Office of Public Sector Information
417.Paragraph 3 amends section 126 of the Energy Act 2004 which enables an RTF order to make provision about how amounts of transport fuel may count towards discharging obligations imposed by an RTFO scheme. New section 126(5) means that if a future RTF order makes such provision by reference to a document it may provide for references to the document to have effect as references to it as revised or re-issued from time to time. This will enable reference to be made to international standards for carbon and sustainability without the need to amend the order whenever those standards are revised.
418.Paragraph 3 also amends section 126 of the Energy Act 2004 to create a new power for the Secretary of State to give written directions to the Administrator about the exercise of any of the Administrator’s functions in connection with counting or determining amounts of transport fuel for the purpose of the RTFO scheme. The Administrator must comply with any such directions. The power includes power to revoke or vary any directions given. This power may be used for example to direct the Administrator to use a particular methodology if a future RTF order requires amounts of transport fuel to be counted or determined by reference to its effects on carbon emissions or sustainable development.
419.Paragraph 4 amends the provisions of the Energy Act 2004 which set out what the Administrator must do with money he receives when administering the RTFO scheme from buy-out payments.
420.Currently, the powers in section 128 of the Energy Act 2004 mean that the Administrator may (if an RTF order so provides, as the 2007 order does) receive buy-out payments from transport fuel suppliers who choose to buy-out their obligation rather than supply the specified amount of renewable transport fuel. By section 128(7) such sums must be paid to transport fuel suppliers under a system of allocation specified in the RTF order (subject to first meeting the costs of the Administrator if the RTF order so provides under the power in section 128(6), which the 2007 order does not).
421.As a result of amendments to section 128 by paragraph 4, where the Administrator is the Secretary of State new section 128(6)(a) will require the buy-out payments to be paid into the Consolidated Fund. But new section 128(6)(b) will allow (but not require) the RTF order to provide for the Secretary of State to make payments to transport fuel suppliers under a system of allocation specified in the order. The RTF order must ensure that the total paid out does not at any time exceed the total of the buy-out payments received up to that time (new section 128(7)).
422.If the Administrator is a person other than the Secretary of State, it will be possible for the RTF order to provide instead that the Administrator must use some or all of the buy-out payments to meet his costs or must pay some or all of the buy-out payments to the Secretary of State (in which case they will be payable by him into the Consolidated Fund) (new section 128(8)). To the extent that the payments are not dealt with in this way, they will have to be paid to transport fuel suppliers under a system of allocation specified in the RTF order (new section 128(9)).
423.Paragraph 5 amends section 129(7) of the Energy Act 2004 which currently provides that civil penalties received by the Administrator under an RTF order must be paid to the Secretary of State for payment into the Consolidated Fund. The amendment makes it clear that, if the Secretary of State is the Administrator, he is to pay those sums into the Consolidated Fund directly.
424.Paragraph 6 inserts into the Energy Act 2004 new sections 131A, 131B and 131C which make provision enabling information to be disclosed by Her Majesty’s Revenue and Customs (“HMRC”) to the Administrator, as well as prohibiting further disclosure of the information. The information in question is restricted to information held in connection with HMRC’s functions under or by virtue of the Hydrocarbon Oil Duties Act 1979. This is to limit the information to that which is relevant to the Administrator's functions.
425.New section 131A permits the information to be disclosed to the Administrator or an authorised person (a person who provides services to or acts on behalf of the Administrator and is authorised by the Administrator to receive the information).
426.New section 131B prohibits the disclosure of the information by the Administrator, an authorised person or any other person who obtains it in the course of providing services to or acting on behalf of the Administrator, except in certain specified cases (for example a disclosure required by a court order). The restrictions on further disclosure only apply to information received under new section 131A that has not also been received by the Administrator or an authorised person by another means.
427.Wrongful disclosure contrary to new section 131B is an offence under new section 131C if the information is about a person who is identified in or identifiable from the disclosure. The offence is triable either summarily or on indictment. Section 131C provides that a person convicted on indictment may be imprisoned for up to 2 years or fined or both, and that on summary conviction a person is liable to imprisonment for up to 12 months or to a fine not exceeding the statutory maximum (currently £5000) or both. It also provides that, in England and Wales, the penalty on summary conviction of an offence committed before section 154(1) of the Criminal Justice Act 2003 comes into force will be 6 months’ imprisonment. The same penalty will apply in Northern Ireland. A person charged with an offence under new section 131C has a defence if he can prove that he reasonably believed that the disclosure was lawful or that the information was already lawfully in the public domain.
428.This section introduces Schedule 8 to the Act, which makes amendments to the provisions of section 33BC of the Gas Act 1986, section 41A of the Electricity Act 1989 and section 103 of the Utilities Act 2000 which relate to powers of the Secretary of State to set carbon emission reduction targets.
429.Paragraph 1 makes amendments to section 33BC of the Gas Act 1986.
430.Paragraph 1(1) introduces the amendments to section 33BC of the Gas Act 1986. Section 33BC is the enabling power which allows the Secretary of State to impose carbon emissions reduction obligations on those gas companies falling within its scope.
431.Paragraph 1(2) inserts a new subsection (1A) into section 33BC of the Gas Act 1986. Subsection (1A) allows the Secretary of State to exercise the power (to impose carbon emissions reduction obligations) so as to impose more than one obligation on a person in relation to the same period or periods which may overlap.
432.Paragraph 1(3) inserts a new paragraph (ba) into section 33BC(5) of the Gas Act 1986. The new paragraph gives the Secretary of State the power to require the whole or any part of a carbon emissions reduction target to be met by action promoted to persons of a specified description, action promoted in specified areas or a combination of the two.
433.Paragraph 1(4) inserts a definition of “specified” into section 33BC (13). This is necessary as a result of the new paragraph (ba) (introduced by paragraph 1(3)) allowing the Secretary of State to specify persons to whom or areas in which action must be promoted by those under a carbon emissions reduction obligation.
434.Paragraphs 2 and 3 make amendments to the Electricity Act 1989.
435.Paragraph 2 inserts a definition of “electricity generators” into section 6(9) of the Electricity Act 1989.
436.Paragraph 3(1) introduces amendments to section 41A of the Electricity Act 1989. Section 41A is the enabling power which allows the Secretary of State to impose carbon emissions reduction obligations on those electricity companies falling within its scope.
437.Paragraph 3(2) widens the scope of the enabling power in section 41A(1) so that it includes electricity generators. This is achieved by the insertion of a new paragraph (za) into section 41A(1). As a result of this amendment the Secretary of State may exercise the enabling power so as to impose a carbon emissions reduction obligation on electricity generators, electricity distributors and electricity suppliers. To date, under section 41A, the Secretary of State has only exercised the power in relation to electricity suppliers.
438.Paragraph 3(3) makes a similar amendment to that made by paragraph 1(2).
439.Paragraph 3(4) makes a consequential amendment to section 41A(3) which is necessary as a result of bringing electricity generators within the scope of section 41A(1).
440.Paragraph 3(5) makes consequential amendments to section 41A(4) which are necessary as a result of bringing electricity generators within the scope of section 41A(1).
441.Paragraph 3(6) contains a mixture of consequential amendments to section 41A(5) which are necessary as a result of bringing electricity generators within the scope of section 41A(1) but also introduces a new provision. Paragraph 3(6)(b) introduces a new paragraph (ba) into section 41A(5) which reflects the amendment made by paragraph 1(3).
442.Paragraphs 3(7), 3(8), 3(9), and 3(10) make consequential amendments to sections 41A(6), (7)(d), (8)(d) and (11) respectively. All of these amendments are necessary as a result of bringing electricity generators within the scope of section 41A(1).
443.Paragraph 3(11) inserts a definition of “specified” into section 41A(13). This is necessary as a result of the new paragraph (ba) (introduced by paragraph 3(6)(b) into section 41A(5)) allowing the Secretary of State to specify persons to whom or areas in which action must be promoted by those under a carbon emissions reduction obligation.
444.Paragraph 3(12) amends the heading of section 41A so that it reflects the scope of the provision as a result of electricity generators being brought within its scope.
445.Paragraph 4 makes amendments to section 42AA of the Electricity Act 1989.
446.Paragraph 4(1) introduces amendments to section 42AA of the Electricity Act 1989. Section 42AA requires the National Consumer Council to publish information on the standards of performance of electricity suppliers and electricity distributors relating to any carbon emissions reduction obligation imposed on them under section 41A.
447.Paragraphs 4(2) and 4(3) make consequential amendments to section 42AA so as to ensure that electricity generators are within its scope and that the National Consumer Council can publish information relating to their standards of performance relating to any carbon emissions reduction obligation placed upon them in the future.
448.Paragraph 5 makes a consequential amendment to section 64(1) of the Electricity Act 1989 which is necessary as a result of bringing electricity generators within the scope of the power in section 41A. Paragraph 5 amends the definition of “electricity distributor” and “electricity supplier” in section 64(1) so as to include “electricity generator”.
449.Paragraph 6 makes amendments to section 103 of the Utilities Act 2000.
450.Paragraph 6(1) introduces amendments to section 103 of the Utilities Act 2000. Section 103 contains a power which relates to the exercise of power under section 33BC of the Gas Act 1986 and section 41A of the Electricity Act 1989. Section 103 provides the Secretary of State with the power to set overall carbon emissions reduction targets.
451.Paragraph 6(2) makes a consequential amendment to section 103(1)(b) which is necessary as a result of electricity generators being brought within the scope of the enabling power in section 41A of the Electricity Act 1989.
452.Paragraph 6(3) inserts a new subsection (1A) into section 103 of the Utilities Act 2000. In light of the amendments introduced by paragraphs 1(2) and 3(3) which allow the Secretary of State to impose more than one carbon emissions reduction obligation on those persons falling within the scope of the enabling powers, paragraph 6(3) introduces a new subsection (1A) which allows the Secretary of State to specify more than one overall carbon emissions reduction target in relation to the same period or periods which overlap to any extent.
453.Paragraphs 6(4) and 6(5) introduce consequential amendments which are necessary as a result of electricity generators being brought within the scope of the enabling power in section 41A of the Electricity Act 1989.
454.This section requires the Welsh Ministers to lay before the National Assembly for Wales, from time to time, a report on greenhouse gas emissions and the impacts of climate change on Wales.
455.Subsection (1) requires the Welsh Ministers to include in their report their objectives in relation to greenhouse gas emissions and the impacts of climate change in Wales, the action they (and others) have taken to deal with those emissions and impacts and their future priorities for dealing with them.
456.Subsection (2) requires the Welsh Ministers to set out how they intend to exercise their power to issue directions to reporting authorities under section 67. Subsection (3) provides that this does not affect the Welsh Ministers’ general discretion as to how they may exercise their power to issue directions
457.Subsection (4) makes it a requirement that the second and subsequent report under this section should include an assessment of the progress made towards implementing the objectives in earlier reports.
458.Subsection (5) defines “Wales”, for the purpose of this section, by reference to section 158(1) of the Government of Wales Act 2006 (c.32). This definition includes the sea adjacent to Wales out as far as the seaward boundary of the territorial sea.
459.This section devolves to the Welsh Ministers the function under section 3 of the Climate Change and Sustainable Energy Act 2006 (c.19) of preparing an energy measures report in relation to Wales. It also widens the obligation to cover certain other measures and provides that the Secretary of State’s consent is required in relation to certain elements of a report.
460.Subsection (2) inserts a new section 3A after section 3 of the Climate Change and Sustainable Energy Act 2006 (c.19). New section 3A requires the Welsh Ministers to prepare a “climate change measures report”, which is a report containing information for Welsh local authorities in relation to measures which they may take and which would or might have certain effects, including (in contrast to section 3) the effect of addressing the impacts of climate change. Subsection (5) of new section 3A requires the Secretary of State’s consent where the report contains information about local authority measures in relation to which the Secretary of State has certain functions, exercisable in relation to Wales (for example, the function of making building regulations).
461.This section repeals section 2 of the Climate Change and Sustainable Energy Act 2006 (c.19). The reporting requirements under that section are substantially replicated by the reporting requirements in sections 16 and 36 in Parts 1 and 2 of the Act.
462.Subsection (1) of this section requires the Secretary of State to publish guidance on how greenhouse gas emissions can be measured or calculated by persons responsible for activities which lead to those emissions. The intention behind the guidance is to support businesses wishing to report on their emissions and to improve the consistency of emissions reporting by those businesses, so that the reports can be more easily understood and compared.
463.Subsection (2) requires the Secretary of State to publish the guidance by 1st October 2009 and subsection (3) allows the Secretary of State to revise the guidance from time to time. Subsection (4) places the Secretary of State under an obligation to consult the other national authorities (see section 95) before publishing or revising any guidance and subsection (5) allows the Secretary of State to publish the guidance in any manner he considers appropriate.
464.Subsection (1) of this section requires the Secretary of State to carry out a review of the contribution that reporting of greenhouse gas emissions could make to the UK Government’s objectives in relation to climate change, and report the conclusions of the review to Parliament by 1st December 2010 (subsection (2)). It is expected that the review will explore the costs and benefits of the reporting of greenhouse gas emissions by businesses, public sector organisations and others.
465.Subsection (3) requires the Secretary of State to carry out his review in consultation with the other national authorities (as defined in section 95).
466.Subsection (1) of this section places a duty on the Secretary of State, by 6th April 2012, either to make regulations under section 416(4) of the Companies Act 2006 (c.46) requiring companies to include in their Directors’ Report such information about emissions as the regulations may require, or to lay before Parliament explaining why he has not done so.
467.Subsection (2) provides that the duty to make regulations is complied with if they concern any specified type of company or any specified category of emissions. The regulations do not have to apply to all of the emissions of all companies.
468.This section places a duty on the Treasury to make an annual report to Parliament on the progress made towards improving the efficiency and contribution to sustainability of buildings which form part of the Government’s civil estate.
469.Subsection (1) sets out the basic duty to make a report to Parliament in respect of each year, beginning with 2008. Subsection (2) provides that the report must contain two specific elements: it must set out the progress made towards reducing the size of the civil estate and progress made towards ensuring that buildings that become part of the civil estate fall within the top quartile of energy performance.
470.Subsection (3) places a duty on the Treasury to include in the report a statement explaining why, if a building which has become part of the civil estate does not fall within the top quartile of energy performance, the building has nevertheless become part of the estate.
471.Subsection (4) provides that each report must be laid before Parliament by 1st June in the year after the year it relates to. So the report in respect of 2008 must be laid before Parliament by 1st June 2009.
472.Subsection (5) provides that the word “building” in this section only applies to buildings which do not use energy for heating or cooling any part of their interior. Subsection (6) provides that a building only forms part of the “civil estate” for the purposes of this section if it is used for central government administration (as opposed to operational activities) and, on the date the Act receives Royal Assent, it is of a description of buildings for which the Treasury has responsibilities in relation to efficiency and sustainability.
473.Subsections (7) and (8) give the Treasury the power to provide, by affirmative resolution order, that buildings of a specified description are or are not to be considered to form part of the civil estate for the purposes of this section.
474.This section authorises any Minister of the Crown or government department, the Scottish Ministers, the Welsh Ministers and any Northern Ireland department to acquire units, or interests in units, representing reductions in emissions of greenhouse gases, removals of greenhouse gases from the atmosphere and units under cap-and-trade trading schemes.
475.This section therefore enables Her Majesty’s Government and the devolved administrations to offset emissions through the purchase of units (often referred to as “carbon credits”) or interests in units (such as the right to buy units at a fixed price at some point in the future). It also allows central government and the devolved administrations to purchase units or interests in units, by arrangement, for other public bodies which do not have to power to do so of their own accord. Units acquired using this power which meet the requirements of regulations under section 26 (carbon units and carbon accounting) may be used to reduce the level of the net UK carbon account (see section 27).
476.Subsection (3) provides that units or interests in units purchased by the Treasury are to be treated as being held by the persons who constitute the Treasury at that time.
477.Subsection (1) of this section amends section 105(2) of the Clean Neighbourhoods and Environment Act 2005 (c.16) to enable an increase in the maximum fines on summary conviction that can be provided for under the Pollution Prevention and Control Act 1999 (c.24).
478.This subsection will enable the maximum fines on summary conviction under regulations made under the Pollution Prevention and Control Act 1999 to be brought into line with the equivalent maximum fines under section 33(8) of the Environmental Protection Act 1990 (c.43) in order to ensure consistency in this area of regulation.
479.Subsection (2) amends the Environmental Permitting (England and Wales) Regulations 2007 (S.I. 2007/3538) so that such a change is made to those Regulations immediately on commencement of the section. This makes the penalties consistent with those which were imposed for offences against the Waste Management Licensing Regulations 1994 (S.I. 1994/1056).
480.This section provides that emissions from sources or other matters occurring in, above or below “UK coastal waters” or on the “UK sector of the continental shelf” count as emissions from the UK.
481.Subsection (2) defines “UK coastal waters” as areas on the land side of the seaward limit of the territorial sea adjacent to the UK (i.e. out to 12 nautical miles), and “the UK sector of the continental shelf” by reference to section 1(7) of the Continental Shelf Act 1964 (broadly, out to 200 nautical miles or the half-way point between countries, whichever is closer).
482.Subsection (3) provides that this section is subject to section 30, which provides that emissions from international aviation and international shipping are not to be regarded as emissions from UK sources for the purposes of Part 1 of the Act, unless regulations have been made to bring them in.
483.This section makes general provision in respect of powers to make orders or regulations under the Act. Subsection (3) allows orders or regulations to include supplementary, incidental and consequential provision and to make transitional provision and savings. Subsections (4) and (5) provide that any provision that may be made by order may instead be made by regulations, and vice versa; this is a matter of administrative convenience – the precise form of the instrument has no legal significance.
484.This section defines the terms “affirmative resolution procedure” and “negative resolution procedure” as they apply to instruments made by the Secretary of State. Subsection (3) provides that the affirmative resolution procedure may be used wherever the negative resolution procedure is stipulated; this will allow provisions which would otherwise have to be made using different procedures to be made in the same instrument. Subsection (4) provides that this section does not apply to instruments making trading schemes (see section 49 and Schedule 3) or instruments in relation to single use carrier bags (see section 77 and Schedule 6), both of which have their own specific procedures.
485.This section defines the term “greenhouse gas” to include:
carbon dioxide (CO2);
methane (CH4);
nitrous oxide (N2O);
hydrofluorocarbons (HFCs);
perfluorocarbons (PFCs);
sulphur hexafluoride (SF6).
486.The definition of greenhouse gases follows that used in the Kyoto Protocol. Note that the term “targeted greenhouse gas”, used in relation to the targets and budgets in Part 1 of the Act, is defined separately in section 24; for the time being, the lists of gases are identical.
487.Subsections (2) to (4) give the Secretary of State a power to amend the definition of “greenhouse gas” by negative resolution order. But the power can only be exercised if the Secretary of State considers that an international agreement has been reached which recognises that the gas contributes to climate change.
488.This section provides that emissions of greenhouse gases are to be measured or calculated in “tonnes of carbon dioxide equivalent” (defined in subsection (2)); this is to allow for the differing relative forcing effects and atmospheric lifetimes of differing greenhouse gases – for example, over 100 years, a tonne of methane has 23 times the global warming effect of carbon dioxide. These factors are known as “global warming potentials”, and are to be calculated consistently with international carbon reporting practice (defined in section 94).
489.This section defines the term “international carbon reporting practice” as accepted practice under the United Nations Framework Convention on Climate Change (UNFCCC) or other international agreements which the Secretary of State may specify using a negative resolution statutory instrument. For example, a post-2012 agreement may be specified for the purposes of this section. An order may supplement or replace the requirement to follow UNFCCC practices.
490.This section defines the term “national authority” to mean the Secretary of State, the Scottish Ministers, the Welsh Ministers and the relevant Northern Ireland department (see section 96). Subsection (2) provides that functions conferred on “the national authorities” are to be exercised jointly: they must agree on the way the function should be exercised and act together.
491.This section defines the term “relevant Northern Ireland department”. Different Northern Ireland departments deal with different administrative matters in Northern Ireland; this section provides that any given function is to be performed by the department which is responsible for the relevant matter. Where two or more departments are responsible, then the term refers to both of them (subsection (2)). Subsection (3) explains the process for answering a question as to which department is responsible for a matter.
492.This section defines the other terms used in the Act. In particular, this section defines “emissions” as meaning emissions of a given greenhouse gas into the atmosphere that are attributable to human activity; non-anthropogenic emissions are excluded.
493.This section contains an index of the expressions which are defined in the Act and refers the reader to where the definition can be found.
494.Apart from the sections and Schedules listed below, the Act extends to the whole of the United Kingdom (for more information see the notes on territorial application above):
Sections 71 to 76, 81 and 88, and Schedule 5, extend to England and Wales only;
Section 77 and Schedule 6 extend to England and Wales and Northern Ireland only;
Section 79 and Schedule 8 extend to England and Wales and Scotland only.
495.This Act has been drafted so that the provisions will come into force as follows:
Part 1 (carbon target and budgeting), Part 2 (the Committee on Climate Change) and Part 6 (general supplementary provisions) come into force on Royal Assent;
section 71(1) and Schedule 5 (waste reduction schemes) come into force in accordance with sections 72 to 75 (which make provision about piloting such schemes);
section 81 (climate change measures reports in Wales) comes into force on a day to be appointed by the Welsh Ministers;
section 82 (repeal of previous reporting provision) comes into force on 1st January 2009 (so that the reporting requirements under section 2 of the Climate Change and Sustainable Energy Act 2006 (c.19) apply in 2008);
the rest of the Act comes into force two months after Royal Assent.
496.See section 100 of the Act and the commentary above. The majority of provisions come into force on Royal Assent or two months later. One section comes into force on a day to be appointed and one section comes into force on 1st January 2009.
497.The following table sets out the dates and Hansard references for each stage of this Act’s passage through Parliament.
| Stage | Date | Hansard Reference |
|---|---|---|
| House of Lords | ||
| Introduction | 14th November 2007 |
|
| Second Reading | 27th November 2007 |
|
| Committee | 11th December 2007 17th December 2007 8th January 2008 9th January 2008 14th January 2008 23rd January 2008 30th January 2008 4th February 2008 |
|
| Report | 25th February 2008 4th March 2008 11th March 2008 18th March 2008 |
|
| Third Reading | 31st March 2008 |
|
| Lords Consideration of Commons Amendments | 17th November 2008 |
|
| House of Commons | ||
| Introduction | 1st April 2008 |
|
| Second Reading | 9th June 2008 |
|
| Committee | 24th June to 8th July 2008 | |
| Report and Third Reading | 28th October 2008 |
|
| Commons Consideration of Lords Amendments in lieu of, or to, certain Commons Amendments | 18th November 2008 |
|
House of Commons Hansard Vol. 483 Col. 855
Climate Change Act 2008