Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to use funds raised from the removal of Emissions Trading Scheme free allocations for airlines to support the aviation industry to decarbonise.

This question was answered on 11th July 2023
On July 3, the UK ETS Authority announced free allocation will be withdrawn from airline operators participating in the Emissions Trading Scheme after 2026. Operators will then be required to purchase allowances to cover their emissions fully.

The UK ETS Authority also announced that the overall number of allowances sold under the Emissions Trading Scheme will fall to be on a trajectory consistent with Net Zero. This takes the decline of free allocation to the aviation sector into account. That means that overall, no additional revenue will be raised from removing free allocations for airlines.

Revenue from the sale of allowances is used to support the Government’s wider priorities, including net zero policies.