OPRED, part of the Department for Energy Security and Net Zero, has issued its first 2026 stakeholder note on behalf of the UK ETS Authority. The communication confirms a new Activity Level Report (ALR) template is available and sets an ALR submission deadline of 31 March 2026. It also reminds operators about Monitoring Methodology Plan (MMP) evidence standards and clarifies when to use the ‘unreasonable costs’ route if top‑tier data isn’t feasible. Published on 20 January 2026, the letter targets offshore oil and gas installations regulated by OPRED. (assets.publishing.service.gov.uk)

The operational takeaway is straightforward. Type 1 2026 incumbents must use the online ALR to report activity levels, importing their reviewed 2024 data and then completing 2025. Type 2 incumbents-those new to free allocation from 2026, those losing electricity generator status, or those meeting the Article 2b condition-will receive a manual ALR from their regulator and must include data for 2024 and 2025. OPRED also confirms that for Type 2 incumbents, the historical activity level used to set 2026 free allocation is based on 2023 only, and that value must be entered in the ALR template. (assets.publishing.service.gov.uk)

Why this matters for cash flow is clear. Free allocation drives how many allowances you receive without paying, which in turn shapes your net UK ETS exposure. A weaker allocation means buying more permits in the market, with a direct hit to margins. For planning purposes, treat the 31 March cut‑off as a financial deadline as much as a regulatory one; a late or incomplete ALR risks avoidable working‑capital strain in Q2.

For environmental reporting leads, the MMP reminder is not just housekeeping. The UK ETS Authority expects the most accurate data sources practicable, and where that isn’t technically possible-or would create unreasonable costs-you’ll need a robust justification and the prescribed tool to evidence the position. Build your files so an internal auditor unfamiliar with the asset could follow every calculation and data hand‑off.

A practical way to structure the next ten weeks is to lock down data lineage first. Pull your 2024 dataset from the version reviewed by your regulator, reconcile metering and production logs to that baseline, and test the import to the new template. Then complete the 2025 entries and run a variance check against operational records and previous submissions to catch gaps early.

Type classification deserves a board‑level sanity check. If your status has shifted around electricity generation, make sure commercial and engineering teams agree the position before you file. For operators new to free allocation in 2026, confirm that the 2023 activity level used as the historical baseline is identical to the figure submitted in your baseline data report; if it isn’t, pause and resolve the discrepancy before submission.

A North Sea operator with two installations offers a useful example. If its 2024 throughput was revised after verification but the ALR import still uses the pre‑review number, free allocation could be set lower than justified. Multiply that by a year of compliance and the difference becomes a real cost. The fix is dull but effective: reconcile to the regulator‑reviewed 2024 dataset, document the trail, and have finance sign off before the final upload.

OPRED’s note also confirms the basics: use the online ALR if you are a Type 1 2026 incumbent and expect a manual template from your regulator if you are Type 2. If you believe you are Type 2 and haven’t received the manual file, contact your regulator promptly. Keep MMP evidence to a standard that would withstand external review, and only claim the ‘unreasonable costs’ route with the required tool in your pack. (assets.publishing.service.gov.uk)