Integrating Greenhouse Gas Removals in the UK Emissions Trading Scheme
This consultation is open for responses
Respond to this consultationSummary
DESNZ proposes integrating greenhouse gas removals (GGRs) into the UK Emissions Trading Scheme, allowing carbon removal credits to offset emissions within the carbon pricing system. The consultation covers engineered removals and potentially nature-based solutions, with decisions on cap policy, allowance design, and permanence requirements. This extends the UK ETS beyond direct emissions to include negative emissions technologies.
Why it matters
This creates a cross-subsidy from electricity generators and industrial emitters to carbon removal operators, socialising the cost of achieving net zero across the carbon pricing system rather than pricing removal separately. The permanence question remains unresolved — temporary storage could undermine the scheme's environmental integrity while creating financial arbitrage opportunities.
Key facts
- •Consultation follows July 2023 commitment to integrate engineered GGRs
- •Covers both engineered and potentially nature-based removals
- •Addresses permanence, cap policy, and allowance design
- •Published 23 May 2024
Areas affected
Related programmes
Memo
The UK Emissions Trading Scheme (UK ETS) Authority (UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland, hereinafter ‘the Authority’) is seeking input on the integration of greenhouse gas removals (GGRs) in the UK ETS. This follows a commitment made in July 2023 to consult on proposals regarding the integration of engineered Greenhouse Gas Removals (GGRs) into the UK ETS and consideration of high quality nature-based GGRs, subject to further work to consider the range of potential issues raised regarding permanence, costs and wider land management impacts. The consultation proposes options and/or seeks views on: * Principles for policy design when integrating GGRs into the UK ETS * Cap policy options * Allowance design for GGRs * Permanence of carbon storage * Pathways to integration [Read the consultation document and analytical annex on GOV.UK](https://www.gov.uk/government/consultations/integrating-greenhouse-gas-removals-in-the-uk-emissions-trading-scheme).