03 July 2023: The UK Emissions Trading Scheme Authority (UK ETS) has revealed a comprehensive set of reforms aimed at strengthening restrictions on emissions from industries, power generation and aviation starting in 2024.
The scheme, established in 2021, imposes restrictions on the quantity of greenhouse gases that aviation, power and other energy-intensive industries are allowed to release. This approach serves as an incentive for industries to move away from expensive fossil fuels and motivates them to reduce their carbon footprint by investing in energy-efficient practices and renewable technologies. These efforts not only contribute to cutting emissions but also enhance energy security.
From next year, these sectors will be obligated to reduce their emissions at a rate that aligns with the net zero objectives, which sends a clear message to the industry to invest in long-term decarbonisation efforts, thus enabling the UK to maintain its position as a global leader in carbon emissions reduction.
To facilitate this transition, the emission cap will be set at the uppermost end of the range that was under consideration, aligning with the net zero goal. Furthermore, additional allowances will be introduced between 2024 and 2027. Additionally, the current levels of free allocation of allowances for the industry will be guaranteed until 2026, ensuring their protection against international pressures.
The governing body has additionally declared that the UK Emissions Trading Scheme (UK ETS) will be expanded to encompass additional sectors. Starting from 2026, it will include domestic maritime transport and from 2028, it will encompass the waste sector. Furthermore, a gradual elimination of complimentary carbon allowances for the aviation industry will be implemented in 2026, accompanied by financial support for investments in innovative Greenhouse Gas Removal technologies.
In a joint statement, UK ETS Authority Ministers, including Lord Callanan, Julie James MS, Màiri McAllan MSP and Gareth Davies MP said in an official press release, “With the recent rises in energy prices, it is more important than ever that we accelerate the transition away from costly fossil fuels, towards greener and more secure energy.
“The decisions taken here will not only put us on the path to net zero, but will also support crucial industries on their path to long term sustainability”.
The implementation of these measures will undoubtedly propel the UK towards its climate goals and inspire global efforts to mitigate the impact of human activities on our planet. The time for action is now, and the UK is taking bold steps to ensure a more sustainable and environmentally conscious world for generations to come.
