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UK Emissions Trading Scheme (UK ETS): policy overview
Summary
DESNZ provides a policy overview of the UK Emissions Trading Scheme, which currently covers power generation, heavy industry and aviation sectors representing 25% of UK territorial emissions. The scheme creates a carbon price through emissions caps and the UK ETS Authority is working to expand it to additional sectors.
Why it matters
The UK ETS directly affects power generators through carbon pricing, influencing electricity generation costs and investment decisions in low-carbon technologies. Expansion to additional sectors could broaden its impact across the energy system.
Key facts
- •Covers approximately 25% of UK territorial emissions
- •Currently includes power, heavy industry and aviation sectors
- •Managed by UK ETS Authority comprising UK, Scottish, Welsh Governments and Northern Ireland DAERA
Areas affected
generatorscarbon pricingwholesale marketrenewables
Related programmes
Net ZeroClean Power 2030
Publisher description
The role of the UK Emissions Trading Scheme in UK decarbonisation and how the UK ETS Authority is developing the scheme.
Full extracted text
The UK Emissions Trading Scheme ( UK ETS ) currently covers the heavy industry, power and aviation sectors – approximately 25% of UK territorial emissions. The scheme incentivises investment in decarbonisation in line with climate targets across the UK, by setting a cap on emissions from these sectors and creating a carbon price. The UK ETS Authority (consisting of the UK, Scottish, and Welsh Governments, and the Northern Ireland Department of Agriculture, Environment and Rural Affairs) is working to expand and develop the scheme to incentivise additional sectors of the economy. This sets out: the policy aims of the UK ETS how it works the work the UK ETS Authority is doing to develop it We will update the content as further policy updates are published. UK Emissions Trading Scheme (UK ETS): a policy overview HTML