OT20415 | Corporation tax general: EU emissions trading scheme - phases III and IV

Phase III commenced in January 2013 and will finish on 31 December 2020.

This phase builds upon the previous two phases and is significantly revised to make a greater contribution to tackling climate change including: an EU-wide cap on the number of available allowances and an increase in auctioning of those allowances, as well as the UK’s scheme to lower compliance costs for small emitters and hospitals.

The largest issue for oil and gas companies operating in the UK and on the UKCS is likely to be that under current plans, for the first time companies will have to purchase allowances for emissions from electricity generation on offshore platforms.

Phase IV will commence on 1 January 2021 and finish on 31 December 2028.