The Regulations were introduced to support Wales’s statutory system for reducing greenhouse‑gas emissions. They sit under the Environment (Wales) Act 2016 and define how Wales measures ,records and adjusts its national emissions totals.
Their core purpose is to:

• Establish how carbon units can be used when calculating the net Welsh emissions account.
• Create rules governing the use, crediting and cancellation of carbon units.
• Ensure that Wales’ progress towards its legally binding climate targets is calculated in a transparent, consistent and internationally recognised manner.
• Provide the mechanisms that Welsh Ministers must follow when managing carbon units and national carbon accounts.

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These Regulations are part of the legal infrastructure that underpins Wales’s long‑term emissions‑reduction commitments.

Key requirements

1. Which carbon units may be counted

The Regulations define which types of carbon units may contribute to the national emissions account. These must come from recognised international systems and must meet specified standards before being used for carbon accounting purposes.

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2. Welsh credit account

The Regulations require Welsh Ministers to:

• Set up and maintain the Welsh credit account within the UK emissions registry.
• Ensure that any carbon unit intended to adjust Wales’s net emissions is placed into this account before use.
• Restrict removal of units except where specific conditions or cancellation rules are met.

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The account ensures traceability and proper oversight of all carbon units used for national accounting.

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3. Crediting rules

Carbon units must:

• Be held in the Welsh credit account, and
• Be formally declared by Welsh Ministers before they can be credited to the net Welsh emissions account.

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Clear rules govern when and how carbon units can be used to adjust Wales’s emissions totals.

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4. Register of carbon units

Welsh Ministers must maintain a register showing:

• All carbon units credited or debited from the Welsh emissions account.
• Details of all carbon units that have been cancelled.

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This supports transparency and auditability.

Who the legislation applies to

The Regulations apply primarily to:

• Welsh Ministers, who are responsible for running the carbon‑accounting system and managing the Welsh credit account.
• The registry administrator, which operates the UK emissions registry used to store Welsh carbon units.
• Organisations whose activities generate or transfer approved carbon units that may be credited to Wales.

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The Regulations do not impose direct emissions‑reporting or reduction duties on public‑sector bodies or private companies. Those obligations arise under other climate‑related legislation, not this instrument.

This legislation governs how Wales calculates its national emissions, not how individual organisations measure their own.

UK countries and regions where it applies

The Regulations apply only in Wales.

They are made under Welsh legislation, apply exclusively to Wales’ national carbon accounts, and do not apply in:

• England
• Scotland
• Northern Ireland

Each of these nations uses its own accounting rules or climate‑target frameworks.

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The Regulations set out how Wales measures and records its national greenhouse‑gas emissions using carbon units. Evidence requirements fall mainly on Welsh Ministers and the registry administrator, rather than on organisations or businesses. The purpose of the evidence is to ensure the net Welsh emissions account is transparent, accurate and auditable.

1. Evidence for carbon units included in the Welsh emissions account

Welsh Ministers must hold evidence demonstrating:

• Which carbon units have been accepted for use in the Welsh accounting system.
• That each carbon unit meets the eligibility criteria defined in the Regulations.
• That any carbon unit credited to the net Welsh emissions account is from an approved international or domestic mechanism.

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This ensures only valid units contribute to Wales’s emissions balance.

2. Evidence relating to the Welsh credit account

The Welsh credit account is the central mechanism for storing carbon units. Evidence must include:

• Records confirming the creation and operation of the Welsh credit account.
• Documentation showing when carbon units were added to the account.
• Evidence that units were held in the account before being used to adjust the net Welsh emissions account.
• Records of any transfer of units out of the account and the grounds for doing so.

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This creates a complete audit trail for all carbon units used by Wales.

3. Crediting and debiting evidence

For each year or compliance period, Welsh Ministers must retain:

• Declarations confirming which carbon units were credited to the net Welsh emissions account.
• Evidence supporting each crediting decision, including the type, quantity and source of units.
• Records of any debits or removals from the account and the reasons for doing so.

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This ensures all changes to Wales’s emissions account are traceable.

4. Carbon‑unit cancellation evidence

The Regulations require evidence for the cancellation of carbon units, including:

• Requests or instructions to cancel units.
• Confirmation that cancelled units were transferred to the appropriate cancellation account.
• Records showing the reasons for cancellation and the date it was carried out.

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This prevents cancelled units from being reused.

5. Register of carbon units

Welsh Ministers must maintain a register containing:

• Details of all carbon units credited to or debited from the net Welsh emissions account.
• Records of all cancelled carbon units.
• Dates and quantities associated with each transaction.
• Evidence supporting each entry in the register.

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This register is a critical piece of evidence for compliance, transparency and public reporting.

6. Governance and verification evidence

Although the Regulations do not impose corporate reporting duties, Welsh Ministers must retain evidence showing:

• That advice from the statutory advisory body was considered where required.
• That carbon‑accounting actions comply with the wider Environment (Wales) Act.
• That records are maintained securely and accurately to support statutory targets and annual reporting.

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This ensures Wales’s carbon accounting system meets both legal and international expectations.

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