On 1 January 2008 a national Trading Scheme, under the National Emissions Reduction Plan (NERP), was introduced in the UK.
What is the National Emissions Reduction Plan (NERP)?
The NERP forms part of the Large Combustion Plants Directive (2001/80/EC) (LCPD). This directive sets minimum limits for emissions of SO2, NOx and dust to the air from LCPs with a thermal rating equal to or greater than 50 MW.
The new scheme will allow "existing" Large Combustion Plants (those first licensed before 1 July 1987) to trade their annual allowances for sulphur dioxide (SO2), nitrogen oxides (NOx) and dust (particulates) with other Large Combustion Plants (LCPs) within the Scheme.
Operators of existing LCPs were given the option by Defra to decide whether to be regulated under the annual mass-based NERP or the concentration based Emission Limit Values (ELVs) or to opt out by taking the limited life Derogation.
Ultimately 94 LCPs (operated by 40 different operators) opted for the NERP; 17 LCPs in Scotland, one in Northern Ireland and the remaining 76 in England and Wales.
The NERP trading scheme
The Large Combustion Plants (National Emission Reduction Plan) Regulations 2007 (SI 2007 No. 2325) provide the legal basis for the transfer of annual limits between participating LCPs within the UK NERP.
It will establish a register of participating LCPs which will record these transfers. We will maintain the register on behalf of the three UK regulators [Environment Agency, Scottish Environment Protection Agency and the Northern Ireland Environment Agency].
Further guidance on the operation of the Trading Scheme under the NERP will be put on the Regulators' websites. The Regulators consulted on their proposals for the operation of the Register and on the verification of the reports of annual mass emissions during the summer of 2007.