Stationary Installations (Amendment) Regulations, 2019

L.N. 268 of 2019

MALTA RESOURCES AUTHORITY ACT

(CAP. 423)

European Union Greenhouse Gas Emissions Trading Scheme for

Stationary Installations (Amendment) Regulations, 2019

IN EXERCISE of the powers conferred by article 28 of the Malta

Resources Authority Act, the Minister for the Environment,

Sustainable Development and Climate Change, after consultation with

the Malta Resources Authority, has made the following regulations:-

The title of these regulations is the European Union

Greenhouse Gas Emissions Trading Scheme for Stationary

Installations (Amendment) Regulations, 2019 and these regulations

shall be read and construed as one with the European Union

Greenhouse Gas Emissions Trading Scheme Regulations, 2013,

hereinafter referred to as "the principal regulations".

The main title of the principal regulations shall be

substituted by the following

"EUROPEAN UNION GREENHOUSE GAS EMISSIONS

TRADING SYSTEM FOR STATIONARY INSTALLATIONS

REGULATIONS".

Regulation 1 of the principal regulations shall be

substituted by the following

"1. (1) The title of these regulations is the European

Union Greenhouse Gas Emissions Trading System for Stationary

Installations Regulations".

(2) These regulations provide for the implementation in

Malta of the European Union system for greenhouse gas

emissions allowance trading, established by Directive 2003/87/

EC, for activities listed in Schedule 1 to these regulations, for the

period commencing 1st January, 2013, and any subsequent

periods.

(3)

These regulations transpose

-

Directive 2003/87/EC;

-

Directive 2004/101/EC amending Directive

2003/87/EC;

-

Directive 2008/101/EC amending Directive

2003/87/EC;

-

Directive

2009/29/EC

amending

Directive

2003/87/EC;

-

Decision (EU) 2015/1814 amending Directive

2003/87/EC;

-

Regulation

(EU)

2017/2392

amending

Directive 2003/87/EC; and

-

Directive (EU) 2018/410 amending Directive

2003/87/EC.

Regulation 2 of the principal regulations shall be amended Amends

regulation 2 of

as follows

the principal

regulations.

(a) immediately after the definition "confidential

information", there shall be added the following new definition

" "Decision (EU) 2015/1814" means Decision (EU)

2015/1814 of the European Parliament and of the Council

of 6 October 2015 concerning the establishment and

operation of a market stability reserve for the Union

greenhouse gas emission trading scheme and amending

Directive 2003/87/EC;";

(b) the definition "Directive 2003/87/EC" shall be

substituted by the following definition

" "Directive 2003/87/EC" means Directive 2003/87/

EC of the European Parliament and of the Council of 13

October 2003 establishing a system for greenhouse gas

emission allowance trading within the Union and amending

Council Directive 96/61/EC;";

(c) immediately after the definition "Directive 2003/87/

EC" there shall be added the following new definitions

" "Directive 2004/101/EC" means Directive 2004/

101/EC of the European Parliament and of the Council of

27 October 2004 amending Directive 2003/87/EC

establishing a scheme for greenhouse gas emission

allowance trading within the Community, in respect of the

Kyoto Protocol’s project mechanisms;";

"Directive 2008/101/EC" means Directive 2008/101/

EC of the European Parliament and of the Council of 19

November 2008 amending Directive 2003/87/EC so as to

include aviation activities in the scheme for greenhouse gas

emission allowance trading within the Community;";

(d) immediately after the definition "Directive 2009/31/

EC", there shall be added the following new definition

" "Directive (EU) 2018/410" means Directive (EU)

2018/410 of the European Parliament and of the Council of

14 March 2018 amending Directive 2003/87/EC to enhance

cost-effective emission reductions and low-carbon

investments, and Decision (EU) 2015/1814;";

(e) immediately after the definition "emission reduction

unit", there shall be added the following new definition

" "EU ETS" means the European Union Emissions

Trading System established by Directive 2003/87/EC;";

(f) the definition "greenhouse gases" shall be substituted

by the following definition

" "greenhouse gases" means the gases listed in

Schedule 2 and other gaseous constituents of the

atmosphere, both natural and anthropogenic, that absorb

and re-emit infrared radiation;";

(g) the definition "new entrants" shall be substituted by

the following definition

" "new entrant" means any installation carrying out

one or more of the activities listed in Schedule 1, which has

obtained a greenhouse gas emissions permit for the first

time within the period starting three months before the date

for submission of the list pursuant to regulation 11, and

ending three months before the date for submission of the

subsequent list pursuant to regulation 11;";

(h) immediately after the definition "Regulation (EC) No

765/2008", there shall be added the following new definition

" "Regulation (EU) 2017/2392" means Regulation

(EU) 2017/2392 of the European Parliament and of the

Council of 13 December 2017 amending Directive 2003/

87/EC to continue current limitations of scope for aviation

activities and to prepare to implement a global market-

based measure from 2021;"; and

(i) the definition "Union registry" shall be substituted by

the following definition

" "Union registry" means the registry established and

maintained in accordance with Article 19 of Directive

2003/87/EC for the execution of processes pertaining to the

maintenance of holding accounts and the allocation,

surrender and cancellation of allowances;".

Regulation 3 of the principal regulations shall be Substitutes

regulation 3 of

substituted by the following

the principal

regulations.

"3. These regulations shall apply to operators of

stationary installations situated in the territory of Malta and

carrying out one or more activities listed in Schedule 1 resulting

in emissions of the greenhouse gases specified in respect of those

activities in Schedule 1, and to any other relevant legal bodies on

which these regulations put any obligations.".

Paragraph (d) of sub-regulation (3) of regulation 5 of the Amends

regulation 5 of

principal regulations shall be substituted by the following

the principal

regulations.

"(d) the raw and auxiliary materials, the use of which, in

activities listed in Schedule 1 to be carried out in the installation,

is likely to lead to emissions of the greenhouse gases specified in

respect of those activities in Schedule 1;".

Regulation 6 of the principal regulations shall be amended Amends

regulation 6 of

as follows

the principal

regulations.

(a) sub-regulation (1) thereof shall be substituted by the

following

"(1) The Authority shall issue a greenhouse gas

emissions permit granting authorization to emit greenhouse

gases from all or part of an installation for which the

application for a permit is made, if it is satisfied that the

operator of the installation is capable of complying with the

requirements of these regulations and the conditions of the

permit. A permit shall be issued within a period of ninety

days from the date on which the Authority received the

application containing a complete set of information in

accordance with sub-regulation (3) of regulation 5, unless

otherwise agreed in writing between the operator and the

Authority."; and

(b) sub-regulation (4) thereof shall be substituted by the

following

"(4) The Authority may, at any time, review a

greenhouse gas emissions permit issued to an operator of

an installation and make amendments to the permit as

appropriate and issue an updated permit

Provided that it shall inform the operator

covered by the permit of such amendments as early as

possible prior to the issuance of an updated permit.".

Sub-regulation (1) of regulation 7 of the principal

regulations shall be substituted by the following

"(1) The operator of an installation for which a

greenhouse gas emissions permit has been issued shall notify the

Authority of

(a) any changes planned

in

the

nature

or

functioning of the installation; or

(b) any extension or reduction of the capacity of the

installation; or

(c) in the case of a permit covering more than one

installation on the same site operated by the same operator,

any instance where one or more installations cease carrying

out all of the activities listed in Schedule 1 covered by the

permit but the operator continues to carry out at least one

activity in one installation under that permit

Provided that any such notification must be

made in writing at least one hundred and twenty days prior

to such change in the nature or functioning of the

installation, or extension or reduction of capacity of the

installation, or the one or more installations ceasing

carrying out of activities listed in Schedule 1, effectively

taking place.".

Regulation 11 of the principal regulations shall be amended

as follows

(a) sub-regulation (1) thereof shall be substituted by the

following

"(1) The Authority shall determine the quantity of

free Chapter III allowances to be allocated to an installation

eligible to a free allocation of Chapter III allowances

pursuant to Directive 2003/87/EC. Such an allocation shall

be determined in accordance with Directive 2003/87/EC

and relevant decisions and regulations adopted by the

Commission pursuant to Directive 2003/87/EC.";

(b) sub-regulation (7) thereof shall be substituted by the

following

"(7) The Authority shall, by 30th September, 2019,

submit to the Commission a list of installations covered by

these regulations for the period of five years beginning on

1st January, 2021, including free allocations as determined

in accordance with this regulation. The Authority shall

submit to the Commission lists of installations for each

subsequent period of five years every five years

thereafter."; and

(c) immediately after sub-regulation (7) thereof, there

shall be added the following new sub-regulations

"(8) The Authority may, where applicable, request

from an operator of an installation information it deems

appropriate in accordance with relevant decisions and

regulations adopted by the Commission pursuant to

Directive 2003/87/EC.

(9) Upon approval by the Commission of the lists

submitted to the Commission pursuant to sub-regulation

(7), the Authority shall ensure that the lists of installations,

including any free allocation for each installation, are

published.".

Regulation 14 of the principal regulations shall be amended Amends

regulation 14 of

as follows

the principal

regulations.

(a) sub-regulation (1) thereof shall be substituted by the

following

"(1) The Authority shall, by 28th February of each

year, issue the quantity of free Chapter III allowances that

are to be allocated for that year to each installation included

in the list referred to in sub-regulation (8) of regulation 11,

as determined in accordance with regulation 11

Provided that the allowances allocated to each

installation are issued to the operator holding account

opened in respect of that installation in accordance with

regulation 13

Provided further that no allowances may be

issued to an installation whose inscription in the list

referred to in sub-regulation (8) of regulation 11 has not

been approved by the Commission.";

(b) sub-regulation (3) thereof shall be substituted by the

following

"(3) Where –

(a) an installation has ceased its operations,

unless the operator demonstrates to the Authority that

this installation will resume production within a

specified and reasonable time; or

(b) a permit has been changed, in accordance

with regulation 7, in such a way that it no longer

applies to an installation; or

(c) a permit has been

surrendered

in

accordance with regulation 9; or

(d) a permit has been revoked in accordance

with regulation 10, the Authority shall inform the

national registry administrator. The national registry

administrator shall ensure that no further allowances

are issued to the operator in respect of an installation

subject to any of the conditions under this sub-

regulation, for the first year after the year when the

installation ceases its operations, or the change in the

permit, the surrender of the permit or the revocation

of the permit has come into effect, and for subsequent

years.";

(b) sub-regulation (4) thereof shall be substituted by the

following

"(4) Chapter III allowances issued in accordance

with sub-regulation (1) in respect of the period beginning

1st January, 2013 and subsequent periods shall be valid

indefinitely. Allowances issued as from 1st January, 2021

in a ten-year period shall be valid for emissions from the

first year of that period onwards."; and

(d)

sub-regulations (5) and (6) thereof shall be deleted.

Regulation 16 of the principal regulations shall be amended Amends

regulation 16 of

as follows

the principal

regulations.

(a) sub-regulation (2) thereof shall be substituted by the

following

"(2) An operator of an installation shall submit to

the Authority an annual report on the emissions from that

installation for a monitoring year by not later than 31st

March of the subsequent year.";

(b) sub-regulation (3) thereof shall be substituted by the

following

"(3) The report submitted by an operator of an

installation pursuant to sub-regulation (2) shall be verified

by a verifier in accordance with

(a)

the principles set out in Schedule 4; and,

(b) relevant decisions and regulations

adopted by the Commission pursuant to Directive

2003/87/EC; and

(c) any other requirements made by the

Authority in respect of verification of annual

emission reports for emissions from installations.

The verifier shall issue a verification report.";

(c) sub-regulation (4) of thereof shall be substituted by

the following

"(4) A verification report shall be submitted by the

operator of an installation to the Authority with an annual

emissions report submitted. The operator shall also enter

the amount of emissions reported in the verified annual

emissions report for a monitoring year into the Union

Registry, by 31st March of the subsequent year."; and

(d) sub-regulation (6) thereof shall be substituted by the

following

"(6) The operator of an installation for which an

annual emissions report is to be verified shall notify the

Authority and the National Accreditation Board – Malta of

the planned date and place of the verification and the

identity of the verifier who will perform the verification, by

not later than thirty days prior to the date when the

verification is to be performed.".

Regulation 17 of the principal regulations shall be amended

as follows

(a) sub-regulation (2) thereof shall be substituted by the

following

"(2) The Authority shall, on the basis of the

information included in the annual emissions report and the

verification report submitted in accordance with regulation

16 and its own checks, without undue delay, determine

whether it can accept the submitted annual emissions

report. The Authority shall not accept a report of annual

emissions which has not been verified as satisfactory or for

which a verification report has not been submitted. The

Authority shall inform the operator, in writing or through

other documented means, of its decision. Where it deems

necessary, the Authority may require the submission of a

revised annual emissions report. The revised annual

emissions report shall be verified in accordance with

regulation 16. Where necessary the operator shall also

update the amount of emissions entered into the Union

Registry.";

(b) sub-regulation (3) thereof shall be substituted by the

following

"(3) Where, in respect of any monitoring year, an

operator of an installation does not submit a verified annual

emissions report in accordance with regulation 16, or where

it is deemed that the operator has not submitted an annual

emissions report which is in accordance with the

requirements set out in regulation 16, the Authority may,

unless there is written agreement between the Authority

and the operator providing otherwise, itself determine the

emissions for activities performed in that installation for

that monitoring year. The Authority shall use best available

data and ensure that a conservative estimate is made that

does not underestimate emissions. When annual emissions

are determined under this sub-regulation, the Authority

shall consider the requirements set out in Schedules 3 and

4

Provided that the Authority shall notify the

operator of the installation of the emissions as determined

and the methodology used to determine such emissions

Provided further that the Authority shall enter

the amount of emissions as determined in accordance with

this sub-regulation into the Union Registry."; and

(c) immediately following sub-regulation (3) thereof

there shall be added the following new sub-regulations

"(4) Where the verification report submitted with an

annual emissions report states outstanding non-

conformities or recommendations for improvements, the

operator of the installation shall submit to the Authority, by

not later than 30th June of the year when the verification

report is issued by the verifier, an improvement report

describing how and when the operator has rectified or plans

to rectify the non-conformities identified by the verifier and

to implement recommended improvements.

(5) The Authority shall, within a reasonable time,

approve the improvement report and inform the operator of

the installation of its approval. Where it deems necessary,

the Authority may require the submission of a revised

improvement report.".

Regulation 19 of the principal regulations shall be amended Amends

regulation 19 of

as follows

the principal

regulations.

(a) sub-regulation (1) thereof shall be substituted by the

following

"(1) For the period ending 31st December, 2020, an

operator of an installation shall, by 30th April each year,

surrender a number of allowances, other than Chapter II

allowances, that is equal to the total emissions from that

installation during the preceding calendar year as verified

in accordance with regulation 16, or as determined by the

Authority in accordance with regulation 17. An operator of

an installation shall not surrender Chapter II allowances for

the period ending 31st December, 2020.";

(b) immediately following sub-regulation (1) thereof

there shall be added the following new sub-regulations

"(1a) For the period starting 1st January, 2021, and

subsequent periods, an operator of an installation shall, by

30th April each year, surrender a number of allowances that

is equal to the total emissions from that installation during

the preceding calendar year as verified in accordance with

regulation 16, or as determined by the Authority in

accordance with regulation 17. For the period starting 1st

January, 2021, and subsequent periods, an operator of an

installation shall not be prohibited from surrendering

Chapter II allowances.

(1b) Allowances issued by a competent authority of

another Member State shall be recognized by the Authority

for the purpose of meeting the obligations of an operator of

an installation under sub-regulations (1) and (1a).

(1c) Where necessary, and for as long as is

necessary, in accordance with relevant decisions and

regulations adopted by the Commission pursuant to

Directive 2003/87/EC, an operator of an installation shall

not surrender allowances that are issued by a Member State

in respect of which there are obligations arising from

Directive 2003/87/EC which are lapsing.";

(c) sub-regulation (6) thereof shall be substituted by the

following

"(6) The Authority shall publish the name of any

operator who is in breach of the requirement to surrender

sufficient allowances under sub-regulations (1) or (1a).";

(d) sub-regulation (7) thereof shall be substituted by the

following

"(7) An operator who does not surrender sufficient

allowances as required under sub-regulations (1) or (1a) to

cover its emissions during the preceding year, or who has

not yet surrendered allowances to cover its emissions

during any previous year, shall be liable to the imposition

of an administrative fine of one hundred euro (€100) for

each tonne of carbon dioxide equivalent emitted for which

the operator has not surrendered allowances."; and

(e) sub-regulation (10) thereof shall be substituted by the

following

"(10) Where an operator of an installation fails to

surrender allowances in accordance with sub-regulations

(1) or (1a), the national registry administrator shall not

allow the transfer of allowances or any other accounting

units out of the operator holding account opened in respect

of that installation until the operator complies with the

requirement to surrender allowances

Provided that the national registry administrator

shall not prevent the surrender of allowances in accordance

with sub-regulations (1) and (1a) or the cancellation of

allowances in accordance with sub-regulation (4), or the

issuance of allowances in exchange for CERs or ERUs in

accordance with regulation 20.".

Regulation 24 of the principal regulations shall be Substitutes

regulation 24 of

substituted by the following

the principal

regulations.

"24. The revenue from the auctioning of allowances, after

deducting the audited costs to administer the EU ETS agreed

between the Minister responsible for finance and the Authority,

shall accrue to the Consolidated Fund.".

Immediately after regulation 25 of the principal Adds new

regulations to

regulations, there shall be added the following new regulations

the principal

regulations.

" Exclusion of small

(1) Where an operator of an installation

installations subject

has reported, for that installation, verified emissions of

less than twenty five thousand (25,000) tonnes of

carbon dioxide equivalent, and where that installation

carried out combustion activities, has a rated thermal

input below thirty five (35) MW, excluding emissions

from biomass, in each of the three years preceding a

notification under sub-regulation (8) of regulation 11,

the Authority may, after consultation with the operator

of the installation and the Minister, propose to exclude

that installation from the EU ETS

Provided that the installation shall be

subject to equivalent measures that will achieve a

contribution to emissions reductions that is equivalent

to these regulations

Provided further that arrangements for

monitoring of emissions are in place to assess whether

the installation to which the equivalent measures apply

emits twenty-five thousand (25,000) tonnes or more of

carbon dioxide equivalent, excluding emissions from

biomass, in any one calendar year

Provided further that the Authority may

establish simplified monitoring, reporting and

verification measures for an installation to which

equivalent measures apply if the average annual

verified emissions of that installation between 2008 and

2010 are below five thousand (5,000) tonnes a year.

(2) The Authority shall notify the Commission

of an installation for which an exclusion in accordance

with regulation (1) is proposed, before the list of

installations pursuant to sub-regulation (8) of regulation

11 is to be submitted or, at the latest, when that list is

submitted to the Commission, specifying the equivalent

measures applying to that installation. The exclusion is

deemed approved if the Authority does not receive an

objection from the Commission in accordance with

Directive 2003/87/EC.

(3) The installation shall be excluded following

the surrender of allowances in respect of the period

during which that installation is in the EU ETS. The

Authority shall, where applicable, no longer issue free

allowances to that installation pursuant to regulation

14. (4) Where an installation excluded in

accordance with sub-regulation (1) emits twenty-five

thousand (25,000) tonnes or more of carbon dioxide

equivalent, excluding emissions from biomass, in any

one calendar year, or the equivalent measures applying

to that installation are no longer in place, the

installation shall be reintroduced into the EU ETS,

starting from the first calendar year following the year

when the installation emits twenty-five thousand

(25,000) tonnes or more of carbon dioxide equivalent,

excluding emissions from biomass. An installation

which has been reintroduced into the EU ETS shall stay

in the EU ETS for the rest of the period referred to in

regulation 11 during which it is reintroduced.

(5) When an installation is reintroduced into the

EU ETS pursuant to sub-regulation (4), any allowances

to be allocated for free in accordance with regulation 11

shall be granted starting from the year when the

installation is reintroduced into the EU ETS. The

allowances to be allocated to that installation shall be

deducted from the quantity of allowances to be

auctioned pursuant to regulation 12.

(6) For installations which were not in the EU

ETS during the period from 2008 to 2012, the Authority

may apply monitoring, reporting and verification

requirements for determining emissions in the three

years preceding the year of a notification pursuant to

sub-regulation (2).

(7) The Authority shall ensure that the

notification to the Commission pursuant to sub-

regulation (2), a confirmation that arrangements for

monitoring of emissions of an installation excluded in

accordance with sub-regulation (1) are in place, and a

confirmation that if an installation excluded in

accordance with sub-regulation (1) emits twenty-five

thousand (25,000) tonnes or more of carbon dioxide

equivalent, excluding emissions from biomass, in any

one calendar year, that installation will be reintroduced

into the EU ETS, are made available to the public.

(8) The Authority may exclude a hospital from

the EU ETS

Provided that the hospital is subject to

equivalent measures that will achieve a contribution to

emissions reductions that is equivalent to these

regulations.

(1) Where an operator of an installation

Optional exclusion

emitting less than has reported, for that installation, verified emissions of

less than two thousand five hundred (2,500) tonnes of

carbon dioxide equivalent, disregarding emissions from

biomass, in each of the three years preceding a

notification under sub-regulation (8) of regulation 11,

the Authority may, after consultation with the operator

of the installation and the Minister, exclude that

installation from the EU ETS

Provided that the Authority shall notify the

Commission of such an installation before the list of

installations pursuant to sub-regulation (8) of regulation

11 is to be submitted or, at the latest, when that list is

submitted to the Commission

Provided further that arrangements for

monitoring of emissions are in place to assess whether

the installation emits two thousand five hundred (2,500)

tonnes or more of carbon dioxide equivalent,

disregarding emissions from biomass, in any one

calendar year.

(2) Where an installation excluded in

accordance with sub-regulation (1) emits two thousand

five hundred (2,500) tonnes or more of carbon dioxide

equivalent, disregarding emissions from biomass, in

any one calendar year, the installation shall be

reintroduced into the EU ETS, starting from the first

calendar year following the year when the installation

emits two thousand five hundred (2,500) tonnes or

more of carbon dioxide equivalent, disregarding

emissions from biomass.

(3) When an installation is reintroduced into the

EU ETS pursuant to sub-regulation (2), any allowances

to be allocated for free in accordance with regulation 11

shall be granted starting from the year when the

installation is reintroduced into the EU ETS. The

allowances to be allocated to that installation shall be

deducted from the quantity of allowances to be

auctioned pursuant to regulation 12.

(4) The Authority shall ensure that the

notification to the Commission pursuant to sub-

regulation (1), a confirmation that arrangements for

monitoring of emissions of an installation excluded in

accordance with sub-regulation (1) are in place, and a

confirmation that if an installation excluded in

accordance with sub-regulation (1) emits two thousand

five hundred (2,500) tonnes or more of carbon dioxide

equivalent, disregarding emissions from biomass, in

any one calendar year, that installation will be

reintroduced into the EU ETS, are made available to the

public.

(1) Where an operator of an installation

Optional exclusion

backup units which notified the Authority of a reserve or backup unit which

do not operate more

did not operate more than 300 hours per year in each of

the three years preceding a notification under sub-

regulation (8) of regulation 11, the Authority may, after

consultation with the operator of the installation and,

the Minister, exclude that unit from the EU ETS

Provided that the Authority shall notify the

Commission of such a unit before the list of

installations pursuant to sub-regulation (8) of regulation

11 is to be submitted or, at the latest, when that list is

submitted to the Commission

Provided further that arrangements for

monitoring of emissions are in place to assess whether

the reserve or backup unit has operated more than 300

hours in any one calendar year.

(2) Where a reserve or backup unit excluded in

accordance with sub-regulation 1 operates more than

300 hours in any one calendar year, the unit shall be

reintroduced into the EU ETS, starting from the first

calendar year following the year when the unit has

operated more than 300 hours.

(3) When a unit is reintroduced into the EU ETS

pursuant to sub-regulation (2), any allowances to be

allocated for free in respect of that unit in accordance

with regulation 11 shall be granted starting from the

year when the unit is reintroduced into the EU ETS.

The allowances to be allocated to that unit shall be

deducted from the quantity of allowances to be

auctioned pursuant to regulation 12.

(4) The Authority shall ensure that the

notification to the Commission pursuant to sub-

regulation (1), a confirmation that arrangements for

monitoring of the hours of operation of a unit excluded

in accordance with sub-regulation (1) are in place, and a

confirmation that if a unit excluded in accordance with

sub-regulation (1) operates more than 300 hours in any

one calendar year, that unit will be reintroduced into the

EU ETS, are made available to the public.".

16. The words "Community scheme" wherever they occur in Amends

Schedule 1 of the principal regulations shall be substituted by the Schedule

the principal

words "EU ETS".

regulations.

B

€1.53