The government is seeking views on extending the UK Emissions Trading Scheme (ETS) beyond the end of 2030.
It proposes to extend it into a second phase from 1st January 2031 and is also consulting on whether to allow banking of emissions allowances (UKAs) between Phase I and a post-2030 Phase II of the scheme.
The ETS, run by the UK ETS Authority, is a cap and trade scheme that sets an overall limit on emissions for the sectors covered by the scheme.
It is key to building a decarbonised economy across the UK, delivering an “economically efficient” transition to net zero and gives businesses covered by the scheme the certainty and flexibility to decide how to decarbonise most effectively at the least cost, incentivising decarbonisation and green innovation.
The government states: “Legislating to extend the UK ETS from 2031 onward will ensure that participants within the Scheme continue to be subject to their compliance obligations, that greenhouse gas emissions covered by the Scheme remain capped and that emissions allowances can continue to be traded.
“This will maintain the incentive to the covered sectors to decarbonise their operations by investing in sustainable technologies.”
The consultation is open until 9th April 2025.
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