Diolch, Llywydd. I move the motion. I'm pleased to be able to bring forward the Greenhouse Gas Emissions Trading Scheme Order 2020. I would like to thank the Legislation, Justice and Constitution Committee and the Climate Change, Environment and Rural Affairs Committee for their scrutiny of this Order and ongoing work around the wider framework. 

The Greenhouse Gas Emissions Trading Scheme Order 2020 establishes in law a replacement policy for the UK's participation in the EU emissions trading system. Commencing on 1 January 2021, the scheme will incentivise Wales's largest carbon emitters to decarbonise their operations whilst ensuring a level playing field across the UK. 

The scheme is designed to operate as a stand-alone system if required, however it has also been designed to facilitate linking to the EU system, subject to the UK and EU reaching agreement. This is the Welsh Government's strong preference and is the best outcome for all parties.

The scheme operates by setting an overall ceiling on the total emissions from participating industrial installations, power stations and aircraft operators. Scheme participants are required to report their emissions and surrender an equivalent number of emissions allowances on an annual basis. Emissions allowances can be bought from a Government auction or on the secondary market. Some allowances are allocated without payment to industries at risk of carbon leakage. By setting an absolute ceiling on emissions, there is certainty the policy will achieve its environmental outcomes.

This Order is one of a suite of legislation, which I will briefly describe. The Order we are debating today establishes the structure of the UK ETS and substantial policy elements, such as the scope, the cap and trajectory, the definition of emissions allowances, enforcement and the role of regulators. We're also finalising a further Order, which will be made using the negative procedure. This will deal with the allocation of free allowances and matters concerning the registry. Additionally, secondary legislation under the Finance Act 2020 will deal with all aspects of optioning of emissions allowances and market stability mechanisms. The Senedd has given its consent to the UK Government legislating for this aspect of the scheme.

Finally, legislation using primary powers under the European Union (Withdrawal) Act 2018 and Financial Services and Markets Act 2000 is being laid by the UK Government to allow the Financial Conduct Authority to continue its role as the regulatory body for the emissions allowance market.

Senedd committees have been seeking clarity on the non-legislative aspects of the framework, and the Legislation, Justice and Constitution Committee in their recent letter asked me specifically about dispute resolution. We intend to escalate disputes to the Joint Ministerial Committee, given it is the only option available to us until the inter-governmental relations review concludes. At that point, we will review arrangements. However, our efforts should be focused primarily on dispute avoidance. Our draft concordat, as submitted to Ministers for clearance, describes a number of strategies to do this, including the commissioning of jointly scoped evidence and the appointment of specialist advisers to peer review the evidence that forms decisions. The Climate Change Act 2008 also requires us to take advice from the climate change committee before legislating for new carbon trading schemes and before making specific amendments, such as to the scope or duration of the scheme.

Senedd committees will have an opportunity to scrutinise the provisional framework outline agreement and associated concordat, and we will take your views into account before finalising the documents. Achieving a sustainable transition to Wales's industrial base will be crucial if we are to achieve our climate ambitions in a socially just way. This scheme offers a financial incentive for businesses to manage the transition in a cost-effective and flexible way, whilst maintaining certainty over the overall environmental objective. I therefore commend the motion to the Chamber. Diolch.