To ensure the integrity of the scheme there is an audit procedure to verify the accuracy of participants’ records and returns. The administrators who will carry out the audits are:
- In England and Wales – the Environment Agency
- In Scotland – the Scottish Environment Protection Agency (SEPA)
- In Northern Ireland – the Department for the Environment
The administrators will work together where participants have sites across different parts of the UK.
The audit process
Each year, up to 20 per cent of participants will be audited in a rolling programme of audits. Evidence packs for current and previous years must be made available for assessment.
A compliance audit may occur at any point in the year. It will begin with a desk-based assessment of the participant’s evidence pack(s) to establish whether the data in the participant’s reports is correct and based on sufficient records. Where necessary, administrators will make site visits, either as part of random sampling or following the desk-based assessment.
This means that the participant has failed to comply with the requirement to surrender sufficient allowances to cover its emissions.
This non-compliance has a civil penalty which includes a fine of £40 per tonne of CO2 in respect of each allowance that should have been obtained and surrendered, and the withholding of the revenue recycling payment until the participant complies, as well as publication of the non-compliance.
For inaccurate reporting the proposed penalty is £40 per tonne of carbon dioxide incorrectly reported beyond the allowable margin of error, which is 5 per cent. As the allowable margin of error is 5 per cent a participant will only be fined per tonne of CO2 incorrectly reported beyond that margin.
For the most up to date information please visit our Compliance Auditing page: