10. The Treasury may—
(a) conduct allocations of allowances for payment otherwise than by auction, or
(b) appoint the Secretary of State, the Scottish Ministers, Welsh Ministers or the Department of the Environment in Northern Ireland, or any other person, or any of them acting jointly, to conduct allocations of allowances for payment otherwise than by auction, subject to such conditions (including as to fees charged) and limitations as the Treasury see fit.
11.—(1) If the Treasury consider that an account holder has breached these Regulations or the Scheme, the Treasury may publish a statement containing such information as they see fit regarding the breach, including the name of the account holder and the nature of the breach.
(2) If the Treasury propose to publish such a statement, they must give the account holder a notice setting out the terms of the statement and must specify a period of no less than 28 days within which the account holder may make written representations by notice to the Treasury.
(3) The Treasury must then decide, within a reasonable time, whether or not to publish a statement (whether or not in the terms proposed) and must give the account holder, without delay, a notice setting out the terms of the statement.
(4) After a statement under paragraph (1) has been published, the Treasury must send a copy of it to the account holder.
12.—(1) The Treasury must appoint an independent observer to oversee any allocation or allocations under these Regulations.
(2) The terms of appointment and remuneration (if any) of the independent observer shall be determined by the Treasury.
(3) The independent observer must provide a report to the Treasury on the conduct of an allocation.
(4) The report must be provided to the Treasury as soon as reasonably practicable after an allocation has taken place.
(5) The person conducting an auction or the person conducting an allocation for payment otherwise than by auction must provide access to any information relating to the allocation that is reasonably required by the independent observer for the purpose of carrying out his functions under this regulation.
13.—(1) A person in receipt of any decision of the Treasury or of a person conducting an auction or of a person conducting an allocation for payment otherwise than by auction under these Regulations may request a review of the decision.
(2) Such request for a review must be sent by notice to the Treasury within 28 days of notification of the decision.
(3) On receipt of such request the Treasury must carry out a review.
(4) When carrying out a review the Treasury must ensure that the individual responsible for the original decision is not responsible for carrying out the review.
(5) Before determining the outcome of any review under this regulation, the Treasury may appoint an independent person to make a report in writing to them.
(6) If a report is made by the independent person, it must include the independent person’s conclusions and recommendations, if any, or the independent person’s reasons for not making any recommendations.
(7) The terms of appointment and remuneration (if any) of the independent person shall be determined by the Treasury.
(8) On receipt of a report from an independent person, or following its own review of the matter, the Treasury must notify the person requesting the review of their decision in respect of the review.
14.—(1) Any notice to be given under these Regulations to the Treasury, to a person conducting an auction or to a person conducting an allocation for payment otherwise than by auction—
(a) must be given in writing,
(b) where the Scheme specifies the person to whom the notice is to be addressed, must be marked for the attention of that person,
(c) must be delivered—
(i) by electronic mail to an electronic mail address specified in the Scheme,
(ii) by personal delivery to such address as is specified in the Scheme, or
(iii) by fax to a number specified in the Scheme.
(2) Any notice to be given to the Environment Agency under regulation 9(1)(a) must be given in writing, marked for the attention of the person specified in the Scheme and delivered by electronic mail to an electronic mail address specified in the Scheme.
(3) Any request to be given to the Environment Agency under regulation 9(1)(b) must be given by electronic communication using the automated processes established in accordance with Article 3 of the Registries Regulation.
(4) Any notice to be given under these Regulations by the Treasury or by the person conducting an auction or by the person conducting an allocation for payment otherwise than by auction must be given in writing and may be given to a person—
(a) by leaving it at that person’s address;
(b) by sending it by post to that person at that address; or
(c) where an address for service using electronic mail has been given by that person, by sending it using electronic mail to that person at that address.
(5) Any notice referred to in paragraph (4) may—
(a) in the case of a body corporate (other than a limited liability partnership) be served on the secretary or clerk of that body;
(b) in the case of a limited liability partnership, be served on a member; or
(c) in the case of a partnership (other than a limited liability partnership), be served on or given to a partner or person having the control or management of the partnership business.
15.—(1) Any sums received by the Treasury or the Secretary of State under or by virtue of these Regulations shall be paid into the Consolidated Fund.
(2) Any sums received by an appointee under or by virtue of these Regulations shall be paid to the Secretary of State who shall pay them into the Consolidated Fund.
(3) In this regulation “appointee” means a person, other than the Secretary of State, appointed by the Treasury under regulation 3(b) or 10(b).
Claire Ward
Alan Campbell
Two of the Lords Commissioners of Her Majesty’s Treasury
10th July 2008
(This note is not part of the Regulations)
These Regulations make provision for the Treasury to impose charges by providing for Community tradeable emissions allowances to be allocated in return for payment. The Regulations set out provision as to who will conduct allocations, the payment for and transfer of emissions allowances, the consequences of late or non-payment and of breaches of the Regulations or of the Treasury’s Scheme, the consequences of a transfer of excess allowances, the appointment of an independent observer, the opportunity to obtain a review of decisions made under the Regulations and provisions relating to the giving of notice.
Part 2 of the Regulations sets out the provisions relating to allocation of allowances in return for payment by auction.
Regulation 3 provides that the Treasury may conduct auctions, or may appoint another person to conduct auctions.
Regulation 4 provides that the person conducting an auction may collect a deposit and may use it to satisfy payment for the allowances.
Regulation 5 provides that an account holder must pay for allowances in full by the settlement date. Payment must be made to a bank account nominated by the person conducting the auction.
Regulation 6 provides that once full payment has been received and the Environment Agency has received such information from the person conducting the auction as is necessary to effect transfer, the Environment Agency must transfer allowances to the nominated holding account of an account holder.
Regulation 7 provides that if, following a review under regulation 13, the decision of the Treasury is to allocate allowances to an account holder, the account holder must pay the auction clearing price for those allowances. The account holder must pay for those allowances in full by the date specified by the Treasury. Upon late or non-payment by the account holder, the Treasury may charge interest on the late payment, or decide not to transfer the allowances to the account holder.
Regulation 8 provides that, upon late or non-payment by an account holder, the person conducting the auction may charge interest on the late payment, or decide not to provide to the Environment Agency such information as is necessary to effect the transfer of allowances to the account holder.
Regulation 9 requires the account holder to notify the Environment Agency of any excess allowances that are transferred. If a transfer of excess allowances comes to the notice of the Environment Agency and the nominated holding account is administered by the Environment Agency, then the Environment Agency must transfer the excess allowances from that account to the Party holding account. If the account holder has dealt in the excess allowances, or in an interest in them, the person conducting the auction may require the account holder to pay the auction clearing price for those allowances.
Part 3 of the Regulations sets out provision relating to allocation of allowances in return for payment where the allocation method is not an auction.
Regulation 10 provides that the Treasury may conduct allocations other than auctions, or may appoint another person to conduct allocations other than auctions.
Part 4 of the Regulations sets out general provisions relating to all types of allocation of allowances in return for payment.
Regulation 11 permits the Treasury to publish details of any breaches of the Regulations or of the Treasury’s Scheme.
Regulation 12 sets out provision relating to the appointment of an independent observer to oversee allocations and includes a requirement for the independent observer to provide a report to the Treasury on the conduct of allocations.
Regulation 13 provides for the review of any decision of the Treasury under the Regulations or a decision of the person conducting an auction or other allocation. Provision is made permitting the Treasury to appoint an independent person to make a report before the review decision is made.
Regulation 14 sets out provision relating to notices.
Regulation 15 provides that any money received under or by virtue of the Regulations is to be paid into the Consolidated Fund.
These Regulations provide the framework for allocating Community tradeable emissions allowances in return for payment, and as such no administrative impact in the private sector is foreseen. The administrative impact of allocations in return for payment will depend on the detailed design of the auction or other allocation method. The Government consulted on auction design and other allocation methods at the end of 2007 and that consultation was accompanied by a full Impact Assessment, which can be found at www.defra.gov.uk. Treasury will publish a Scheme, which will cover the conduct and terms of allocation, along with the detailed design of the auctions or other sales methods, and the requirements in order to participate. An updated impact assessment will be published along with the Scheme.