Chapter 8: Emissions performance standard
Section 57: Duty not to exceed annual carbon dioxide emissions limit
308.This section places a limit on the amount of carbon dioxide that a “fossil fuel plant” may emit within a year. Those operating a “fossil fuel plant” are placed under a duty not to exceed the emissions limit. The limit is calculated using the formula in subsection (1) by reference to an individual plant’s installed generating capacity (of the electricity generating station), a statutory rate of emissions and a load factor of 85%, (expressed in the formula as 7.446, see further below for an explanation for how this is derived).
309.To calculate the limit, a plant’s capacity in Mega Watts (MW) is multiplied by the statutory rate of emissions expressed in g/kWh (grams per kilo watt hour) and 7.446. The figure of 7.446 represents 85% of the total operating hours available in a year (8760) divided by 1000, which provides that the annual limit is expressed in tonnes of carbon dioxide.
310.By virtue of subsection (2) the statutory limit is set at 450g/kWh until the start of 2045. This “grandfathering” of the emissions limit under which a new plant is consented provides regulatory certainty for investors about the regime under which their assets will operate, consistent with the time needed to achieve a return on an investment in a new plant.
311.The emissions limit duty is applicable to a “fossil fuel plant” that is built pursuant to a “relevant consent” provided on or after the date that subsection (1) comes into force. Subsection (3) defines a “fossil fuel plant” whilst “relevant consent” is defined in section 61(1) as one which is granted under the Planning Act 2008, section 36 of the Electricity Act 1989 or Article 39 of the Electricity (Northern Ireland) Order 1992. This means that the emissions limit duty will only apply to plant at or over 50MW electrical capacity that are given development consent by the Secretary of State (in England and Wales), Scottish Ministers (in Scotland) or the Department of Enterprise, Trade and Investment (in Northern Ireland).
312.“Fossil fuel plant” is defined in subsections (3) and (4). Subsection (3) makes clear that a fossil fuel plant includes any associated gasification plant or Carbon Capture and Storage plant and which satisfies the conditions in subsection (4). The conditions in subsection (4) are that the plant is constructed pursuant to a “relevant consent”, see previous paragraph, and uses fossil fuels or fuel produced by gasification plant.
313.Subsection (5) subjects the emissions limit duty in subsection (1) to any regulations which the Secretary of State makes under subsection (6). Under subsection (6) the Secretary of State may make regulations regarding interpretation of the emissions limit duty (under subsection (1)) and for extending the application of the emissions limit duty or modifying it in respect of the types of case mentioned in Schedule 4.
314.Paragraph 1 of Schedule 4 allows the Secretary of State, when making regulations under section 57(6)(b), to bring existing fossil fuel plant consented prior to this legislation into the regime where that plant replaces a main boiler or installs an additional main boiler. This sort of provision may be necessary in order to prevent existing fossil fuel plants from being refurbished with replacement boilers, effectively extending a plant’s technical lifetime consistent with that of a new plant, thereby circumventing the emissions limit duty.
315.Paragraph 2 of Schedule 4 allows the Secretary of State to modify the emissions limit duty such that it does not apply to facilities that generate electricity solely for the purposes of self-supply. Paragraph 3 allows the Secretary of State to apply the emissions limit with modifications where gasification or CCS plant is “associated” with more than one generating station at a fossil fuel plant. Paragraph 4 allows the Secretary of State to provide different limits to generation plant which enters, or ends, commercial operation part way through a calendar year.
316.Subsection (7) illustrates the type of further provision which the Secretary of State may make in regulations under subsection (6)(a). Subsection (7)(a) taken together with Schedule 5 Paragraph 3 allows the Secretary of State to make provision in respect of “associated gasification plant(1)” for the purpose of ensuring that the emissions limit regime can be suitably applied in circumstances where a generating station uses fuel produced by a gasification plant that is either integral to, or remote from, the generating station, as well as where the gasification plant provides fuel to more than one generating station.
317.Subsection (7)(c)(ii) makes provision for application of the emissions limit duty in respect of electricity generating stations that only make incidental use of fossil fuel for safety, start-up or stabilisation purposes (such as biomass plants).
318.Regulations under subsection (7) can also include provisions to determine the emissions from fossil fuel plant, to include or exclude emissions by reference to regulations implementing the EU Emissions Trading System (subsection (7)(g)); and to exclude emissions associated with the supply of heat to customers from combined heat and power plants (subsection (8)).
Section 58: Introduction of carbon capture and storage: exemption from emissions limit
319.This section provides that a fossil-fuel plant that is equipped with carbon capture and storage (CCS) will be exempt from the emissions limit duty for a period of 3 years starting from the date when a complete CCS system (capture, transport and storage) is ready for use. The exemption is time-limited and available until the end of 2027.
320.Paragraph 4 of Schedule 4 allows the Secretary of State, when making regulations under section 57(6)(b) to be apply the exemption with modifications such that it can be applied to only those parts of a fossil fuel plant that are fitted with a complete CCS system.
Section 59: Suspension etc of emissions limit in exceptional circumstances
321.Subsection (2) provides the Secretary of State with a power to suspend or modify the emissions limit duty on fossil fuel plant located in Great Britain (GB). Subsection (1) sets out the circumstances in which the power to suspend or modify the emissions limit duty will arise. It will arise, for example, if the Secretary of State believes there is a risk of a shortfall in electricity supplies and that suspending the emissions limit duty will prevent or reduce a shortfall.
322.Subsection (3) defines “electricity shortfall” so that shortfalls in GB and Northern Ireland (NI) can be taken into account to determine whether the power should be exercised. Thus, the Secretary of State may exercise this power where there is a risk to security of electricity supplies in GB or NI. The provisions also enable the Department of Enterprise Trade and Investment (DETI) in Northern Ireland to suspend or modify the emissions limit in respect of fossil fuel plant located in NI (see definition of “appropriate authority” and “relevant plant” in subsection (12)).
323.Subsection (2) provides for the Secretary of State to direct that the emissions limit duty in respect of a plant in GB be suspended or modified for such period as is specified in that direction. Subsection (5) requires the Secretary of State to consult Scottish and Welsh Ministers before giving a direction under subsection (2).
324.A suspension or modification of the emissions limit duty will be effected by way of a direction to the relevant enforcing authorities who will be appointed pursuant to powers in section 60 and Schedule 5.
325.Subsection (6) requires the Secretary of State to lay before Parliament a copy of any direction together with a statement of the reasons for making the direction as soon as is practicable after giving a direction. A similar requirement applies to DETI, which is responsible for suspending or modifying the emissions limit in Northern Ireland, see subsection (8)).
326.Subsection (9) provides that a direction must be made in writing and that a direction may be varied or revoked by a further direction.
327.Subsection (11) requires the Secretary of State and DETI to issue, and have regard to, a statement of his or her policy in relation to making directions to suspend or modify the emissions limit duty.
Section 60: Monitoring and enforcement
328.Subsection (1) places a duty on the “appropriate national authority” to make arrangements for monitoring compliance with, and enforcement of, the emissions limit duty. The “appropriate national authority” is the Secretary of State in England, Scottish Minsters in Scotland, Welsh Minsters in Wales and the Department of the Environment in Northern Ireland (DoE) (see subsection (4)).
329.Subsection (2) enables the “appropriate national authority” to make regulations for the purpose of implementing the arrangements which are necessary for the purpose of monitoring and enforcing the emissions limit duty.
330.Subsection (3) requires that arrangements must also be made in the enforcement regulations for an enforcing authority to comply with a direction made under section 59 to suspend or modify the emissions limit duty.
331.Schedule 5 details the measures that may be included in the regulations made under section 60 about monitoring and enforcement of compliance with the emissions limit. These include the relevant national authority determining which body will be the enforcing authority, expected to be the Environment Agency in England, the Scottish Environmental Protection Agency, the Northern Ireland Environment Agency and the new Natural Resources Body for Wales.
332.Paragraph 1 of Schedule 5 details the matters that can be dealt with in the enforcement regulations. Among other things, they make provision for publication of information on compliance with the emissions limit; authorise the national authority to set up a charging regime; provide for enforcement of the duty through enforcement notices; and confer a right of appeal against decisions made by the enforcing body.
333.Away from enabling the enforcement regulations to contain provision which will facilitate an enforcing authority to perform its enforcement activities in paragraph 1, paragraph 2 describes the provision that can be made in relation to enforcement notices and the possible effect that enforcement notices can have. Paragraph 3 enables provision to be included dealing with the imposition of financial penalties in cases of a breach. Paragraph 4 provides that the enforcement regulations may contain consequential amendments to other legislation when such amendments are necessary to implement an emissions limit duty enforcement regime.
Section 61: Interpretation of Chapter 8
334.This section defines terms used in this Chapter. For example, the section defines “fossil fuel” as coal, lignite, peat, natural gas, crude liquid petroleum, bitumen or any substance which is produced directly or indirectly from these products for use as fuel and, when burnt, produces carbon dioxide.
Section 62: Regulations under Chapter 8
335.Subsection (1) provides that any orders or regulations made under this Chapter must be made by statutory instrument. Subsection (2) makes a similar provision in respect of regulations made by DETI and requires these regulations to be made by way of statutory rule.
336.Subsection (3) applies the affirmative resolution procedure to any regulations made under section 57. Subsection (4) subjects any enforcement regulations to the negative resolution procedure. Therefore, regulations containing provision for monitoring and enforcement are subject to the negative procedure. Where any regulations seek to make consequential amendments to primary legislation the regulations are subject to the affirmative resolution procedure. Equivalent procedures apply in respect of regulations or statutory rules made by the devolved administrations, see subsections (6), (7) and (8).
337.Subsection (10) respects the Northern Ireland devolution settlement and the fact that the policy in this Chapter relates to a matter within the legislative competence of the Assembly in Northern Ireland. Accordingly, the Secretary of State must obtain the consent of DETI before making provision under section 57 which will apply in Northern Ireland.
338.Subsection (11) requires the Secretary of State to consult Scottish and Welsh Ministers and such persons as Secretary of State thinks appropriate before making regulations under section 57(6) (interpretation of duty or applying duty with modifications to additional cases) or section 60(2) (monitoring and enforcement). Subsection (12) requires Scottish Ministers and Welsh Minsters to consult such persons as they think appropriate before making regulations under section 60 (monitoring and enforcement).
gasification plant can extract combustible gases e.g. hydrogen, from fossil fuels, which when burnt do not produce CO2.
