Debate contribution: The draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025

Debate contribution by Mr Robbie Butler on 28 January 2025.

MLA

Mr Robbie Butler

Party at the time

Ulster Unionist Party

Date

28 January 2025

Type

Debate contribution

Business

Executive Committee Business

Heading

The draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025

Assembly identifier

Official Report component 4764061

Read the official Assembly record

Text

Thank you, Mr Speaker. This is the stuff that you are interested in. The Committee for Agriculture, Environment and Rural Affairs has devoted considerable time to increasing its knowledge of the UK greenhouse gas emissions trading scheme, otherwise known at the UK ETS. The Committee received its first oral briefing from DAERA officials on the operation of the UK ETS on 18 April 2024. We heard that the Greenhouse Gas Emissions Trading Scheme Order 2020 provided the legislative basis for the UK ETS. Committee members were told that the UK ETS, which was established in January 2021, is an effective decarbonisation scheme, with the aim of promoting carbon emissions reductions and incentivising investment in clean, low-carbon technologies. Members were keen to understand the operation and governance of the scheme by the UK ETS Authority, including some of the specifics to Northern Ireland. More recently, at its meeting on 12 December, the Committee received an oral briefing on the ETS common framework. It noted that the aim of the UK-wide system was to create a larger carbon market with greater liquidity and a consistent carbon price across the UK, and that that increased the opportunity for emissions reductions and the cost-effectiveness of emissions trading. The history of the SI with the AERA Committee is as follows. At its meeting on 28 November, the Committee considered correspondence from DAERA, dated 19 November, that gave us notification of the publication of the UK ETS Authority's response to a consultation on the free allocation of UK ETS allowances — the free allocation review, otherwise known as FAR 2 — which addresses two permanent cessation proposals that are planned for implementation in the 2025 scheme. The Minister mentioned the proposals, but I will put them on record. They are to eliminate the perverse incentive whereby an operator can receive an excess of free allowances in their final year of operation, which they could then sell on the market to their benefit; and to address challenges that regulators face in interpreting and applying the permanent cessation definitions, with the UK ETS regulator in Northern Ireland being the chief inspector of the Northern Ireland Environmental Agency (NIEA). The Committee noted that no wider market impacts or risks were considered likely as a result of the two proposed technical changes. At our meeting on 12 December, Committee members considered further correspondence from DAERA, dated 20 November, advising that Minister Muir had given consent for the two proposed amendments that would address the permanent cessation proposals to be enacted through draft legislation amending the Greenhouse Gas Emissions Training Scheme Order 2020. The Committee noted that the draft SI introduces those two technical changes, which relate to the treatment and definition of stationary installations that permanently cease to undertake an activity that was once regulated by the scheme. The Committee considered the detail of both technical changes. Technical change 1, which is on the treatment of permanent cessations, will allow the UK ETS Authority to consider, when the closure of an installation is due to significant decarbonisation investment, whether that full free allocation entitlement could be retained for the purpose of supporting decarbonisation. With technical change 2, the definition of permanent cessations is to be updated to remove the reference to a situation in which it is "technically impossible to resume operation", which can be difficult for regulators to determine — and for me to say. Instead, it refers to the permanent cessation of activity. Members noted that, on 2 December, the SI was simultaneously laid under the affirmative resolution procedure in each House of the UK Parliament, the Northern Ireland Assembly, the Scottish Parliament and the Welsh Senedd under schedule 3 to the Climate Change Act 2008 as an Order in Council for approval in each legislature. The Committee was content to note that, subject to the outcomes of debates that are to be held in all other UK legislatures, the SI will come into force on 1 March. The Committee agrees to the recommendation that the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2025 be approved by the Assembly.

682 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 11:55 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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