The UK Emissions Trading Scheme Authority has released a series of consultations on expanding the UK Emissions Trading Scheme (ETS) to further curb carbon emissions.
Key details include plans to extend the UK ETS to the energy-from-waste and waste incineration sectors, ensuring a larger share of emissions are capped. Additionally, views are being solicited on incorporating UK-based greenhouse gas removal techniques into the scheme.
The consultations focus on integrating engineered greenhouse gas removal methods, such as direct air carbon capture, and assessing the suitability of high-quality nature-based removals for inclusion in the UK ETS.
The UK ETS, a critical component of the nation’s climate strategy, mandates that operators obtain allowances for each carbon unit they emit. These allowances can be traded, creating a carbon price incentivising investments in cleaner energy and efficiency improvements.
The UK ETS currently covers the aviation, power, and industry sectors. Since its inception in 2021, the Authority has explored ways to use carbon pricing to promote decarbonization across a broader economic spectrum.
Stakeholders are invited to provide feedback on two consultations on tightening carbon emission limits and advancing the UK’s net zero goals.
The waste emissions consultation seeks to provide certainty to encourage investment in decarbonization, helping businesses prepare for the scheme’s expansion. The greenhouse gas removal consultation represents a crucial step towards establishing a robust carbon removal market in the UK.
The two consultations cover:
- Expanding the UK ETS to include fossil CO2 emissions from energy-from-waste and waste incineration by 2028. This includes a two-year transition period starting in 2026, during which emissions will be monitored and verified without requiring the purchase or surrender of UK ETS allowances until full membership in 2028. This will complement other decarbonization initiatives by incentivizing industry adoption of decarbonization technologies.
- Integrating UK-based engineered greenhouse gas removal technologies, such as Direct Air Carbon Capture, which removes carbon dioxide from the air and stores it permanently, into the UK ETS. This aims to establish a long-term market for greenhouse gas removals. It also explores whether carbon stored through new UK woodland creation could be included in the UK ETS.
Future consultations will address expanding the UK ETS to the domestic maritime sector from 2026 and recognizing non-pipeline methods for transporting captured CO2, including by road, rail, or shipping.
The UK ETS Authority, comprising the UK Government, the Scottish Government, the Welsh Government, and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland, launched the scheme in January 2021 following the UK’s departure from the EU ETS.
The consultations are open now:
- UK Emissions Trading Scheme Scope Expansion: Waste (closing 18 July 2024)
- Integrating Greenhouse Gas Removals in the UK Emissions Trading Scheme (closing on 15 August 2024)
