UK Emissions Trading Scheme: Carbon Emissions

(asked on 8th January 2021) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the benefits of a net zero aligned UK ETS.


Answered by
Anne-Marie Trevelyan Portrait
Anne-Marie Trevelyan
Minister of State (Foreign, Commonwealth and Development Office)
This question was answered on 18th January 2021

The UK ETS will be the world’s first net zero carbon cap and trade market, and a crucial step towards achieving the UK’s target for net zero carbon emissions by 2050. Reaching our net zero target will provide crucial benefits such as reducing the risks of catastrophic climate change, reduced air pollution, economic growth, and green collar jobs.

By placing a cap on the volume of greenhouse gas emissions and issuing tradable emissions allowances under the cap, the UK ETS creates a market to ensure the most economically efficient distribution of emissions allowances and to incentivise emissions reductions where these are most cost-effective. The transparent downward cap trajectory provides a clear signal mobilising the participants in the covered sectors to invest in emissions reduction technologies and measures, which will be needed as supply of allowances tightens over time.

The UK ETS is more ambitious than the EU system it replaces - from day one the cap has been reduced by 5% below the UK’s expected notional share of the EU ETS cap for Phase IV. We received the Climate Change Committee’s advice on the Sixth Carbon Budget on the 9 December 2020, including their recommendation on the level of traded sector emissions from 2023 to 2030. We are considering this advice carefully and will consult on a net zero consistent trajectory for the cap in due course.

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