Environment Report 2016

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The Greenhouse Gas Regulations 2012 implement the requirements of the EU ETS in the UK. The regulations
stipulate that participants must hold a permit to emit GHGs. Amonitoring and reporting planmust also be followed,
which is approved by BEIS.
The EU ETS works on a ‘cap and trade’ basis. A ‘cap’ or limit is set on the total GHG emissions allowed by all
participants covered by the scheme and this cap is converted into tradeable emission allowances. An allowance
is a tradeable commodity equal to one tonne of carbon. For each installation, allowances must be surrendered to
the Environment Agency equal to the total amount of emissions generated each year. Participants can surrender
freely allocated allowances, buy allowances (EU Allowances) from the market and/or undertake measures to
reduce emissions68.
The Carbon Reduction Commitment (CRC) stipulates that organisations using large amounts of energy must record
and annually publish information on their energy usage, with a view to improving energy efficiency and reducing
CO2 emissions. The CRC is designed to reduce CO 2 emissions that are not already covered by the EU ETS. For the
offshore oil and gas industry, CRC is mainly applicable to onshore offices. Participants must purchase allowances
from the government or the secondary market (where a trader or other participant offers allowances for sale) and
surrender allowances to the Environment Agency equal to the total amount of emissions generated69.
The Energy Savings Opportunity Scheme Regulations 2014 implement the requirements of the EU Energy
Efficiency Directive in the UK. This scheme stipulates that all businesses classified as large undertakings must
complete an assessment of their total energy usage and carry out audits to identify energy-saving opportunities.
Phase I was completed by December 201570.
The Offshore Combustion Installations (Prevention and Control of Pollution) Regulations 2013 (PPC Regulations)
transpose the relevant provisions of the EU IED. Applicable installations must be run in accordance with a permit
issued under these regulations. This includes undertaking a monitoring plan, agreed with BEIS for NOX and other
nitrogen compounds, SO2 and other sulphur compounds, CO, and unburned hydrocarbons. Most installations are
also required to undertake an energy assessment to ensure that the installation is being run in the most energy
efficient manner that is financially viable71.
The release of ozone-depleting substances is controlled by European Commission Regulation No 744/2010
amending No 1005/2009 with regard to the critical use of halons. Operators of refrigeration and air-conditioning
systems, heat pumps and fire-protection equipment must prevent leaks of controlled substances (i.e. halons,
CFCs, HCFCs and F-gases) and repair detectable leakages as soon as possible.
VOC emissions are controlled through the requirement for consent to vent applications under the Energy Act
1976. Applications require medium- and long-term plans for reducing venting.
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