATE : the EU Council has now agreed its position on basic road connectivity – here.

There is uncertainty in the haulage industry about what will happen at EU borders if the UK leaves without a Brexit deal next month.

Back in November, the UK Government issued guidance to UK hauliers stating that they “might need ECMT permits to transport goods in the EU and European Economic Area (EEA)” if there is no deal by 29 March.

The European Conference of Ministers of Transport (ECMT) permits can be used in a list of 43 countries which have signed up to the international arrangement.

The deadline for 2019 applications expired on 18 January 2019 and on Saturday night, many hauliers were informed on whether or not they were successful. I posted earlier about the deadline.

ECMT permits were over-subscribed and allocated on a points-based system, with higher scores awarded to firms who make a larger number of journeys into EU member states.

It would appear the Department for Transport (DfT) did not take into account journeys to the Republic of Ireland from Northern Ireland operators, whereas English, Scottish or Welsh hauliers were credited with their journeys to the Republic of Ireland.

Just over 1,200 permits were available for the UK as a whole and it is likely only 60-70 were made available to Northern Ireland firms.

In its guidance issued last year, the Government said it expected that Northern Ireland hauliers “will not need an ECMT permit” to drive to or through the Republic of Ireland.

It stated it would not require Republic of Ireland hauliers to have ECMT permits to operate in Northern Ireland.

It added that the UK was seeking a reciprocal agreement from the Irish government to allow Northern Ireland hauliers to travel across the Irish border without a permit.

I posted earlier that the European Commission (in its Contingency Plan) has proposed legislation that would allow UK hauliers basic rights (on a reciprocal basis) to conduct operations to, from and through the EU for a limited period of nine months after exit, if there is no deal.

“The Commission’s proposal will need to be agreed by the Council and European Parliament, and is being considered by both institutions urgently.” (UK Transport Minister, by statement last week)

The minister said he laid legislation before Parliament last week to provide for that access. [this will be included in the Brexit Law List, added to Cardinal Environment EHS Legislation Registers and Law Checklists]

UKCA mark (UK Brexit)

I posted earlier that the Government issued instructions on the CE mark and the new UKCA mark. This post sets out more detail.

The UK issued a technical notice on Construction Products – here.

The UK then issued instructions re the new UKCA mark – here.

A couple of points :

(1) Manufacturers will not have to use the UK marking (UKCA mark) immediately. In the event that the UK leaves the EU without a deal manufacturers will be able, for a period of time, to continue to use the CE marking when placing their products on the UK market (if their product meets the relevant EU requirements). This would include products that have had any necessary third-party assessment carried out by an EU-recognised notified body. The Government would consult businesses before taking a decision on when this period would end.

(2) Products being exported to the EU will need to carry the CE marking (CE mark) to demonstrate compliance with the relevant EU regulatory requirements.

(3) Manufacturers will need to use the UK marking if their products require third party assessment of conformity and if this has been carried out by a UK-based Notified Body (post-exit called an ‘Approved Body’). In that case you will have to apply the new UKCA marking after 29 March 2019 as the EU will cease to recognise UK notified bodies. This will not be the case if the certificate of conformity has been transferred to an EU-recognised Notified Body (in which case the CE marking would apply, and would be valid for both the EU and UK markets.

Questions about the UK mark should be sent to BEIS in the first instance: goods.regulation@beis.gov.uk  They are receiving a high volume of correspondence at the moment but will endeavour to get back to you as soon as possible.

I am hearing that CE marks can continue for medical devices, I will post a separate post when I have more details.

Border changes : partnership pack (UK Brexit)

In a major update and bringing together of already issued instructions, the new Partnership Pack (borders) is now issued. Here

Please note the Hauliers sections, and the sections for Specialist Traders.

Note : I already posted about bi laterals in place to continue existing transboundary waste movement contracts. But note the further work that needs to be done in this area.

CITES protected species (UK Brexit)

Instructions were issued recently on how trade in endangered species protected by international CITES convention will operate to and from the UK. CITES applies to listed endangered plants and animals. The instructions are here.

CITES-listed species are listed in Annexes A to D of the EU Wildlife Trade Regulations.

Species in Annex A have the highest level of protection. The instructions state a UK based organisation would still need to apply for a certificate to use an Annex A specimen commercially.

Annex B, C and D species can currently be freely traded in the EU.

The main change will be that a UK based organisation will need CITES permits to move CITES goods between the UK and the EU for species listed in Annexes B to D.

Further information is set out in the instructions.

Note : as with all these current Brexit instructions, a deal (or deals) reached with the EU may change aspects of the instructions. Please keep following this Blog.