UK Law and Practice Contributed by: Ruth Knox and Julian Wolfgramm-King, Paul Hastings LLP
2.5 Bilateral/Multilateral Co-Operation Under the Paris Agreement 2.5.1 Article 6.2 – Internationally Transferred Mitigation Outcomes Co-Operation with Other Paris Agreement Parties The UK and EU maintain co-operation in respect of the discharge of their respective obligations under the Paris Agreement, having committed in May 2025 to link the EU Emissions Trading System and the UK Emissions Trading Scheme, which seeks to ensure allowances issued under both systems will be mutu - ally recognised for compliance and create the condi - tions for mutual exemptions from the respective Car - bon Border Adjustment Mechanisms. Framework for Operationalising Article 6 Paris Agreement The UK does not currently intend to use co-operative approaches that involve the use of internationally transferred mitigation outcomes (ITMOs) under Arti - cle 6 of the Paris Agreement towards its NDC. The UK intends to meet its NDC through domestic emissions reductions and removals. Nevertheless, it reserves the right to use co-operative approaches under Article 6 of the Paris Agreement. Such co-operative approach - es may include international emissions reductions or removals, such as Article 6.4 Emissions Reductions (“Article 6.4ERs”) or those which result from linking the UK Emissions Trading System to another emissions trading scheme. If the UK were to use co-operative approaches, such use would be accounted for in accordance with relevant decisions adopted by the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA). As such, the UK has adopted a conservative approach to the use of the Article 6.2 mechanism. In its submission to the UNFCCC on matters related to the Article 6.4 mechanism dated March 2023, the UK asked the CMA for more clarity on the connec - tion between the mechanism registry to the Article 6.2 international registry and other registries. In addition, the UK seeks communication standards to be devel - oped to support a clear central reconciliation process across registries in order to ensure correct accounting of ITMOs across registries. The UK has also clearly stated it is open to supporting a connection between the mechanism registry and other registries.
mate-related Financial Disclosure) Regulations 2022. While the Environmental Audit Committee does not hold executive power, it does have considerable influ - ence in public discourse through its scope which is to examine how government departments’ policies influ - ence the environment and sustainable development. Ofgem is responsible for administering the Contracts for Difference scheme, which incentivises investment in renewable energy by providing developers with price stability through guaranteeing a “strike price”. The Transition Finance Council is a newly created non- departmental public body whose aim is to leverage the UK’s existing strengths to become the best place in the world to credibly raise transition capital. The key governance and regulatory authorities respon - sible for regulatory enforcement in respect of climate change regulation are: • Financial Reporting Council (FRC); • Financial Conduct Authority (FCA); • Environment Agency (EA); • Office for Environmental Protection (OEP); and • Local authorities. The FRC is responsible for enforcement of climate- related financial disclosure regulation applicable to AIM and large private companies. The FCA is respon - sible for oversight and enforcement of the climate- related financial disclosure regulation enshrined in UK listing rules and the ESG Sourcebook applicable to companies listed on the London Stock Exchange and FCA-authorised firms respectively. The EA has oversight of the UK Emissions Trading Scheme, the Environment Act 1990, the Environmental Permitting (England and Wales) Regulations 2016, the Energy Savings Opportunity Scheme 2014 and flooding. The OEP has oversight of the implementation of the Environment Act 2021 which is the UK’s post-Brexit framework for environmental protection. Local author - ities support the enforcement of legislation protecting against greenwashing.
106 CHAMBERS.COM
Powered by FlippingBook