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Government proposes new Emissions Trading System
The government is seeking to increase the country’s climate ambitions with a new plan to ensure the UK is aligned with its commitment to reach net zero by 2050.
New proposals show how a new UK-wide Emissions Trading System (ETS) would work, including plans to reduce the existing emissions cap by five per cent, going further than the current EU system. Emissions trading systems work by setting a cap on the total amount of greenhouse gases that can be emitted from certain sectors, such as steel, the power generation sector and aviation. The cap is reduced over time so that total emissions fall.
The new scheme would replace the EU Emissions Trading System, which the UK will leave at the end of this year as the transition period ends. The system draws on the best of the current system that the UK helped to develop while ensuring it has greater flexibility to work in the best interests of the UK.
Approximately a third of UK emissions and around 1,000 UK factories and plants are currently covered by the EU ETS and will continue to be covered by the UK system.
Energy Minister Kwasi Kwarteng: “The UK is a world-leader in tackling climate change, and thanks to the opportunities arising as we exit the transition period, we are now able to go even further, faster. This new scheme will provide a smooth transition for businesses while reducing our contribution to climate change, crucial as we work towards net zero emissions by 2050.”
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