Q1: When in “Spring 2021” does the Department expect to launch the Kyoto Protocol registry?
A1: We intend for the UK Kyoto Protocol (KP) registry to become available for users to register on the system from 1 May 2021. There will then be a process of verifying users’ identification and assigning them to their accounts that have been transferred from the EU system where they were previously held. We anticipate that the UK KP registry will be ready for trading KP units in June 2021.
Q2: Why was the KP registry not operationally ready at the end of the Transition Period? In contrast, the UK Emissions Trading Scheme Registry went live in January.
A2: The UK KP registry has been developed as part of the same IT build as the UK Emissions Trading Scheme (ETS) Registry. This system has been developed in a compressed timeframe and the decision was made to prioritise the UK ETS registry, given the larger number of businesses using it and the significantly higher value of ETS allowances compared to KP units. Additionally, the UK KP registry requires successful connection to all other international registries, and therefore has complex connectivity protocols to meet, including reconciling of all existing accounts. We have regularly updated account holders on plans and timings for the new KP Registry.
Q3: What does it mean for businesses if they have to open accounts in other countries’ registries while the UK KP registry is not ready — how onerous and costly is this? Para 12.3 refers to minimal costs as there is no policy change but will there be costs from businesses from the gap and the transition and from having to move to another country’s registry?
A3: Businesses are not required to open accounts in other countries’ registries — this is optional if businesses wish to trade KP units during the period that the UK KP registry is offline. Should they wish to do so, the cost and process to register for opening an account in another country’s registry varies from administrator to administrator. We have no evidence to suggest that any businesses with accounts in the UK KP registry have taken this step. Given the short period that the UK KP registry is unavailable, and the low value of KP units, we understand from previous stakeholder engagement that most businesses are content to wait until the new UK system is ready.
Q4: Did any of the businesses that were informed (para 10.1) raise concerns?
A4: No, we have not received any complaints from businesses affected. Businesses have received regular communications on plans for the new KP Registry, timings and implications, and are able to contact the Environment Agency (the national administrator of the UK KP registry) if they have any concerns, though none have been received to date. Businesses were informed in good time through stakeholder notices on gov.uk what impact this change would have on them.
Q5: Could you briefly set out how the UK ETS Registry that was established by earlier Regulations and the KP registry fit into the overall system? Are these two registries linked?
A5: The UK KP registry has been developed as part of the same IT build as the UK Emissions Trading Scheme (ETS) Registry, and the two systems share similar IT functionality. However, the two Registries are servicing two distinct policies — KP units cannot be used in the UK ETS, and UK ETS allowances cannot be traded on the UK KP registry. Under the Kyoto Protocol regime, the UK must maintain a KP registry to hold and trade Kyoto units and demonstrate compliance with the Kyoto Protocol.
2 March 2021