Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, if he will make it his policy to end the free allocation of permits to companies through the UK Emissions Trading Scheme.

As the UK transitions to net zero, the Government is committed to protecting UK industry from carbon leakage (the movement of production and associated emissions from one country to another due to different levels of decarbonisation effort through carbon pricing and climate regulation), which is why the Government gives a proportion of free allowances to businesses under the UK ETS.

The Government is in the process of reviewing its free allocation policy. It consulted last year on technical short term improvements. The Government is also looking at ways to target free allocation to those sectors most at risk of carbon leakage. The Government will publish its response in due course.