Consultation outcome

Enforcement and sanctions policy updates to include UK ETS and CORSIA: response document

Updated 12 December 2024

1. Introduction

The Environment Agency is responsible for enforcing laws that protect the environment. We aim to use our enforcement powers efficiently and effectively to secure compliance.

Our current enforcement and sanctions policy (ESP) explains:

• the results we want to achieve
• the regulatory and penalty principles we uphold
• the enforcement and sanction options available to us
• how we make enforcement decisions
• the enforcement framework for the climate change schemes
• the control of mercury regime

The UK Emissions Trading Scheme (UK ETS) was established with effect from 1 January 2021, at the point the UK stopped participating in the EU Emissions Trading System (EU ETS).   

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) came into effect on 1 January 2019 and was transposed into UK law by the Air Navigation (Carbon Offsetting and Reduction Scheme for International Aviation) Order 2021.

2. How we ran the consultation

We needed to take account of the UK ETS and CORSIA and make minor consequential changes to the main part of our ESP to make reference to the schemes.

We also needed to update annex 2 of this policy which sets out the Environment Agency’s approach to applying climate change civil penalties.

We therefore asked for your views on the proposed:

• revisions to section A to take account of the UK ETS and CORSIA
• new section G for UK ETS
• new section H for CORSIA

We ran the formal public consultation on the Environment Agency’s Citizen Space website and on GOV.UK for 8 weeks from 21 May 2024 to 16 July 2024.

We provided the option to request a written copy and to respond by post if that was more suitable. We invited all operators in the UK ETS and CORSIA as well as stakeholders on our mailing lists, the UK ETS Authority, the Emissions Trading Group and all UK ETS and CORSIA regulators to comment on this consultation. The UK ETS Authority is made up of the UK, Scottish and Welsh Governments and Northern Ireland Department of Agriculture, Environment and Rural Affairs.

3. Summary of main findings and actions we will take

We received a small number of responses, 6 in total, which we fully considered. The responses included:

• 1 operator
• 1 university department
• 2 members of the public
• 1 from an international environmental organisation
• 1 did not provide that detail

Questions 1 to 6

These questions focused on respondent details and are not included in this response.

Next, we asked for views on our proposal to update our approach to determine the size of organisation using emissions for aircraft and aeroplane operators.

Q7. In relation to step 3 of the stepped approach in section A, do you agree with our proposal to replace the size of organisation categories for aircraft and aeroplane operators with categories linked to the size of aviation operation?

Summary of responses

• 3 – agreed
• 2 – it was not applicable
• 1 – did not answer

One who agreed noted this change to use CO₂ emissions is a more accurate reflection of the organisation’s carbon impact, relating to the purpose of the legislation and allows for changes or improvements to be measured more easily. Another who agreed noted this proposal will allow the scale of the penalties to reflect the scale of an operator’s CO₂ emissions, potentially an incentive to reduce emissions, it will enable assessment criteria to be applied equally to all regulated operators and removes the Environment Agency’s requirement to obtain reliable information on the turnover of aviation operators based outside the UK.

A comment was raised, repeated throughout the consultation responses, that this change may make the process more complex for organisations. It recommended a simplification of the system through the implementation of a standardised carbon accounting framework.

Our response

As noted in the consultation responses, this proposed change will relate the size of the aviation operation to the scale of the discretionary penalty imposed on an aircraft operator under the EU ETS and UK ETS, or an aeroplane operator under CORSIA.

We note the request for a simplification of the system through the implementation of a standardised carbon accounting framework. This is out of scope of the consultation. We will inform the UK ETS Authority of this request.

We will now implement the change to section A as set out in the consultation.

The next part of the consultation focused on section G. This section is new to the ESP and explains how we initially assess each UK ETS breach using our normal nature of the breach assessment and any other enforcement positions that apply.

Section G explains:

• our approach to mandatory penalties
• our penalty setting approach for UK ETS breaches where we cannot apply the stepped approach
• our approach to multiple breaches
• where we apply the stepped approach, how we normally assess the nature of the breach for each UK ETS breach
• our additional UK ETS enforcement positions
• where we may use enforcement or revocation notices as an alternative or in addition to civil penalties

Section G must be read with section A as this explains our general civil penalty setting approach for the climate change schemes.

We asked a series of questions about our proposed approach.

Q8. Do you agree with our proposals for section G1: The types of UK ETS civil penalties?

Summary of responses

• 2 – agreed
• 2 – neither agreed or disagreed
• 1 – disagreed
• 1 – did not answer

Those who neither agreed or disagreed noted that our approach depends on the nature of the breach. The breach of failure to surrender allowances and the failure to submit a verified Activity Level Change report are serious and should be penalised. But, for minor breaches, the Environment Agency should be more lenient.

In addition, a fixed sum works well to encourage businesses to comply with the UK ETS standards but a daily penalty risks imposing undue consequences on more vulnerable businesses. A daily penalty may result in a disproportionate cost to the business where an operator does not have the resource to calculate and prove compliance or rectify their processes if working outside their cap boundaries. The process can be long and expensive especially given the complexity of the current carbon accounting system and a reliance on consultancies to help with calculations. A daily penalty will add to this finance burden.  

The introduction of a UK carbon accounting framework will help to simplify carbon accounting, allowing businesses to easily comply with the UK ETS and support low emission industry.

The respondent who disagreed noted that, as the ability to apply civil penalties is limited to those set in the Greenhouse Gas Emissions Trading Scheme Order, the Environment Agency appears restricted in imposing daily penalties, so that the deterrent effect is limited.

Our response

The ESP sets out the approach we take to mandatory and discretionary penalties. Where the civil penalties are discretionary, our policy confirms that we will take account of all relevant factors, including culpability and the seriousness of a breach, before deciding whether to impose a penalty and the level of that penalty. Our discretion applies to the non-escalating part of the penalty and the daily penalty.

The legislation does restrict daily penalties to certain breaches. It would not be appropriate to impose a daily penalty where it is not possible to rectify a breach. The main purpose of the daily penalty is to incentivise compliance.

One respondent suggested that a carbon accounting framework is needed to guide businesses through the UK ETS process. We will inform the UK ETS Authority of this suggestion who have responsibility for policy development of the UK ETS.

We will now implement section G1 as set out in the consultation.

Q9. Do you agree with our proposals for section G2: Procedure for imposing penalties?

Summary of responses

• 4 – agreed
• 1 – disagreed
• 1 – did not answer

For those who agreed, informing operators that daily penalties may be applied was welcomed to allow an operator time to address the situation with a view to mitigate the situation. One respondent suggested that it may be helpful to specify the time between the initial notice and the notice of intent and to take account of the complexities of the scheme and size of the business in determining this period.

One respondent disagreed with the proposal, stating a potential for procedural duplication where we issue an initial notice (to start the daily penalty accruing) and a subsequent notice of intent, especially if the Environment Agency decides to waive or reduce the daily penalty, where it is discretionary.

One respondent did not answer.

Our response

We welcome suggestions to streamline our procedures. We will not include timescales in the ESP for the likely period between issuing an initial notice and notice of intent, as this is dependent on a number of factors. However, our notice of intent will not be issued until we know the total maximum penalty applicable in a particular case and will give sufficient time for the recipient to make representations before we impose any penalty.  

We do not believe it is procedural duplication to issue an initial notice followed by a notice of intent. The notices are issued for different purposes. The purpose of the initial notice is to inform a person that a potential daily penalty is accruing and to encourage them to comply with the outstanding obligation as quickly as possible. The notice of intent is subsequently issued when we know the total maximum penalty due to a person. At this point the person can make representations, which we will consider when determining the final penalty amount.

We will now implement section G2 as set out in the consultation.

Q10. Do you agree with our proposals in section G3: When and how the Environment Agency will apply discretion to UK ETS penalties?

Summary of responses

• 3 – agreed
• 1 – it was not applicable
• 1 – did not answer

One respondent agreed that this approach offers incentives for businesses to become small emitters, supporting the overall purpose of the scheme.

One disagreed with the inability to apply discretion to waive or reduce civil penalties for hospital or small emitters exceeding emission targets and ultra-small emitters exceeding the maximum emissions, whereas there is discretion for all cases other than failure to surrender sufficient allowances by the statutory deadline. This respondent also raised that the ability to apply discretion to reduce or waive a penalty should be restricted to instances of low or no culpability on the part of the organisation – for example, non-compliance due to an accident or rogue employee.

Our response

The Order states where the Environment Agency may apply discretion, so we are not able to change our overall approach to mandatory penalties. In relation to discretionary penalties, this ESP consultation sets out how we intend to apply our discretion. We consider all relevant factors in deciding whether to waive or reduce a penalty and we do not think it is fair to only consider culpability in making this decision.

Mandatory penalties are set in legislation where failure to comply will have the biggest impact on the integrity of the UK ETS, such as failure to surrender allowances equal to reportable emissions. Exceeding the emission targets for Hospital and small emitters and exceeding the relevant threshold for ultra-small emitters are comparable breaches and so mandatory penalties are prescribed in the legislation.

We will now implement section G3 as set out in the consultation.

Q11. Do you agree with our proposals in section G4: Multiple breaches?

Summary of responses

• 4 – agreed
• 1 – disagreed
• 1 – did not answer

Those in agreement indicated that, where there may be breaches in more than one area, as long as the penalty remains proportional to the breach, our proposed approach would be effective.

One respondent disagreed, raising it is a principle of justice that operators should be subject to the full range of penalties for every breach they are responsible for.

Our response

We consider that our approach to multiple penalties does ensure penalty setting is proportional to the breach. Our proposed policy says that we may waive one or more penalties if we consider that the largest penalty or penalties are sufficient to penalise the operator or aircraft operator and deter it and others from failing to comply in future.

We will now implement section G4 as set out in the consultation.

Q12. Do you agree with our proposals in section G5: Civil penalties for installations and aviation?

Summary of responses

• 1 – agreed
• 4 – neither agreed or disagreed
• 1 – did not answer

Where it was neither agreed or disagreed, generally there was agreement with our proposed approach.

For greenhouse gas emissions permits, the proposed level of penalties for major and minor breaches was welcomed. The maximum penalties seem high, increasing with the daily penalty, with a request to reduce the initial penalty and retain the daily penalty level. The issuing of a penalty itself is a deterrent and would do enough reputational damage to spur a person into taking remedial action and to put procedures in place to prevent reoccurrence. It is already an expense to ensure compliance in buying allowances, so although large fines will incentivise compliance, they appear excessive.

The penalties do not fully recognise the complexity of carbon accounting, particularly for those who have to employ carbon accounting consultants. For those who report with inaccuracies, particularly those reports verified by a third party, the time period of 10 days to rectify the mistakes should be extended.

The request to consider a carbon accounting framework was re-made.

Leniency should be given to new operators in the first year of reporting, to give the young business an opportunity to gain experience with the complex system of calculation and reporting.

It would be helpful to provide further clarity on the meaning of major and minor modifications of monitoring plans.

One respondent agreed that the penalties for operating without a permit should contain a total cost avoided element. In addition, the punitive element should be unlimited to ensure the penalty exceeds the value of any economic benefit derived from the non-compliance.

In relation to penalties following the breach of most permit conditions, there was a suggestion to deter non-compliance by removing the cap of the daily £500 penalty up to 90 days, to a maximum of £45,000 or set the non escalating penalty higher than £20,000 for breaches with a significant impact on the integrity of the scheme.

In relation to greenhouse gas emission permits and the penalty for a breach of the monitoring obligation, it is arguable that the scheme’s integrity could be undermined if reportable emissions of just under 50,000 tCO₂ are subject to a penalty threshold of 5% of emissions but, if just over this threshold, are subject to threshold of 2%. This discrepancy should be addressed by adding an intermediate threshold.

Our response

We note the responses on the values of the statutory maximum penalties and daily penalties. These figures are set in the legislation, so this is out of scope of the consultation and we will inform the UK ETS Authority of these responses.

We reviewed our approaches, including whether leniency should be given to new installations in the first year of operation. For the most serious breaches, we do not think it is appropriate to be more lenient in relation to this first year but we will consider all circumstances before deciding to impose a penalty.

We assume that the reference to the period of 10 working days is to our approach, in relation to the failure to submit an improvement report, that we will not normally impose a penalty if we receive the report within 10 working days of the deadline. On balance, we do consider that 10 working days is a reasonable timeframe. The priority must remain with meeting the original deadline. The permit conditions detail the requirements and reminders are issued via our stakeholder newsletters to ensure all operators are aware of compliance deadlines.

We note the request for a simplification of the system through the implementation of a standardised carbon accounting framework. This is out of scope of the consultation and we will inform the UK ETS Authority of this request.

Significant changes to monitoring plans are defined in Article 15(3) of the Monitoring and Reporting Regulation and clarified in our UK Emissions Trading Scheme for installations: how to comply guidance. Operators are encouraged to contact us when considering making changes to their operations if they are not able to determine if the change will be significant.

In relation to the punitive element of the operating without a permit penalty, this is an amount to ensure the penalty exceeds the value of any economic benefit obtained from the non-compliance. In setting this amount, we must have regard to a Secretary of State Direction which states that we may add to the total costs avoided element of the penalty the higher of 10% of the maximum amount of total costs avoided and £2,500. We consider this to be sufficient to ensure that the penalty exceeds the value of any economic benefit obtained as a result of the non-compliance.

In relation to the penalty for failure to monitor correctly, we considered different thresholds when developing our approach. The thresholds mentioned by the respondent are used to determine whether or not we will normally impose a penalty for this breach. We will consider whether the emissions affected by a breach are above or below the threshold for that category of installation. If they are below the threshold, we will not normally impose a penalty. If they are above the threshold, we will normally impose a penalty. The threshold does not affect the initial penalty amount. We consider that the thresholds are appropriate because they are a reasonable indication of the impact of the breach on the integrity of the scheme, but we will take all other relevant factors into account before deciding whether or not to impose a penalty and, if appropriate, the penalty amount.

We will now implement section G5 as set out in the consultation.

Q13. Do you agree with our proposals in section G6: Requirement to monitor emissions for installations?

Summary of responses

• 4 – agreed
• 1 – neither agreed or disagreed
• 1 – did not answer

Whilst agreeing, there is concern as to what the Environment Agency regards as prompt action, considering that remedial action due to unforeseen circumstances, where the reason for non-compliance was the obsolescence or equipment failure, may take months to bring back into service.

There was a request to simplify the legislation to align the different aspects of emissions monitoring to make it easier for businesses to comply.

One respondent also requested more clarity on what is considered a permissible deviation from monitoring at the tier stated in an operator’s approved plan, when it is not technically feasible.

Our response

Where the operator is not able to monitor as agreed in the approved monitoring plan, we consider directly with the operator what action is required to rectify the issue and the timescales for this action. It is difficult to predict all possible scenarios. As each situation is unique, we do not provide standardised guidance and encourage operators to contact us as soon as they are aware there may be difficulty to comply with their monitoring plan.

We will now implement section G6 as set out in the consultation.

Q14. Do you agree with our proposals in section G7: Enforcement notices?

Summary of responses

• 3 – agreed
• 2 – neither agreed or disagreed
• 1 – did not answer

It was recognised that reputable operators take notice of enforcement notices and will take corrective action or give details to the regulator where this is not possible.

It is presumed that the operator has been made aware of the breach and been given adequate amount of time to rectify the breach. The timescales should reflect the complexity of the carbon accounting system, especially if external consultants are utilised.

It was assumed that the non-escalating penalty of £20,000 is applied for each enforcement notice issued if there is more than one breach.

There was a suggestion to not cap the daily penalty at a maximum of £45,000 to allow the penalty to be applied for longer than 90 days.

Our response

If we issue an enforcement notice, it will set out the steps that must be taken to rectify the breach and will set a reasonable period for completion of those steps.

The penalty applies to failure to comply with each enforcement notice given.

The cap for the daily penalty at £45,000 is set in the Order. This is out of scope of the consultation and we will pass this feedback to the UK ETS Authority.

We will now implement section G7 as set out in the consultation.

Q15. Do you agree with our proposals in section G8: Revocation of permits?

Summary of responses

• 4 – agreed
• 1 – neither agreed or disagreed
• 1 – did not answer

Overall, it seems a fair approach, with a request to include an example of ‘exceptional circumstances’ where we may revoke a permit.  

Our response

We consider that the exceptional circumstances are unique to each operator, and so no example has been provided. The revocation of a permit as an enforcement response would only be taken if all other enforcement options had been exhausted, so we do not consider it helpful to include an example.

We will now implement section G8 as set out in the consultation.

The next part of the consultation focused on section H. This section is new to the ESP and explains how we initially assess each CORSIA breach using our normal nature of the breach assessment and any other enforcement positions that apply. Section H sets out:

• how we normally assess the nature of the breach
• our approach to multiple breaches
• our additional CORSIA enforcement positions

Section H must be read with section A as this explains our general civil penalty setting approach for the climate change schemes.

We asked a series of questions about the specifics of our proposed approach.

Q16. Do you agree with our proposals in section H1: Civil penalties?

Summary of responses

• 2 – agreed
• 2 – it was not applicable
• 1 – disagreed
• 1 – did not answer

There is agreement with the penalty process for CORSIA with fixed penalties helping to encourage aeroplane operators to comply. One respondent raised concern with daily penalties which may risk putting pressure onto businesses, especially smaller organisations. One respondent commented that the Order limits the ability to escalate penalties as there are limitations on when to apply the daily penalty, which may provide less of a deterrent.

There is a suggestion to introduce a standardised carbon accounting framework which will support organisations taking accurate measurements of their emissions.

Our response

The CORSIA scheme aims to reduce carbon emissions and its monitoring, reporting and, verifying requirements are set out in legislation and are reflected in the online systems aeroplane operators must use to comply. In addition, guidance and support from regulators is available to ensure aeroplane operators understand their obligations.

The suggestion to consider a carbon accounting framework is out of scope of the consultation and we will inform the Department for Transport (DfT) about these responses.

Our penalty setting approach for CORSIA in the ESP is consistent with requirements in the Air Navigation Order (ANO) and the approach applied in UK ETS.

We will now implement section H1 as set out in the consultation.

Q17. Do you agree with our proposals in section H2: Procedure for imposing penalties?

Summary of responses

• 2 – agreed
• 1 – neither agreed or disagreed
• 2 – it was not applicable
• 1 – did not answer

Informing aeroplane operators that daily penalties may be applied was welcomed to allow them time to address the situation with a view to mitigating the situation. One respondent suggested that it may be helpful to specify the time between the initial notice and the notice of intent, and to take account of the complexities of the scheme and size of the business in determining this period.

One respondent disagreed with the proposal, stating a potential for procedural duplication especially if the Environment Agency decides to waive or reduce the daily penalty, where it is discretionary.

Our response

We welcome suggestions to streamline our procedures. We will not include timescales in the ESP for the likely period between issuing an initial notice and notice of intent, as this is dependent on a number of factors. However, our notice of intent will not be issued until we know the total maximum penalty appliable in a particular case and will give sufficient time for the recipient to make representations before we impose any penalty.

We do not believe it is procedural duplication to issue an initial notice followed by a notice of intent. The notices are issued for different purposes. The purpose of the initial notice is to inform a person that a potential daily penalty is accruing and to encourage them to comply with the outstanding obligation as quickly as possible. The notice of intent is subsequently issued when we know the total maximum penalty due to a person. At this point the person can make representations, which we will consider when determining the final penalty amount.

We will now implement section H2 as set out in the consultation.

Q18. Do you agree with our proposals in section H3: The application of discretion to penalties?

Summary of responses

• 2 – agreed
• 1 – neither agreed or disagreed
• 2 – it was not applicable
• 1 – did not answer

One respondent raised that the ability to apply discretion to reduce or waive a penalty should be restricted for instances of low or no culpability on the part of the organisation, for example, for a non-compliance due to an accident or rogue employee.

Our response

In relation to the CORSIA discretionary penalties, this ESP consultation sets out how we intend to apply our discretion. We consider all relevant factors when deciding whether to waive or reduce a penalty and we do not think it is fair to only consider culpability in making this decision.

We will now implement section H3 as set out in the consultation.

Q19. Do you agree with our proposals in section H4: Multiple breaches?

Summary of responses

• 2 – agreed
• 1 – neither agreed or disagreed
• 2 – it was not applicable
• 1 – did not answer

One who agreed noted that the penalty needs to remain proportional to the breach as it provides fair opportunities for businesses to comply.

The respondent who disagreed, raised that it is a principle of justice that operators should be subject to the full range of penalties for every breach they are responsible for.

Our response

We consider this approach to multiple penalties does ensure penalty setting is proportional to the breach. Our proposed policy says that we may waive one or more penalty if we consider that the largest penalty or penalties are sufficient to penalise the aeroplane operator and deter it and others from failing to comply in future.

We will now implement section H4 as set out in the consultation.

Q20. Do you agree with our proposals in section H5: Assessing breaches of the ANO?

Summary of responses

• 1 – agreed
• 2 – neither agreed or disagreed
• 2 – it was not applicable
• 1 – did not answer

Where respondents neither agreed or disagreed with the proposals, a comment was made that the penalties for submitting incorrect information, not allowing access to premises and not keeping records reflects the seriousness of this legislation well.

The suggestion to introduce a standardised carbon accounting framework was made, to allow accurate comparisons of yearly emissions internally and across organisations, to work towards the drive to reduce carbon emissions.

A further comment was made that it is not clear if the threshold for bringing an aeroplane operator into CORSIA is based on the size of the operator’s organisation or the size of operation, or what would be considered having applied promptly for the emissions monitoring plan.

Our response

We note the request for a simplification of the system through the implementation of a standardised carbon accounting framework. This is out of scope for the consultation, and we will inform the DfT of this request.

The definitions of aeroplane operator and international flights, which include relevant thresholds, are prescribed by the ANO which transposes the requirements of the CORSIA Standards and Recommended Practices into UK law. We will use related thresholds in the ESP when determining the size of the penalty to be imposed.

Whether an application has been made promptly is a matter of fact taking into account all the circumstances of a case. Generally, we would expect a person to be in contact with its regulator as soon as it becomes aware that it is or may be an aeroplane operator.

We will now implement H5 as set out in the consultation.

Q21. Do you agree with our proposals in section H6: Enforcement notices?

Summary of responses

• 2 – agreed
• 1 – neither agreed or disagreed
• 1 – it was not applicable
• 1 – did not answer

There is general agreement with these proposals, presuming an aeroplane operator has been given adequate time to rectify their breach. This timescale should consider the complexity of the system and where some aeroplane operators rely on the availability of consultants.

It is assumed that the non-escalating penalty of £20,000 may be applied for non-compliance with each enforcement notice issued if there is more than one. There is a stronger deterrent in not capping the daily penalty at a maximum of £45,000 or for more than 90 days.

Our response

If we issue an enforcement notice, it will set out the steps that must be taken to rectify the breach and will set a reasonable period for completion of those steps.

The penalty applies to failure to comply with each enforcement notice given.

The cap for the daily penalty at a maximum of £45,000 is set in the ANO. This is out of scope of the consultation, and we will pass this feedback to the DfT.

We will now implement section H6 as set out in the consultation.

Q22. Do you have any further comments or suggestions about our proposals for the Environment Agency’s enforcement and sanctions policy?

Summary of responses

We received 5 comments, reinforcing the ‘polluter pays’ principle and welcoming bringing the UK ETS and CORSIA into our ESP.

Operators will try to ensure compliance and, given that the ESP sets out different penalties for different breaches, the consequences of a breach may be confusing.

The proposals do not account for the complexity of the current carbon accounting process and the pressures on businesses, recommending a carbon accounting framework to clearly set out the standards and methods for carbon accounting. As this is not in place, it is important that legislation and the ESP accommodates the pressure on newer or less well resourced businesses.

It is noted that the stepped approach set out in annex 2, section A of the current ESP may result in a significantly lower penalty that the statutory maximum, meaning that the penalty imposed may be inconsequential to the size of the organisation and may not act as a deterrent.

Our response

Our intention in setting out our response to each breach is to provide clarity to operators, aircraft operators and aeroplane operators about the consequences of a breach.

The suggestion to consider a carbon accounting framework is mentioned throughout the consultation responses. We seek to assist operators, aircraft operators and aeroplane operators to comply with their obligations and our response to each breach in our ESP will take account of all relevant factors. We will forward this suggestion to DESNZ, the UK ETS Authority, DEFRA and the DfT as the government departments responsible for managing carbon emissions for England.

The application of the stepped approach in annex 2, section A may result in a final penalty amount below the statutory maximum. As explained in section A, the approach is based on the steps in the Definitive Guideline for the Sentencing of Environmental Offences (known as the Guideline). We have adjusted these steps so that they are appropriate for the climate change civil penalties. The Guideline applies to criminal offences with no statutory maximum levels in the Crown Court – therefore, we cannot follow it entirely. We consider that the stepped approach is fair as it takes account of all relevant factors, including the deterrent effect.

4. Next steps

We have considered the comments received and consider no changes are required to our proposals in annex 2, section A, section G and section H. We will therefore publish these in line with the text set out in the consultation. This will include the update to section A that ensures that any discretionary penalty imposed on aircraft operators and aeroplane operators will be calculated by reference to the size of their aviation operation. We will bring to the attention of DESNZ, the UK ETS Authority and DEFRA the comments we received regarding the introduction of a carbon accounting framework.

We will contact all operators, aircraft operators and aeroplane operators when the revised ESP is published.

If you want to discuss your consultation response or the points made within this document, please email [email protected].