New F gas registration requirements will apply in the event of a no deal Brexit on 29 March 2019. Businesses that produce, supply, import, export or use F gas or other ozone-depleting substances (ODSs) and businesses that manufacture or import F gas or ODS-containing equipment will be subject to a new UK registration system.
Urgent action is needed for EU-based businesses. If you are currently placing a certain quantity of hydrofluorocarbons (HFCs) on the UK market from the EU, you will need to register by 12 April 2019 to obtain a UK quota. Urgent action is also required for certain businesses that have not placed HFCs on the UK market from 2015 to 2017 and for those requiring additional UK quota.
The Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019 (currently being considered by Parliament) will transfer most of the current requirements of the EU F Gas Regulation and the EU ODS Regulation into UK law. This means that the UK will continue to restrict F gas and ODSs and use the same schedule as the EU to phase down HFCs by 79 per cent by 2030.
UK F gas quotas will follow the same phase-down steps as the EU quotas and use of the gases will still be restricted.
The new quota system
Most of the rules for F gas and ODSs will not change, but the quota systems will. If the UK leaves the EU without a deal, the UK will, from 30 March 2019 onwards, leave the EU F gas quota system and have its own quota system. UK businesses will have to use the new UK system for reporting. If you are affected, you will need to apply for a UK quota to place F gases and ODSs on the UK market as well as an EU quota to place these on the EU market.
The Environment Agency (EA) will manage the new UK F gas system including providing a UK HFC quota allocation which affected businesses will use to (1) apply for a UK quota and (2) report on their activities.
Who is affected?
This change affects you if you:
- produce, supply, import, export or use bulk F gas or ODSs; and/or
- manufacture or import equipment containing F gas or ODSs.
As of 30 March 2019, you will need a UK quota if your business places HFCs equivalent to 100 tonnes or more of carbon dioxide on the UK market per year.
How to register
The EA will automatically register current quota holders on the new UK F gas system. You are a current quota holder (also known as incumbent) if:
- you put HFCs on the UK market legally in 2015, 2016 or 2017;
- you provided data to the EA giving the quantities of HFCs you placed on the UK market; and
- your business is established in the UK or you have a UK representative.
Once you are registered, the EA will contact you at the end of February 2019 to tell you how much UK quota you will receive for the period 30 March to 31 December 2019. This will be the amount of HFCs you can place on the market in this period. From 2020 onwards, you will receive a UK quota automatically based on your UK reference value and a notification each year of your allocation for the following year.
If you are a new entrant quota holder (e.g. if you did not place HFCs on the UK market in the year 2015, 2016 or 2017 or if you are a current quota holder that needs additional quota), you must register on the UK F gas system yourself before Friday 12 April 2019. You can do so here.
The EA will then tell you the amount of UK quota you have been allocated for the period 30 March to 31 December 2019. This will be the amount of HFCs you can place on the market in this period. It is important to bear in mind that you may be allocated less quota than you applied for if the total amount that applicants request is more than the reserve. If you had new entrant quota in 2018, the amount of quota you get may also be different from the EU quota you previously had.
From 2021 and every three years after, new entrants will become incumbent quota holders if they placed HFCs on the UK market and have reported the quantities in the UK reporting system. The EA will then issue new quota holders with a UK reference value, which will automatically entitle them to a UK quota in future years.
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