Opt out of the UK ETS if your installation is an ultra-small emitter
How to opt out of the UK Emissions Trading Scheme (UK ETS) and meet your emissions targets if your installation is an 'ultra-small emitter.'
You can opt out of the UK Emissions Trading Scheme if your installation emits less than 2,500 tonnes of carbon dioxide equivalent (CO2eq) in the relevant period.
You will need to register your installation as an ‘ultra-small emitter’ (USE). You must continue to monitor your emissions and notify the regulator if your emissions exceed the agreed threshold.
This guidance tells you:
- how to register your installation as an USE
- how to comply with your emissions targets as an USE
- what to do if your installation no longer qualifies as an USE
Aircraft operators cannot apply to register as ultra-small emitters. Read separate guidance for aircraft operators with low emissions.
Eligibility
Eligibility for the 2021 to 2025 allocation period.
Your installation is classed as an USE if it is included in the ultra-small emitter list for the 2021 to 2025 allocation period.
There will be no new USE’s during this allocation period.
Installations on the ultra-small emitters list for 2021 to 2025 had their greenhouse gas emissions permit or excluded installation emissions permit revoked in December 2020, as a permit is no longer required.
Eligibility for the 2026 to 2030 allocation period
Your installation is eligible if:
- your installation’s reportable emissions are 2,500 tonnes of CO2eq or below in scheme years 2021, 2022 and 2023
- you were carrying out a regulated activity at your installation on or before 1 January 2021
How to apply
Applications for the 2021 to 2025 allocation period are closed.
You can apply for the 2026 to 2030 allocation period from 1 April 2024.
To apply for the 2026 to 2030 allocation period, you will need to submit the following to your regulator:
- details of your installation, including details of any UK ETS permit in force
- evidence that your installation meets the eligibility criteria and supporting information
Evidence of reportable emissions must be verified before being submitted to your regulator. The evidence of historic reportable emissions must be verified as satisfactory in accordance with the Verification Regulation as modified by the UK ETS Order, or may be self-verified, if your installation was a hospital or small emitter in the 2021 to 2025 allocation period.
You must submit your application between 1 April and 30 June 2024. Details of this process will be made available closer to these dates.
After you have submitted your application
Once you submit your application, your regulator will make a preliminary assessment of whether your installation meets the conditions required to be an USE.
Your regulator will then send this preliminary assessment to the UK ETS authority for a final assessment. If the UK ETS authority considers that the installation meets the criteria, it will include it in the ultra-small emitter list for 2026-2030.
If your installation is included in the list, it will be a USE for the 2026 to 2030 allocation period. This list will be published by the UK ETS authority by 30 April 2025.
The regulator will then revoke any existing greenhouse gas emissions permit or hospital or small emitter permit.
You do not need any type of UK ETS permit during the period in which your installation is an USE.
How to comply with your emissions targets
You must monitor your emissions and notify your regulator if you emit more than 2,500 tonnes of CO2eq in any scheme year.
To monitor your emissions, you must follow the methodology set out in your monitoring plan. Your plan must be kept up to date in line with the provisions in the UK ETS Order and must ensure this remains fit for purpose.
If your installation no longer qualifies as an ultra-small emitter
Your installation cannot voluntarily cease to be an USE during the allocation periods.
Your installation will no longer be an USE if its reportable emissions exceed 2,500t CO2eq in either:
- any of the 2021 to 2023 scheme years in relation to the 2021-2025 allocation period
- any of the 2026 to 2028 scheme years in relation to the 2026-2030 allocation period
If your installation ceases to be an USE, you must notify your regulator by 31 March of that scheme year. If you do not, you will be liable to a civil penalty.
Your regulator will then send you a notice requiring you to either:
- join the UK ETS main scheme
- join the Hospital and Small Emitter scheme (if you meet the eligibility criteria)
You must then apply for either a greenhouse gas emissions permit or a hospital or small emitter permit.
You will remain liable for any unpaid penalties and any further sanctions applied for non-payment of those penalties arising from your time as an USE.