The UK Emissions Trading Scheme (ETS) Authority has today
published a package of consultations on expanding the UK
ETS to include the
energy from waste and waste incineration sectors. It is also
consulting on how engineered greenhouse gas removals, such as
direct air carbon capture, could be integrated, and on whether
high-quality nature-based removals could be suitable for the
scheme.
The ETS is a key
part of the UK's approach to addressing climate change. It
requires operators under the scheme to obtain allowances for
every unit of carbon they emit. These allowances can be traded
between participants, generating a carbon price that spurs
businesses to invest in cleaner or renewable energy sources and
improved energy efficiency.
The UK ETS
currently applies to the aviation, power, and industry sectors,
but since its establishment in 2021 the Authority has been
examining how carbon pricing can drive decarbonisation across
more of the economy.
Stakeholders are invited to share views on the 2 consultations to
further limit carbon emissions and support progress to net zero.
It follows previous commitments to consult, made last year as
part of ambitious reforms to the scheme.
In a joint statement, UK Emissions Trading Scheme Authority
ministers , MS,
MÃ iri McAllan MSP, MLA, MP and MP said:
These consultations deliver on our commitments to provide further
clarity on the expansion of the UK ETS to the energy from waste
and waste incineration sectors, and the integration of greenhouse
gas removals into the scheme.
The consultation covering waste emissions will help bring
certainty to drive investment in decarbonisation, as well as
helping businesses make the necessary preparations for the
expansion of the scheme. For greenhouse gas removals, this
is an important step towards building a thriving market for
carbon removals in the UK.
The 2 consultations cover:
- how the UK ETS
will expand to include fossil CO2 emissions from energy from waste and
waste incineration from 2028. This includes a 2-year phasing-in
period for the sector from 2026 during which emissions will be
monitored, reported and verified, with no obligation to purchase
or surrender UK ETS
allowances until their full membership in 2028. This will work
alongside other initiatives to decarbonise the sector by
providing an incentive for industry to adopt decarbonisation
technologies
- how UK-based engineered greenhouse gas removal technologies
such as Direct Air Carbon Capture, where carbon dioxide is
removed from the air and permanently stored, could be integrated
into the UK ETS.
This aims to provide a long-term market for GGRs. It also asks whether
carbon stored by the creation of new UK woodland could be
integrated into the UK ETS
These will be followed by 2 further consultations in due course,
on how to expand the UK ETS scheme into the domestic
maritime sector from 2026, and on how the scheme would recognise
non-pipeline methods for moving captured CO2 into storage, including by road, rail
or shipping.
The UK ETS
Authority is made up of the UK Government, the Scottish
Government, the Welsh Government and the Department of
Agriculture, Environment and Rural Affairs for Northern Ireland.
The scheme launched in January 2021, following the United
Kingdom's exit from the EU ETS.
Background
The consultations are open now:
