Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, with reference to her Department's press release of 3 July 2023 entitled Tighter limit on industrial, power and aviation emissions, as the UK leads the way to net zero, what assessment she has made of the potential impact of changes to the number of Emissions Trading Scheme allowances available to the market on (a) the carbon price, (b) likelihood of meeting de-carbonisation targets and (c) future trade with the EU.

In July the Government published reforms to the UK Emissions Trading Scheme (ETS) to ensure it supports the delivery of net zero by 2050. These include a 30% reduction of the UK ETS cap, limiting the volume of greenhouse gases covered sectors can emit. As part of the UK ETS Authority, it is not appropriate for the Government to comment on UK ETS prices.

Maintaining international competitiveness for UK businesses is a key objective of the UK ETS and the impacts of UK ETS policy on trade with the EU are monitored closely.