UK government confirms interim environmental watchdog and emissions trading scheme launch

Green campaigners and trade bodies had been calling for policy certainty over emissions trading and the OEP

The watchdog, the Office for Environmental Protection (OEP), was originally meant to be fully operational by the end of January 2021. It is being created to ensure that businesses and local authorities comply with the UK’s long-term green policy requirements.

But the Environment Bill will need to pass before the body can launch and the Bill’s progress has been plagued by Covid-19-related delays. In January, the decision was taken to roll the Bill over to the next Parliamentary session.

With this in mind, the Department for Food, the Environment and Rural Affairs has moved to launch the OEP on an interim basis. The launch will happen in July, at which point the body will be set up in a non-statutory form. It cannot become an independent legal entity until the Environment Bill receives Royal Assent.

The Interim OEP will have the powers to produce independent assessments of progress on the 25-Year Environment Plan. It will also be open to complaints from members of the public about cases of potential non-compliance with environmental law. Aside from these projects, staff will be tasked with developing the body’s long-term strategy, enforcement policy and voice.

Dame Glenys Stacey, formerly of Ofqual, will act as chair and Natalie Prosser, formerly of the Gambling Commission, will act as interim chief executives.

Dame Stacey said: “I am delighted at this decision. It means we can make rapid progress now, in establishing the organisation. The sooner we are up and running, the sooner we can deliver as intended, and so begin to make those tangible and positive differences to the environment that we so wish to see.”

Some green groups, however, are concerned that the delays to the Environment Bill will leave the watchdog without sufficient “teeth” at a time when the UK must accelerate action on the twin climate and nature crises.

Greener UK’s senior parliamentary affairs associate Ruth Chambers said: “Setting up a shadow watchdog that can monitor laws is a sensible and welcome move, which will bring our new environmental governance system ever closer.  

“As the shadow body won’t have the legal status to act when green laws are broken, it remains vital that the full OEP is set up as soon as possible. This means bringing the Environment Bill back to parliament at the earliest opportunity.”

It is understood that the Bill will not return to Parliament until Autumn, under current plans.

Emissions trading

In related news, Energy Minister Anne-Marie Trevelyan has confirmed that the UK’s ETS will enter operation in mid-May.

Intercontinental Exchange (ICE) – the FTSE500 firm which operates the EU ETS – has been appointed to oversee the UK’s new post-Brexit carbon market. It published its allowances auction calendar for the year late last week. The calendar outlines that the first auction will take place on 19 May.

ICE claims that its approach is aligned with the UK’s 2050 net-zero goal and the ways in which carbon is accounted for under the Climate Change Act. Trevelyan has said that the calendar outlined will make the ETS “even more ambitious” than that of the EU.

She said the move will “give businesses and operators clarity over this year’s supply of emissions allowances, enabling them to plan ahead, build back greener and better prepare for the transition to a low-carbon economy.”

The UK Government is now facing mounting pressure to firm up its approach to carbon pricing in the longer-term, a move that businesses have said will help secure investor certainty for low-carbon sectors and projects. Its next opportunity to make such an announcement is this year’s Budget on Wednesday (3 March) afternoon.

Sarah George