Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, whether any cost benefit analysis conducted by his Department on linking the UK Emissions Trading Scheme with the EU Emissions Trading Scheme assessed the potential impact of higher UK Allowance prices on UK industry and consumers as a result of price convergence.

Answered by Chris McDonald - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

The price of carbon allowances in the UK Emissions Trading Scheme is set by the market.

As the conveners of the market the Government is not able to comment on current prices and price movements.

Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK.

These include for example providing businesses with access to a larger, stable carbon market; and the removal of some of the regulatory barriers in sectors like CO2 storage.

Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms.

Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, whether his Department conducted a cost-benefit analysis to support the decision to link the UK Emissions Trading Scheme with the EU Emissions Trading Scheme.

Answered by Chris McDonald - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

Government analysis indicates linking could stimulate economic growth, adding billions annually to our economy each year in the long run.

Linking the UK and EU ETSs is expected to bring significant economic benefits to the UK. These include for example providing businesses with access to a larger, stable carbon market; and the removal of some of the regulatory barriers in sectors like CO2 storage.

Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms.

Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what the source is for the Government's claim that aligning the UK Emissions Trading Scheme to the EU Emissions Trading Scheme will save British businesses £800 million.

Answered by Chris McDonald - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK.

These include providing businesses with access to a larger, stable carbon market; the removal of regulatory barriers in sectors like CO2 storage; supporting UK renewable rollout; and lowering electricity costs in the long run.

Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms. The £800m estimate is from a Frontier Economics report and refers to cumulative savings between 2026 and 2030.

Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the additional cost to businesses and consumers since the beginning of 2025 arising from increase UK ETS Allowance prices following the announcement of the Government’s intention to link the UK Emissions Trading Scheme with the EU Emissions Trading Scheme.

Answered by Chris McDonald - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

The price of carbon allowances in the UK Emissions Trading Scheme is set by the market.

As the conveners of the market the Government is not able to comment on current prices and price movements.

Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK.

These include for example providing businesses with access to a larger, stable carbon market; and the removal of some of the regulatory barriers in sectors like CO2 storage.

Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms.

Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, whether the Government's position that aligning the UK Emissions Trading Scheme to the EU Emissions Trading Scheme will prevent an £800 million impact from the EU Carbon Border Adjustment Mechanism, refers to savings in a single year or to a cumulative impact over multiple years.

Answered by Chris McDonald - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK.

These include providing businesses with access to a larger, stable carbon market; the removal of regulatory barriers in sectors like CO2 storage; supporting UK renewable rollout; and lowering electricity costs in the long run.

Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms. The £800m estimate is from a Frontier Economics report and refers to cumulative savings between 2026 and 2030.