UK Emissions Trading Scheme (UK ETS)

DESNZ·consultation·low·12 Mar 2026

4 related publications from DESNZ. DESNZ proposes to simplify UK ETS permitting for cross-boundary CCS pipelines by reducing the number of permits required from multiple regulators to a maximum of two. Current rules require separate permits from each jurisdiction a pipeline crosses (England, Scotland, Wales, Northern Ireland, and offshore), plus monitoring infrastructure at each boundary. The consultation runs until 4 June 2026.

4 publications

DESNZlow

UK Emissions Trading Scheme (UK ETS): policy overview

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UK ETS covers 25% of territorial emissions across power, industry and aviation, creating carbon price through cap-and-trade system. Authority expanding to maritime (July 2026), waste incineration (2028), and greenhouse gas removals (2029). May 2025 UK-EU agreement to work towards linking schemes, with negotiations begun December 2025.

Carbon pricing creates costs for fossil generation but represents administrative allocation rather than true market pricing — the cap sets quantity, letting price float rather than pricing scarcity directly. As such, this redistributes costs within covered sectors rather than addressing fundamental energy supply constraints.

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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.

---

This page provides an overview of the UK Emissions Trading Scheme (UK ETS) policy, the role of the UK ETS in the decarbonisation of the UK, and how the UK ETS Authority is developing the scheme.

Free allocation policy

The Authority is reviewing free allocation policy to ensure it is working effectively in the UK context to both incentivise emissions reduction, and protect energy intensive, trade-exposed industries from the risk of carbon leakage.

#### Phase 1 of the review

The first phase of this review, as part of the Developing the UK ETS consultation, aimed to align the industry cap (the share of free allocations under the cap available to be given out for free) with the overall UK ETS net zero consistent cap, and proposed short-term technical changes to address concerns flagged as part of the call for evidence.

#### Phase 2 of the review

The second phase included 2 consultations on:

* [Free allocation review](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-free-allocation-review) (December 2023) * [Free Allocation Review - Carbon leakage](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-free-allocation-review-carbon-leakage) (December 2024)

In November 2025, we published the main response to these consultations on the [FAR consultation page](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-free-allocation-review).

In November 2024 the Authority published an initial response confirming changes to free allocation rules for UK ETS installations that cease operation and confirmed that the second UK ETS free allocation period would move from 2026 to 2027 to align changes with the implementation of the UK CBAM in 2027.

#### UK Carbon Border Adjustment Mechanism (CBAM)

The UK carbon border adjustment mechanism will place a carbon price on specified goods imported to the UK from sectors that are at risk of carbon leakage. It takes effect from January 2027.

The CBAM will ensure highly traded, carbon intense goods imported to the UK from overseas face a carbon price which is comparable to the carbon price paid by domestic producers of such goods. This will prevent the displacement of emissions overseas to ensure that the UK’s decarbonisation efforts lead to a true reduction in global emissions.

See the:

* December 2024 Carbon leakage and CBAM consultation - [UK Emissions Trading Scheme: free allocation review - carbon leakage](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-free-allocation-review-carbon-leakage) * HM Revenue & Custom policy update to their consultation on the [Draft legislation: Carbon border adjustment mechanism](https://www.gov.uk/government/consultations/draft-legislation-carbon-border-adjustment-mechanism/carbon-border-adjustment-mechanism-cbam-policy-update)

The Authority is working closely with HM Treasury, which is responsible for CBAM policy, to ensure that the two policies work cohesively.

Markets policy

When the UK ETS was first established, market policies were implemented to support the stable launch of a new ETS market and the effective functioning of the scheme in its early years. These are set out in more detail in our [guidance on UK ETS markets](https://www.gov.uk/government/publications/taking-part-in-the-uk-emissions-trading-scheme-markets/taking-part-in-the-uk-emissions-trading-scheme-markets).

In December 2023, the UK ETS Authority consulted on existing markets policy and set out proposed changes to ensure that the policy remains fit for purpose and effective in managing the risks faced by an established and maturing scheme. The intention is to maintain stable and effective market conditions that will continue to incentivise decarbonisation in the traded sectors.

On 4 December 2025, the UK ETS Authority [responded to the consultation](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-future-markets-policy) setting out a summary of responses and final policy decisions.

The decisions include:

* to retain and inflation-proof the Auction Reserve Price (ARP). The Authority has decided to retain the ARP and maintain its real value – thus implementing an inflation-based increase since its introduction (i.e. from £22 to £28) in 2026 and increase the value yearly by inflation from 2027 * to maintain the existing design and operation of the Cost Containment Mechanism (CCM) and retain discretion. The CCM will continue to trigger if the average price for one allowance on the secondary futures market is more than an amount equal to three times the average price in the preceding two-year period for six consecutive months * to discount the implementation of a quantity-triggered Supply Adjustment Mechanism (SAM) for a standalone UK ETS. The Authority has concluded that retaining the existing price-based mechanisms (CCM and ARP) is sufficient to mitigate against key risks in a standalone UK scheme

In 2026, the ARP value will be adjusted through an inflation-based increase from £22 to £28. The legislation for this amendment - [The Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2026](https://www.legislation.gov.uk/uksi/2026/214/contents/made) - has been laid, and the £28 value will come into effect for the 8 April 2026 auction.

From 1 January 2027 onwards, the ARP value will increase yearly in line with inflation, according to GDP Deflator data provided by the Office for National Statistics (ONS). Further information on the inflation-based ARP increase can be found in the Authority response.

Aviation policy

The UK ETS is a significant part of the UK and devolved governments’ strategy to decarbonise aviation. Aviation is a growing and significant emitter, and there are technical and structural challenges to decarbonising the sector.

Following economic research that identified minimal carbon leakage and associated competitiveness risks for aviation under the current scope of the UK ETS, the Developing the UK ETS consultation covered options for aviation free allocation phase-out and the Authority agreed to end aviation free allocation from 1 January 2026.

#### Regional connectivity

On 28 October 2025 the UK ETS launched a [consultation on the impact of the end of aviation free allocation in 2026 on regional connectivity](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-regional-aviation-connectivity). This consultation seeks stakeholder views on whether intervention is needed, and if so, what form this should take. It closes on 19 December 2025.

#### Sustainable Aviation Fuel (SAF)

In June 2023, the Authority committed to review its approach to SAF, acknowledging the significance of the UK SAF Mandate to the decarbonisation of the aviation sector.

The Authority will continue to develop proposals on how the UK ETS should treat the use of SAF by aircraft operators and will consult on these in due course, considering alignment with the SAF Mandate sustainability criteria as one option.

#### Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

The UK has been voluntarily participating in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) since the beginning of its Pilot Phase in 2021. The UK Government has begun to regulate for full UK participation in CORSIA, with legislation covering CO2 monitoring, reporting and verification requirements in place in the UK since 2021.

In December 2024, the UK Department for Transport (DfT) launched a [consultation on implementing CORSIA in the UK](https://www.gov.uk/government/consultations/implementing-the-carbon-offsetting-and-reduction-scheme-for-international-aviation-corsia) in partnership with the UK ETS Authority. It sought views on draft legislation for CORSIA’s offsetting requirements, including:

* penalties for non-compliance * options for how CORSIA could interact with the UK ETS on flights in scope of both schemes

The DfT and UK ETS Authority will respond to this consultation in due course.

## Expanding the coverage of the UK ETS

The Authority set out its intention to expand the scheme to new sectors in the Developing the UK ETS consultation and 2023 [Long-term Pathway](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-long-term-pathway/the-long-term-pathway-for-the-uk-emissions-trading-scheme). This will cap emissions so that covered sectors decarbonise in line with climate commitments across the UK, and drive market-led-emissions reductions by applying the carbon price to more emitting activities.

The initial sectors the scheme will expand to cover are:

* waste incineration and energy from waste * maritime transport

We have also set out adjustments to the scope of coverage from existing ETS sectors to:

* include venting of CO2 * explore the rules around non-pipeline transport of CO2 to storage * integrate Greenhouse Gas Removals

Maritime

The Authority plans to expand the UK ETS to include emissions from the maritime sector, providing an incentive for the industry to invest in technologies to reduce their emissions.

The Authority has launched a [consultation on proposals to expand the UK ETS to include emissions from international voyages to and from the UK](https://www.gov.uk/government/consultations/uk-ets-scope-expansion-emissions-from-international-maritime-voyages).

The consultation seeks views on:

* the scope of the scheme * how to adjust the UK ETS cap to include emissions from the maritime sector * interactions between the UK ETS and the IMO’s Net Zero Framework * impacts of the scheme

The consultation will close on 20 January 2026.

The [main response to the maritime technical consultation](https://www.gov.uk/government/consultations/uk-ets-scope-expansion-maritime-sector) was published in November 2025 and set out the final policy detail. This includes decisions on:

* double surrender in the first two years of the scheme * adjusting the UK ETS cap to account for the inclusion of domestic maritime emissions * further exemptions and the mechanism to ensure carbon pricing parity across the Irish Sea * a future review of the 5000GT threshold

The [July 2025 interim response to the maritime technical consultation](https://www.gov.uk/government/consultations/uk-ets-scope-expansion-maritime-sector) was published to enable maritime operators to prepare for the scheme. The response confirms:

* expansion of the scheme to maritime from July 2026 * scope to include UK domestic journeys and emissions while in UK ports for vessels of 5000 gross tonnage (GT) and above * monitoring, reporting and verification (MRV) requirements * who is responsible for complying with the scheme

Initial information was provided regarding [onboarding for prospective maritime operators](https://www.gov.uk/government/publications/participating-in-the-uk-ets/participating-in-the-uk-ets#who-the-uk-ets-applies-to).

Waste

In 2023 the Authority announced its intention to expand the scope of the UK ETS to waste incineration and energy from waste (EfW) from 2028, preceded by a 2-year MRV transitional period. Expanding the scheme will support the waste sector to decarbonise in the most efficient way, reflecting the waste hierarchy.

The 2024 [consultation on the technical details of key aspects expansion to include waste](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-scope-expansion-waste) covered:

* full details of implementation * the implications of not exempting hazardous and clinical waste * options for mitigating risk of diversion of waste to landfill or export * cost pass-through to customers

The interim response (July 2025) confirmed:

* that the MRV-only period for combustion and process emissions from energy from waste and waste incineration processes will commence from 1 January 2026 * that at this stage, participation in the MRV-only period will be voluntary * details of how this will work

The full response will provide details for full inclusion of waste in the scheme in due course, including on how costs for local authorities will be managed.

Greenhouse Gas Removals

The integration of UK-based engineered Greenhouse Gas Removals (GGRs) into the UK ETS, and the potential integration of high-quality nature-based UK GGRs, will help incentivise investment by providing a significant source of demand for GGRs from polluting sectors. The [2024 consultation on integrating GGRs into the UK ETS](https://www.gov.uk/government/consultations/integrating-greenhouse-gas-removals-in-the-uk-emissions-trading-scheme) was supported by evidence from the Climate Change Committee and the Intergovernmental Panel on Climate Change highlighting the essential role of removals in achieving net zero. The Authority’s response provides detail on how GGRs will be integrated into the UK ETS, including:

* the design of the market * permanence requirements * eligibility criteria * safeguards to ensure environmental integrity and market stability

It is accompanied by new evidence assessing the permanence and suitability of woodland as a potential GGR, which will inform a future decision on its inclusion.

The Authority aims to legislate for GGR integration by the end of 2028, with the system expected to be operational by the end of 2029, subject to legislation, regulatory assessments and further consultation.

Coverage in existing ETS sectors

The Authority is refining the scope of the scheme for sectors already covered, to ensure that it is effectively driving decarbonisation and incentivising investment in key technologies, like carbon capture and storage.

#### Non-pipeline transport of CO2

A 2024 [consultation on a regulatory framework recognised non-pipeline transport of CO2 (NPT)](https://www.gov.uk/government/consultations/uk-ets-scope-expansion-ccs-non-pipeline-transport-of-carbon-dioxide) under the UK ETS.

The framework will require the Authority to set out who is responsible for CO2, when CO2 moves from an entity regulated under the UK ETS to a non-regulated entity, including detail on transport emissions (road, rail and shipping) and intermediate storage sites.

Recognising NPT will ensure that operators transporting CO2 for storage can deduct the amount they send to storage from their reportable emissions, providing economic support for industrial sites without access to pipelines.

We will respond to this consultation in due course.

#### CO2 venting

CO2 released through venting in the upstream oil and gas sector has been included in the scope of the UK ETS for installations already covered by the scheme, so that:

* treatment of CO2 from venting is in line with that from flaring * a perverse incentive for operators to vent CO2 is removed

See the [legislation implementing the change to treatment of CO2 venting](https://www.legislation.gov.uk/uksi/2024/1366/made).

## Long term planning

In December 2023 the Authority published its [Long-term pathway for the UK ETS](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-long-term-pathway/the-long-term-pathway-for-the-uk-emissions-trading-scheme). This policy paper:

* affirmed commitment to the long-term continuation of the UK ETS and continued alignment with the UK and Devolved Governments’ net zero goals * set out the work the Authority is undertaking to develop and expand the scheme

Extending the UK ETS cap beyond 2030

Following a consultation to extend the UK Emissions Trading Scheme beyond 2030, the UK ETS Authority has decided that the UK ETS will be extended into a 10 year Phase II, to run from 1 January 2031 to 31 December 2040. Banking of allowances will be permitted between Phase I and Phase II of the Scheme. The Authority will seek to consult again on a specific trajectory for the Phase II cap as soon as possible, including the analytical basis for the range of trajectories we are considering, and the emerging impacts of those trajectories. The entire second-stage consultation process, including an Authority response will occur sufficiently ahead of the beginning of Phase II on 1 January 2031 to provide the required certainty for participants.

* [Extending the UK Emissions Trading Scheme cap beyond 2030](https://www.gov.uk/government/consultations/extending-the-uk-emissions-trading-scheme-cap-beyond-2030)

## Review, monitoring and evaluation

The Authority is undertaking an evaluation to understand the effectiveness of the scheme’s implementation, the early outcomes of the scheme and its longer-term impacts. This 2-phase process will take place from 2023 to 2026.

The Authority commissioned CAG Consultants to undertake the evaluation, in partnership with GC Insight (previously named Winning Moves), University College London and Cambridge Econometrics.

The [first phase of the evaluation](https://www.gov.uk/government/publications/evaluation-of-the-uk-emissions-trading-scheme-phase-1) covering process, outcomes and early impacts, was completed in December 2023.

The current, second phase of the evaluation, covering emissions and carbon leakage impacts associated with the scheme, will report in 2026.

The Authority has also committed to publishing two reviews of the scheme’s operation during its first phase. The first was the [UK Emissions Trading Scheme review 2023](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-review-2023), and second review will be published by the end of 2028. The independent evaluation project will inform the Authority’s 2028 review.

## International cooperation

Carbon pricing is most effective when it is deployed widely and across borders. Climate change is a global issue, and wider uptake and higher ambition in carbon pricing means a broader incentive to reduce emissions. Global uptake of carbon pricing also reduces the risk of carbon leakage between jurisdictions.

Multilateral Cooperation

The UK Government actively cooperates with other countries on carbon pricing measures to support increased climate ambition globally through a range of bilateral and multilateral arrangements.

The UK is a long-standing member and supporter of the International Carbon Action Partnership (ICAP). ICAP is a global organisation which connects emissions trading systems across the world and provides expert technical advice on ETS construction and design.

The UK Government supports the Global Carbon Pricing Challenge (GCPC) for all countries to adopt carbon pricing as a central part of their climate strategies, with a collective goal for carbon pricing to cover 60% of global emissions by 2030. The GCPC is an informal partnership of jurisdictions (and international organisations) which aims to strengthen existing carbon pricing systems and support emerging ones.

The UK Government also provides support through [UK Partnering for Accelerated Climate Transitions (UK PACT)](https://www.ukpact.co.uk/). UK PACT is a programme funded by the UK Government. UK PACT supports countries that strive to overcome barriers to clean growth and have high emissions reduction potential to accelerate their climate change mitigation efforts.

The UK government is providing £130m to developing countries to support more ambitious carbon pricing globally. This includes £20m to the Partnership for Market Implementation fund, to help developing countries put a price on their emissions using carbon taxes and emissions trading schemes.

Bilateral cooperation

Bilateral arrangements and discussions can help with the growth of carbon pricing and reduction of distortions between systems. In December 2022, the UK and Switzerland signed a [Memorandum of Understanding (MoU) concerning the inclusion of flights between the two countries in their respective Emissions Trading Schemes](https://www.gov.uk/government/publications/coverage-of-aviation-in-the-uk-and-swiss-emissions-trading-schemes-memorandum-of-understanding). This includes the mutual intention to discuss potential areas of future co-operation as appropriate.

The UK also engages with other jurisdictions on a bilateral basis to share experience and expertise in the establishment and development of emissions trading schemes.

Linking to other Emissions Trading Schemes

It is possible to link Emissions Trading Schemes, creating larger markets and removing competitive distortions that arise from having separate markets. Linking means that allowances are fungible between different schemes, though each scheme can retain its own cap and other policy features.

In May 2025, the UK Government and European Union agreed, as part of the Summit on our future partnership, to work towards linking the UK ETS and EU ETS. This follows the commitment made in the [2021 UK-EU Trade and Cooperation Agreement](https://www.gov.uk/government/publications/ukeu-and-eaec-trade-and-cooperation-agreement-ts-no82021) to co-operate on carbon pricing and give serious consideration to linking carbon pricing systems. The [May 2025 Summit Common Understanding](https://www.gov.uk/government/publications/ukeu-summit-key-documentation/uk-eu-summit-common-understanding-html) sets out the parameters for a potential linking agreement.

Following approval of the EU negotiating mandate in November 2025, the UK and EU have now begun negotiations to pursue the linking of our carbon pricing systems. In December 2025, the UK and EU issued a [joint statement](https://www.gov.uk/government/publications/ukeu-summit-key-documentation/uk-eu-joint-statement-html) noting an aim to conclude negotiations by the time of the next UK-EU summit. We will not be providing a running commentary on the negotiations but will look to update stakeholders at the appropriate moment.

In parallel to the negotiations on linking, the Authority will continue its work to develop and expand the UK ETS. The Authority has published responses to the Free Allocation review, to the consultation on expansion to maritime, to the consultation on future markets policy, as well as announcing the extension of the scheme beyond 2030 and launching a consultation on expansion to international maritime. These publications reflect the need to provide participants with certainty over key areas of the scheme whilst also taking into account a potential linking agreement between the UK and EU.

## Ministerial directions for UK ETS regulators

Ministerial directions issued by the Secretary of State under section 52 of the Climate Change Act 2008.

* [UK Emissions Trading Scheme: ministerial directions to the regulators](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-ministerial-directions-to-the-regulators)

DESNZlow

UK Emissions Trading Scheme: Regulating cross-boundary CCS pipelines

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DESNZ proposes to simplify UK ETS permitting for cross-boundary CCS pipelines by reducing the number of permits required from multiple regulators to a maximum of two. Current rules require separate permits from each jurisdiction a pipeline crosses (England, Scotland, Wales, Northern Ireland, and offshore), plus monitoring infrastructure at each boundary. The consultation runs until 4 June 2026.

This is administrative streamlining for industrial decarbonisation infrastructure rather than electricity market reform. The measure reduces compliance costs for CCS operators but does not change electricity generation, grid access, or power market structure.

Source text

The Authority is seeking feedback on options being considered to streamline the UK Emissions Trading Scheme (ETS) regulatory requirements for cross-boundary CCS pipelines. The options aim to reduce the number of UK ETS permits a CCS pipeline crossing into multiple jurisdictions will require, which could simplify the monitoring and enforcement requirements for both operators and regulators. The consultation is aimed at anyone with an interest in CCS policy in the UK ETS, especially companies who plan to operate CCS pipelines. --- ## Introduction The UK Emissions Trading Scheme (ETS) is jointly run by the UK ETS Authority (hereafter ‘the Authority’) made up of the UK Government, Scottish Government, Welsh Government, and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland (DAERA). Carbon capture and storage (CCS) will be crucial for the UK to meet its net zero targets, especially for hard to abate sectors such as steel, cement, and chemicals that lack alternatives for deep decarbonisation. Track-1 CCS projects that plan to transport carbon dioxide (CO2) from industrial clusters via pipeline to permanent geological storage have received their final investment decisions (FID) and plan to commence operations towards the end of this decade. Other CCS projects utilising a CO2 pipeline transport network are also planned and working towards the FID milestone. Pipeline transport of greenhouse gases intended for geological storage is currently regulated by the UK ETS. [[footnote 1]](#fn:1) However, the Authority has recognised the default permitting framework in the UK ETS could be amended to be less complex and burdensome for operators and regulators of CO2 pipeline transport networks that cross national boundaries in the UK (referred to in this document as ‘cross-boundary CCS pipelines’). This consultation seeks views on options that could simplify which regulator(s), in respect of the UK ETS, are responsible for permitting, monitoring compliance, and enforcement in respect of: * the onshore section of a cross-boundary CCS pipeline (i.e. the portion of the pipeline on land), and * the offshore section of a cross-boundary CCS pipeline (i.e. from when the pipeline enters UK waters). ## General information ### Why we are consulting The Authority is seeking feedback on options being considered to streamline the UK ETS regulatory requirements for cross-boundary CCS pipelines. The purpose of the consultation is to understand views on options to reduce the number of UK ETS permits a CCS pipeline crossing into multiple jurisdictions will require which could simplify the monitoring and enforcement requirements for both operators and regulators. ### Consultation details If you need a version of this document in a more accessible format, please email alt.formats@energysecurity.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use. Issued: 12 March 2026 Respond by: 4 June 2026 Enquiries to: Emissions Trading Department for Energy Security and Net Zero Third Floor 3 Whitehall Place London SW1A 2EG Email: ukets.consultationresponses@energysecurity.gov.uk Consultation reference: UK Emissions Trading Scheme: Regulating cross-boundary CCS pipelines Audiences: * Companies proposing to offer CCS services, including capture installations, pipeline transport network operators, intermediate storage sites, and operators of geological stores. * UK ETS installations that are considering the use of pipeline CCS. * Any other potential participants in the CCS value chain. * Experts, academics, and organisations in the third sector with views on our proposed approach. * Verifiers and technical experts on monitoring, reporting, and verification (MRV). * Any other stakeholders with interest in our CCS policy options. Territorial extent: This consultation relates to options to develop the UK ETS, which operates across England, Scotland, Wales and Northern Ireland. This is a joint consultation, published by the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland. ### How to respond Respond online at: [UK Emissions Trading Scheme: Regulating cross-boundary CCS pipelines](https://energygovuk.citizenspace.com/_admin/energy-markets/uk-ets-regulating-cross-boundary-ccs-pipelines) or Email to: ukets.consultationresponses@energysecurity.gov.uk Write to: Emissions Trading Department for Energy Security and Net Zero Third Floor 3 Whitehall Place London SW1A 2EG When responding, please state whether you are responding as an individual or representing the views of an organisation. Your response will be most useful if it is framed in direct response to the questions posed, though further comments and evidence are also welcome. ### Confidentiality and data protection Information you provide in response to this consultation, including personal information, may be disclosed in accordance with UK legislation (the Freedom of Information Act 2000, the Data Protection Act 2018 and the Environmental Information Regulations 2004). If you want the information that you provide to be treated as confidential please tell us, but be aware that we cannot guarantee confidentiality in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not be regarded by us as a confidentiality request. We will process your personal data in accordance with all applicable data protection laws. See our [privacy policy](https://www.gov.uk/government/publications/desnz-consultations-privacy-notice/privacy-notice-relating-to-consultation-responses-received-by-desnz). We will summarise all responses and publish this summary on [GOV.UK](https://www.gov.uk/search/policy-papers-and-consultations?parent=department-for-energy-security-and-net-zero&content_store_document_type%5B%5D=closed_consultations&content_store_document_type%5B%5D=closed_calls_for_evidence&organisations%5B%5D=department-for-energy-security-and-net-zero&order=updated-newest). The summary will include a list of names or organisations that responded, but not people’s personal names, addresses or other contact details. ### Quality assurance This consultation has been carried out in accordance with the [government’s consultation principles](https://www.gov.uk/government/publications/consultation-principles-guidance). If you have any complaints about the way this consultation has been conducted, please email: bru@energysecurity.gov.uk. ## Regulation of CCS pipelines that cross UK ETS regulatory boundaries Transport of greenhouse gases by pipelines for geological storage in a storage site is a regulated activity under the UK ETS. Operators of CCS pipelines therefore require UK ETS permits. CCS pipelines may need to traverse multiple UK ETS regulatory boundaries before reaching permanent geological storage sites offshore. Article 10 of the Greenhouse Gas Emissions Trading Scheme Order 2020 (‘The Order’) [[footnote 2]](#fn:2) sets out that for CCS pipelines: * The Environment Agency (EA) is the responsible regulator for UK ETS installations in England, * Secretary of State, whose regulator functions are delivered by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) for UK ETS CCS activities, is responsible for installations in English territorial sea adjacent to England and the UK sector of the continental shelf (starting at 12 nautical miles offshore), * Natural Resources Wales (NRW) is the responsible regulator for Wales and Welsh territorial sea adjacent to Wales, * Scottish Environment Protection Agency (SEPA) is the responsible regulator for Scotland and Scottish territorial sea adjacent to Scotland, and * Northern Ireland Environment Agency (NIEA) is the responsible regulator for Northern Ireland and Northern Irish territorial sea adjacent to Northern Ireland. Under existing rules, this means responsibility for regulating the pipeline would transfer at each of these regulatory boundaries. Therefore, the operator would require a permit from each relevant regulator, and monitoring infrastructure to determine the amount of CO2 being transferred will be required at each boundary. In the case of a transfer of responsibility from the regulatory body for the relevant territorial sea (up to 12 nautical miles) to the regulatory body for the UK continental shelf (beyond 12 nautical miles), this boundary would be at sea. For example, a pipeline that ran through the territory of both England and Scotland, before terminating in an offshore geological storage site, would require a permit from the EA, a permit from SEPA, and a permit from OPRED, as well as monitoring infrastructure on the Scottish/English border and at the boundary between the Scottish territorial sea adjacent to Scotland and the UK sector of the continental shelf. There are also challenging practical issues inherent to any underwater infrastructure for installing and maintaining monitoring infrastructure at the point of transfer in to the UK sector of the continental shelf or between territorial seas. As it stands, these requirements increase both the complexity and the cost of constructing and operating a cross-boundary CCS pipeline. The Authority recognises that a more straightforward regulatory arrangement would be preferable. ### Determining the onshore regulator To streamline regulatory requirements, the Authority are considering the regulatory requirements where onshore pipelines cross over onshore UK borders, and whether they could only require a single UK ETS permit for the onshore portion of the pipeline. To facilitate this, we would need to identify the responsible UK ETS regulator/s. The Authority is considering two potential options for assigning regulatory responsibility for the onshore section of cross-boundary CCS pipelines. Option 1 – Assign a single onshore regulator Under this option, a single onshore UK ETS regulator would be designated for the entire onshore section of a cross-boundary CCS pipeline. This would entail existing regulator responsibilities being delegated from one regulator to another so they could regulate a cross-boundary CCS pipeline beyond their current jurisdiction. There are several possible approaches for determining how the onshore regulator could be assigned: * The regulator may be determined by the location of the pipeline’s central control room, where readings from monitoring equipment are processed and flow calculations are performed. For example, if the control room is located in Wales, NRW would act as the onshore regulator. * The regulator may be determined by the location of the pipeline operator’s UK-registered office. * The regulator may be determined by the jurisdiction through which the majority of the pipeline’s length passes. Whichever approach is taken to assign a single regulator, we propose that in cases of uncertainty, the Authority will be empowered to designate an appropriate onshore regulator for the pipeline. Option 2 – Jointly confer regulatory functions Under this option, regulatory responsibility for the onshore section of a cross-boundary CCS pipeline would be jointly conferred on all relevant UK ETS regulators whose jurisdictions the pipeline crosses. The relevant regulators would then agree on one lead regulator to exercise regulatory functions on behalf of the others. This decision would be based on which regulator is best placed to regulate the pipeline and will likely involve consideration of the above criteria set out for Option 1. Where a consensus is not reached amongst the regulators, the Authority will be empowered to designate an appropriate regulator for the pipeline. Regulators are involved from the planning stage of pipelines to assess other environmental regulatory requirements, so CCS pipeline projects would be identified early on by the relevant regulators, and deliberation could occur far in advance of when a permit is required. The pipeline operator would be informed by their regulator directly how they would be regulated and how to apply for a permit. Potential drawbacks of jointly conferring regulatory functions could include introducing legal uncertainty and complexity by requiring regulators to agree on responsibility. This approach may increase administrative efforts. Furthermore, the approach could reduce clarity on regulator enforcement powers and charging arrangements compared to the regulations clearly assigning a single onshore regulator. We do not anticipate that the regulator responsible for regulating a pipeline will change once initially determined, but if a need to do so arises, regulators would inform the pipeline operator in the year prior to the planned variation to their permit(s). We are interested in views from stakeholders on the most appropriate approach to determining the onshore regulator for cross-boundary CCS pipelines. Questions: 1. Do you agree that for onshore cross-boundary CCS pipelines there should be a requirement for only one onshore permit? 2. Do you have a preferred approach between Option 1 (assigning a single onshore regulator) and Option 2 (conferring joint regulatory functions on all relevant regulators)? Please explain your answer and provide evidence for your view where possible. 3. For Option 1, which criterion do you consider most appropriate for determining the onshore regulator? Please explain your answer and provide evidence where possible. 4. Are there any alternative criteria or approaches that should be considered for determining the onshore regulator of a cross-boundary CCS pipeline? If so, please describe the alternative criteria or approach and provide evidence where possible. ### Determining the offshore regulator We have previously presented the Authority view in the May 2019 consultation on the [Future of UK Carbon Pricing](https://assets.publishing.service.gov.uk/media/5d22f7d7ed915d0bc6a0a18f/THE_FUTURE_OF_UK_CARBON_PRICING_-_04072019.pdf) that for pipelines in England that are partially onshore and partially offshore, OPRED should be the regulator from the last point of measurement onshore before the CO2 is transported to the offshore storage site. In respect of pipelines located in Wales, Scotland and Northern Ireland that are partially onshore and partially offshore, the Authority proposed in the May 2019 consultation that DESNZ Secretary of State could seek consent from the relevant authority in those jurisdictions to direct OPRED as the regulator for CCS pipelines in their respective territories. This was to simplify the monitoring requirements, and mitigate the practical challenges associated with installing and maintaining monitoring infrastructure 12 nautical miles offshore where OPRED would take over regulatory responsibility from devolved regulators. Since then, the Authority has been considering applying a limit of two regulators for each cross-boundary CCS pipeline and correspondingly a maximum of two permits in total. To streamline the regulatory requirements in that manner, the Authority is considering two options for assigning regulatory responsibility for the offshore section of cross-boundary CCS pipelines. Option 1 – The onshore regulator remains the regulator for a cross-boundary CCS pipeline until the offshore storage site Each cross-boundary CCS pipeline, for the onshore and offshore sections, has only one regulator as determined by the onshore regulator options set out above (either EA, SEPA, NRW, or NIEA). This would also result in only one permit for the whole pipeline out to the storage site and, in turn, only require monitoring infrastructure at the start and end points of a CCS pipeline transport network – the end point being at the storage site. OPRED would remain the UK ETS regulator for the storage site where this site is located in the UK sector of the continental shelf or the territorial sea adjacent to England (i.e. the part of the territorial sea that is not adjacent to Northern Ireland, Scotland or Wales). Please note that each regulator, in respect of the UK ETS, only has the power to enact duties conferred on it by the Order, which due to the unique structure of the UK ETS is joint legislation made on behalf of the four national authorities that comprise the Authority, and other UK ETS legislation. Therefore, this option does not propose to confer additional powers on a Devolved Government or the UK Government and should not be interpreted as setting a precedent for widening the jurisdiction for other regulatory functions of any of the regulators. Option 2 – OPRED is the sole regulator for the entire offshore portion of the cross-boundary CCS pipeline including territorial seas and the UK sector of the continental shelf Each cross-boundary CCS pipeline has only one onshore regulator (either EA, SEPA, NRW, or NIEA), and OPRED is the sole offshore regulator where there will be a requirement for monitoring infrastructure at the onshore-to-offshore transfer point. This would also result in one permit for the offshore portion of the pipeline out to the storage site as well as one permit for the onshore portion. For this onshore-offshore transfer, the Authority considers that regulatory responsibility should pass to OPRED at the last onshore metering point, with OPRED then regulating the entire offshore portion of the pipeline. As with Option 1, this option does not confer additional powers on a Devolved Government or the UK Government and should not be interpreted as setting a precedent for widening the jurisdiction for other regulatory functions of any of the regulators. The next section of this document outlines options for monitoring infrastructure in respect of the offshore/onshore boundary in the event that Option 2 is pursued. Questions: 5. Do you have a preferred approach between Option 1 (the onshore regulator remains the regulator offshore) and Option 2 (OPRED is the sole offshore regulator)? Please explain your answer and provide evidence for your view where possible. 6. For Option 2, do you agree that OPRED’s regulatory responsibility should start from the last metering point at the designated onshore/offshore transfer point? Please explain your answer and provide evidence where possible. ### Monitoring infrastructure for the onshore/offshore boundary For Option 2 (OPRED is sole offshore regulator for CCS pipelines that cross into the UK sector of the continental shelf), monitoring infrastructure (e.g., a CEMS [[footnote 3]](#fn:3) or AMS [[footnote 4]](#fn:4)) will be required to monitor CO2 transferred across a regulatory boundary from the onshore regulator to OPRED. This is also currently required at the existing transfer point between the EA and OPRED at an English shore under current rules. The CCS pipeline operator must annually report to their regulator how much CO2 is lost from venting, leakage, and fugitive emissions, as well as the quantity of CO2 that has been transported to the offshore storage site. The boundary provides that end and start point for the onshore and offshore regulator respectively. This ensures the UK ETS robustly accounts for the net amount of greenhouse gas geologically stored. Thus, we are seeking views on the appropriate requirements for pipeline monitoring infrastructure. It may be possible to use existing onshore monitoring/metering so that it becomes the designated last onshore meter. Alternatively, the Authority could mandate that additional metering and other monitoring infrastructure be constructed at a suitable onshore point near the pipeline beachhead, which would then be the point of regulatory transfer to OPRED. For both these eventualities, to ensure that OPRED’s onshore responsibility extends no further than necessary, we recommend that the point of transfer, along with associated infrastructure, be onshore at a maximum of 2 km from the mean high-water springs mark (the average high tide line during spring tides) at the pipeline beachhead. Questions: 7. Do you agree that dedicated monitoring and metering infrastructure should be required at the point of regulatory transfer between the onshore and offshore regulator? Please explain your answer and provide evidence for your view where possible. 8. What are your views on our proposed approach to monitoring infrastructure requirements for the onshore-offshore transfer? Please explain your answer and provide evidence where possible. 9. Do you agree that the appropriate distance for determining the location of the onshore/offshore transfer point should be no greater than 2 km from the mean high-water springs? Please explain your answer and provide evidence where possible. ### Compliance and monitoring infrastructure costs The Authority is interested in developing its understanding of monitoring infrastructure costs (capital and operational) as well as costs from the administrative effort to Monitor, Report, and Verify (MRV) emissions for each section of the pipeline separately in the event that none of the options in this consultation are taken forward. The Analytical Annex details our current understanding, and we would like to invite stakeholders to provide any relevant data on these costs if available. Question: 10. If you have cost data you are willing to share either on monitoring infrastructure and/or the expected cost of UK ETS MRV for pipelines transporting CO2 to permanent geological storage, please provide this and accompany with evidence where possible. ### Welsh language Questions: 11. What, in your opinion, would be the likely effects of the options being consulted on have on the Welsh language? We are particularly interested in any likely effects on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English. Do you think that there are opportunities to promote any positive effects? Do you think that there are opportunities to mitigate any adverse effects? 12. In your opinion, could the options being consulted on be formulated or changed so as to have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English; or mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English? ## Consultation questions 1. Do you agree that for onshore cross-boundary CCS pipelines there should be a requirement for only one onshore permit? 2. Do you have a preferred approach between Option 1 (assigning a single onshore regulator) and Option 2 (conferring joint regulatory functions on all relevant regulators)? Please explain your answer and provide evidence for your view where possible. 3. For Option 1, which criterion do you consider most appropriate for determining the onshore regulator? Please explain your answer and provide evidence where possible. 4. Are there any alternative criteria or approaches that should be considered for determining the onshore regulator of a cross-boundary CCS pipeline? If so, please describe the alternative criteria or approach and provide evidence where possible. 5. Do you have a preferred approach between Option 1 (the onshore regulator remains the regulator offshore) and Option 2 (OPRED is the sole offshore regulator)? Please explain your answer and provide evidence for your view where possible. 6. For option 2, do you agree that OPRED’s regulatory responsibility should start from the last metering point at the designated onshore/offshore transfer point? Please explain your answer and provide evidence where possible. 7. Do you agree that dedicated monitoring and metering infrastructure should be required at the point of regulatory transfer between the onshore and offshore regulator? Please explain your answer and provide evidence for your view where possible. 8. What are your views on our proposed approach to monitoring infrastructure requirements for the onshore-offshore transfer? Please explain your answer and provide evidence where possible. 9. Do you agree that the appropriate distance for determining the location of the onshore/offshore transfer point should be no greater than 2 km from the mean high-water springs? Please explain your answer and provide evidence where possible. 10. If you have cost data you are willing to share either on monitoring infrastructure and/or the expected cost of UK ETS MRV for pipelines transporting CO2 to permanent geological storage, please provide this and accompany with evidence where possible. 11. What, in your opinion, would be the likely effects of the options being consulted on have on the Welsh language? We are particularly interested in any likely effects on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English. Do you think that there are opportunities to promote any positive effects? Do you think that there are opportunities to mitigate any adverse effects? 12. In your opinion, could the options being consulted on be formulated or changed so as to have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English; or mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English? ## Next steps The responses to this consultation will be used to develop final policy decisions for implementation. The consultation will be open for 12 weeks before closing. The Authority will then work through the responses and aim to publish the Authority Response in due course. ## Annex – Analytical summary ### UK ETS background The UK Emissions Trading Scheme (UK ETS) is one of the UK’s flagship decarbonisation policy instruments. UK ETS covers emissions in heavy industry, power generation and aviation. [[footnote 5]](#fn:5) The scheme will expand to include domestic maritime emissions from July 2026. Consultations have been held on further scope expansion to waste incineration, energy from waste and international maritime emissions. In 2023, UK territorial emissions totalled approximately 385 million tonnes (Mt) of CO2 of which around 25% (97Mt of CO2) were covered by the UK ETS main scheme. 2024 saw a decrease in emissions covered by the UK ETS of 11Mt of CO2, driven largely by emissions reductions in the power sector and industry. [[footnote 6]](#fn:6) UK ETS operators must obtain allowances (purchased in auctions and in the secondary market or freely allocated) and surrender them to cover their emissions liability. This ability of market participants to trade allowances ensures that decarbonisation in the covered sectors in the scheme happens at the least cost as a choice is always made between the purchasing allowances or reducing emissions through deploying a green technology. Under the “cap and trade” principle of the UK ETS, the number of allowances available under the cap each year decreases, ensuring alignment with the proposed emissions reductions required under our long-term net zero goals. The UK ETS is therefore a policy instrument to incentivise decarbonisation through adoption of existing and novel technologies. ### CCS summary One such technology is carbon capture and storage (CCS) where CO2 is prevented from entering the atmosphere by capturing it at production source. Once captured, it is compressed and transported to long-term geological storage. CCS is viewed as an essential technology for the UK to achieve its 2050 net zero goal, to support economic growth and create high-value, low-carbon jobs in industrial regions. [[footnote 7]](#fn:7) This consultation seeks to simplify the permitting arrangements for CCS pipeline operators. By simplifying the regulatory boundaries for cross-boundary permitting in the UK the administrative effort incurred by CCS pipeline operators should be reduced. Making operations more efficient should, in turn, help support the economic viability of CCS. UK ETS operators which utilise pipeline-based CCS to reduce their emissions could benefit from reduced pass-through costs, supporting adoption of the technology. ### Analytical summary UK ETS installations and operators are geographically dispersed throughout the UK, whilst the majority of the 78 billion tonnes of CO2 storage [[footnote 8]](#fn:8) in the UK continental shelf is located within the North Sea. Other storage sites are within the Irish Sea and the English Channel. Figure 1 at A [[footnote 9]](#fn:9) shows the geographic distribution of ETS installations and operators across the UK and at B [[footnote 10]](#fn:10) shows the geographic distribution of offshore geological storage. Figure 1A ![](https://assets.publishing.service.gov.uk/media/6994f4fc2a594455bcfcd5e3/ccs-pipeline-1.svg) Figure 1B ![](https://assets.publishing.service.gov.uk/media/6994f5320b6fa0acfdaaf131/ccs-pipeline-2.svg) Each of the four nations of the UK has their own regulator which oversees UK ETS regulated activity. Each regulator has jurisdiction over UK ETS installations on land and devolved regulators have jurisdiction over UK ETS installations in their nation’s territorial sea (within 12 nautical miles of the shore). In addition, there is a regulator, OPRED, for offshore UK ETS installations beyond the 12 nautical mile boundary that also has jurisdiction over the English territorial sea. Under current rules, CCS pipelines which traverse these boundaries will be required to obtain a separate UK ETS permit for each jurisdiction. From figure 1 above, captured CO2 from UK ETS installations is likely to be transported across regulatory jurisdictional boundaries by pipelines. This highlights the need to ensure the regulatory framework allows CO2 transported by a pipeline to storage across national boundaries (including the transition from land to sea) is robust yet practical to facilitate adoption by operators of UK ETS installations. Figure 2 – HyNet regulatory status quo and options under consideration. ![](https://assets.publishing.service.gov.uk/media/6994f542a1b9dae93f9c77eb/ccs-pipeline-3.svg) Figure 2A demonstrates the current regulatory framework that the HyNet Transport and Storage Network [[footnote 11]](#fn:11) will have to adhere to once in operation if none of the options considered in the consultation are implemented. The pipeline starts under the jurisdiction of the Environment Agency (EA; regulator in England). As the pipeline crosses the border into Wales, Natural Resources Wales (NRW; regulator in Wales) has responsibility for the section of pipeline from the England/Wales border and into Welsh territorial sea. At the boundary between the Welsh and English territorial sea, the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED; UK regulator) takes over regulatory responsibility through into the UK sector of the continental shelf (UK CS) until the storage site. Please note, if the UK CS was bordering the territorial sea of a devolved nation, the responsibility would pass from the devolved regulator to OPRED at the boundary between the devolved territorial sea and the UK CS. At each of the boundary points for HyNet, indicated with the longer dashed blue lines, monitoring infrastructure is installed to determine the amount of CO2 being transferred as per each permit’s monitoring plan which are agreed with each regulator. As an example, two of the options in this consultation are demonstrated in figures 2B and 2C. A criterion or multiple criteria would be used to determine which single regulator (EA or NRW) would be responsible for the onshore section of the HyNet pipeline. In addition, that regulator would either remain the regulator offshore or OPRED would become the sole regulator for the offshore portion. Overall, the HyNet pipeline operator would engage with a maximum of two regulators under the options being considered and the requirement for monitoring infrastructure would be reduced to a maximum of three sites: the start of the pipeline, the land/sea border and the start of the storage site. Under the existing regulatory framework, pipeline operators are subject to two principal categories of cost: 1. Compliance costs These costs arise from the requirement to obtain and maintain permits in each jurisdiction the pipeline traverses. Each permit requires operators to pay set-up and annual fees to their regulator. However, the larger cost comes from the complexity of these processes which can be administratively burdensome on operators resulting from engaging with different regulators for different sections of the pipeline to obtain UK ETS permits. Whilst we anticipate the policy to reduce administrative costs, we are unable to estimate them quantitatively. The latest evidence on compliance costs accrued from UK ETS operators dates back to 2016 when UK ETS operators operated under EU ETS rules. However, operators who provided data for this study did not split out the costs associated with permits specifically, so it is not clear what proportion of these costs are derived from the permitting process. In addition, UK ETS operators now operate under UK ETS regulations which have diverged from EU ETS regulations and so this evidence serves as a proxy to understand the impact of this proposed policy on compliance costs under UK ETS regulations. As demonstrated by figure 2A and 2B for HyNet, the consultation options would mean a CCS pipeline operator would engage with a maximum of two regulators (down from three in the case of HyNet). Thus, under the options considered in this consultation, a CCS pipeline operator would save on the fees paid to regulators and administrative costs associated with engaging with less regulators to obtain the necessary permit and report emissions under the monitoring plan. 2. Infrastructure costs At jurisdictional boundaries, operators are required to install monitoring infrastructure to ensure accurate measurement and reporting for each permit. In cases where the pipeline traverses the boundary of a devolved territorial sea (at 12 nautical miles of the shore) to the UK sector of the continental shelf or from one territorial sea to another, monitoring infrastructure must be installed subsea. As demonstrated in figure 2A and 2B for HyNet, the number of points where monitoring infrastructure will be required due to a boundary would be reduced from three to one or zero; in addition to the monitoring infrastructure required at the start and end points of a CCS pipeline. This would reduce capital expenditure (to purchase and fit the equipment) and operating expenditure (to maintain and operate the equipment). Whilst we anticipate these cost reductions, we are unable to quantify them. The equipment used in large scale projects such as HyNet are largely bespoke to an individual project’s specification, therefore, no ‘off-the-shelf’ cost estimates are available to quote. Currently, there are no operational CCS pipelines in the UK. In addition to the HyNet Transport and Storage Network, the East Coast Cluster [[footnote 12]](#fn:12) is also in construction. Both projects target commencing operations in 2028 and together can store 8.5 million tonnes of carbon emissions each year. This would equate to approximately 0.01% of the UK Continental Shelf’s estimated storage capacity each year and around 16% of the 2028 legislated cap [[footnote 13]](#fn:13). The government has announced its support for two additional clusters that are in development (Acorn in Northern Scotland [[footnote 14]](#fn:14) and Viking in Humber [[footnote 15]](#fn:15)) and is providing the development funding to advance their delivery. Contracts have been agreed for various projects including those in the power generation and cement production sectors (UK ETS regulated activities) to begin using carbon capture technology and utilise the HyNet network [[footnote 16]](#fn:16). ### Conclusion Overall, there is clear evidence of the scale of CCS development and the significant potential it offers for UK ETS operators to effectively decarbonise. The geographic distribution of UK ETS industrial sites compared to permanent geological storage indicates that cross boundary transportation of captured carbon dioxide via pipeline is highly likely. The options considered as part of this consultation are expected to simplify the regulatory framework for CCS pipeline operators. This will minimise fees paid to regulators and administrative burden on the pipeline operator, reducing any pass-through operating costs therefore making CCS a more attractive proposition for UK ETS operators seeking to decarbonise. Going forward, we seek to develop our understanding on infrastructure costs (capital and operational) as well as costs from administrative effort through permitting and reporting to regulators. We would like to invite stakeholders to provide any useful data on these costs if available. 1. [Paragraph 3 of Schedule 2, The Greenhouse Gas Emissions Trading Scheme Order 2020](https://www.legislation.gov.uk/uksi/2020/1265/schedule/2) [↩](#fnref:1) 2. [Article 10, The Greenhouse Gas Emissions Trading Scheme Order 2020](https://www.legislation.gov.uk/uksi/2020/1265/article/10). [↩](#fnref:2) 3. Continuous Emissions Monitoring System – measures both the mass and concentration of the gas flowing through the pipeline. [↩](#fnref:3) 4. Automated Measuring System – measures the mass of the gas flowing through the pipeline (concentration will be calculated via emissions factors). [↩](#fnref:4) 5. [UK Emissions Trading Scheme (UK ETS): a policy overview - GOV.UK](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-uk-ets-policy-overview/uk-emissions-trading-scheme-uk-ets-a-policy-overview). [↩](#fnref:5) 6. Internal DESNZ analysis of UK ETS data. [↩](#fnref:6) 7. [CCUS future network strategy - GOV.UK](https://www.gov.uk/government/calls-for-evidence/ccus-future-network-strategy). [↩](#fnref:7) 8. [Carbon capture, usage and storage: a vision to establish a competitive market - GOV.UK](https://www.gov.uk/government/publications/carbon-capture-usage-and-storage-a-vision-to-establish-a-competitive-market) (DESNZ, 2023). [↩](#fnref:8) 9. Internal DESNZ analysis of UK ETS data. [↩](#fnref:9) 10. [Carbon capture, usage and storage: a vision to establish a competitive market - GOV.UK](https://www.gov.uk/government/publications/carbon-capture-usage-and-storage-a-vision-to-establish-a-competitive-market) (DESNZ, 2023). [↩](#fnref:10) 11. [HyNet North-West](https://hynet.co.uk/). [↩](#fnref:11) 12. [East Coast Cluster](https://eastcoastcluster.co.uk/). [↩](#fnref:12) 13. The legislated cap in 2028 is 53,498,502 tonnes as set out in [Article 22, The Greenhouse Gas Emissions Trading Scheme Order 2020](https://www.legislation.gov.uk/uksi/2020/1265/article/22). Note that not all CO2 transported by the HyNet and East Coast Clusters may be from UK ETS regulated activity. It should be noted that these projects are unlikely to operate at full capacity immediately upon commencement. Therefore, the 16% figure is intended to illustrate the relative scale of operations compared to the legislated cap, rather than imply HyNet and the East Coast Cluster will collectively capture 16% of the cap in 2028. [↩](#fnref:13) 14. Acorn: [Growing Our Decarbonised Future - The Acorn Project](https://theacornproject.uk/). [↩](#fnref:14) 15. Humber CCS: [Carbon Capture and Storage - Viking CCS](https://www.vikingccs.co.uk/). [↩](#fnref:15) 16. [HyNet expansion: project negotiation list - GOV.UK](https://www.gov.uk/government/publications/hynet-track-1-expansion-selected-projects/hynet-expansion-project-negotiation-list). [↩](#fnref:16) --- Ymgynghoriad ar y cyd rhwng Llywodraeth y DU, Llywodraeth yr Alban, Llywodraeth Cymru ac Adran Amaethyddiaeth, Amgylchedd a Materion Gwledig Gogledd Iwerddon ## Cyflwyniad Mae Cynllun Masnachu Allyriadau’r DU (ETS y DU) yn cael ei redeg ar y cyd gan Awdurdod Cynllun Masnachu Allyriadau’r DU (‘yr Awdurdod’ o hyn ymlaen) sy’n cynnwys Llywodraeth y DU, Llywodraeth yr Alban, Llywodraeth Cymru ac Adran Amaethyddiaeth, yr Amgylchedd a Materion Gwledig Gogledd Iwerddon. Bydd dal a storio carbon (CCS) yn hanfodol er mwyn i’r DU gyrraedd ei thargedau sero net, yn enwedig ar gyfer sectorau anodd eu lleihau fel dur, sment, a chemegau sydd heb ddewisiadau amgen ar gyfer datgarboneiddio dwfn. Mae prosiectau Trac-1 CCS sy’n bwriadu cludo carbon deuocsid (CO2) o glystyrau diwydiannol trwy biblinellau i safleoedd storio daearegol parhaol wedi derbyn eu penderfyniadau buddsoddi terfynol (FID) ac maent yn bwriadu dechrau gweithredu tua diwedd y degawd hwn. Mae cynlluniau eraill ar gyfer prosiectau CCS sy’n defnyddio rhwydwaith trafnidiaeth piblinellau CO2 hefyd ar y gweill ac yn gweithio tuag at garreg filltir y FID. Ar hyn o bryd mae cludo nwyon tŷ gwydr a fwriedir ar gyfer safleoedd storio daearegol yn cael ei reoleiddio gan ETS y DU. [[footnote 1]](#fn:1) Fodd bynnag, mae’r Awdurdod wedi cydnabod y gellid diwygio’r fframwaith trwyddedu diofyn yn ETS y DU i fod yn llai cymhleth a beichus i weithredwyr a rheoleiddwyr rhwydweithiau trafnidiaeth piblinellau CO2 sy’n croesi ffiniau cenedlaethol yn y DU (y cyfeirir atynt yn y ddogfen hon fel ‘piblinellau CCS trawsffiniol’). Mae’r ymgynghoriad hwn yn gofyn am farn ar opsiynau a allai symleiddio pa reoleiddiwr/reoleiddwyr, mewn perthynas ag ETS y DU, sy’n gyfrifol am drwyddedu, monitro cydymffurfiaeth a gorfodi mewn perthynas â: * y rhan ar y tir o biblinell CCS drawsffiniol (h.y. y rhan o’r biblinell ar y tir), a * y rhan ar y môr o biblinell CCS drawsffiniol ar y môr (h.y. lle y mae’r biblinell yn mynd i ddyfroedd y DU). ## Gwybodaeth gyffredinol ### Pam rydyn ni’n ymgynghori Mae’r Awdurdod yn gofyn am adborth ar opsiynau sy’n cael eu hystyried i symleiddio gofynion rheoleiddiol ETS y DU ar gyfer piblinellau CCS trawsffiniol. Diben yr ymgynghoriad yw deall safbwyntiau ar opsiynau er mwyn lleihau nifer y trwyddedau ETS y DU y bydd eu hangen ar biblinell CCS sy’n croesi i awdurdodaethau lluosog a allai symleiddio’r gofynion monitro a gorfodi ar gyfer gweithredwyr a rheoleiddwyr. ### Manylion yr ymgynghoriad Os oes angen fersiwn o’r ddogfen hon arnoch mewn fformat mwy hygyrch, anfonwch e-bost at alt.formats@energysecurity.gov.uk. Dywedwch wrthym pa fformat sydd ei angen arnoch. Bydd yn ein helpu os dywedwch pa dechnoleg gynorthwyol rydych yn ei ddefnyddio. Cyhoeddwyd: 12 Mawrth 2026 Ymateb erbyn: 4 Mehefin 2026 Ymholiadau i: Emissions Trading Department for Energy Security and Net Zero Third Floor 3 Whitehall Place London SW1A 2EG Ebost: ukets.consultationresponses@energysecurity.gov.uk Cyfeirnod yr ymgynghoriad: Cynllun Masnachu Allyriadau’r DU: Rheoleiddio piblinellau dal a storio carbon trawsffiniol y DU Cynulleidfaoedd: * Cwmnïau sy’n bwriadu cynnig gwasanaethau CCS, gan gynnwys safleoedd dal, gweithredwyr rhwydwaith cludo piblinellau, safleoedd storio canolradd, a gweithredwyr storfeydd daearegol. * Safleoedd ETS y DU sy’n ystyried defnyddio piblinellau CCS. * Unrhyw gyfranogwyr posibl eraill yn y gadwyn werth CCS. * Arbenigwyr, academyddion, a sefydliadau yn y trydydd sector â barn ar ein dull arfaethedig. * Dilyswyr ac arbenigwyr technegol ar fonitro, adrodd a dilysu (MRV). * Unrhyw randdeiliaid eraill â diddordeb yn ein hopsiynau polisi CCS. Ehangder tiriogaethol: Mae’r ymgynghoriad hwn yn ymwneud ag opsiynau i ddatblygu ETS y DU, sy’n gweithredu ledled Cymru, Lloegr, yr Alban, a Gogledd Iwerddon. Mae hwn yn ymgynghoriad ar y cyd, a gyhoeddwyd gan Lywodraeth y DU, Llywodraeth yr Alban, Llywodraeth Cymru ac Adran Amaethyddiaeth, yr Amgylchedd a Materion Gwledig Gogledd Iwerddon. ### Sut i ymate Ymatebwch ar-lein yn: [energygovuk.citizenspace.com/energy-markets/uk-ets-regulating-cross-boundary-ccs-pipelines/](https://energygovuk.citizenspace.com/energy-markets/uk-ets-regulating-cross-boundary-ccs-pipelines/) neu E-bostiwch: ukets.consultationresponses@energysecurity.gov.uk Ysgrifennwch at: Emissions Trading Department for Energy Security and Net Zero Third Floor 3 Whitehall Place London SW1A 2EG Wrth ymateb, nodwch a ydych chi’n ymateb fel unigolyn neu’n cynrychioli barn sefydliad. Bydd eich ymateb yn fwyaf defnyddiol os yw’n cael ei fframio mewn ymateb uniongyrchol i’r cwestiynau a ofynnir, er bod croeso i sylwadau a thystiolaeth bellach hefyd. ### Cyfrinachedd a diogelu data Gall yr wybodaeth a roddir gennych mewn ymateb i’r ymgynghoriad hwn, gan gynnwys gwybodaeth bersonol, gael ei datgelu yn unol â deddfwriaeth y DU (Deddf Rhyddid Gwybodaeth 2000, Deddf Diogelu Data 2018 a Rheoliadau Gwybodaeth Amgylcheddol 2004). Os ydych am i’r wybodaeth rydych chi’n ei rhoi gael ei thrin yn gyfrinachol, dywedwch wrthym, ond byddwch yn ymwybodol na allwn warantu cyfrinachedd ym mhob amgylchiad. Ni fydd ymwadiad cyfrinachedd awtomatig a gynhyrchir gan eich system TG yn cael ei ystyried gennym yn gais am gyfrinachedd. Byddwn yn prosesu eich data personol yn unol â’r holl ddeddfau diogelu data perthnasol. Gweler ein [polisi preifatrwydd](https://www.gov.uk/government/publications/desnz-consultations-privacy-notice/privacy-notice-relating-to-consultation-responses-received-by-desnz). Byddwn yn crynhoi’r holl ymatebion ac yn cyhoeddi’r crynodeb hwn ar [GOV.UK](https://www.gov.uk/search/policy-papers-and-consultations?parent=department-for-energy-security-and-net-zero&content_store_document_type%5B%5D=closed_consultations&content_store_document_type%5B%5D=closed_calls_for_evidence&organisations%5B%5D=department-for-energy-security-and-net-zero&order=updated-newest). Bydd y crynodeb yn cynnwys rhestr o enwau neu sefydliadau a ymatebodd, ond nid enwau personol, cyfeiriadau na manylion cyswllt eraill pobl. ### Sicrhau ansawdd Mae’r ymgynghoriad hwn wedi’i gynnal yn unol ag [egwyddorion ymgynghori’r llywodraeth](https://www.gov.uk/government/publications/consultation-principles-guidance). Os oes gennych unrhyw gwynion am y ffordd y cynhaliwyd yr ymgynghoriad hwn, anfonwch e-bost at: bru@energysecurity.gov.uk. ## Rheoleiddio piblinellau CCS sy’n croesi ffiniau rheoleiddiol ETS y DU Mae cludo nwyon tŷ gwydr trwy biblinellau ar gyfer safleoedd storio daearegol yn weithgaredd rheoledig o dan ETS y DU. Felly, mae angen trwyddedau ETS y DU ar weithredwyr piblinellau CCS. Efallai y bydd angen i biblinellau CCS groesi nifer o ffiniau rheoleiddiol ETS y DU cyn cyrraedd safleoedd storio daearegol parhaol ar y môr. Mae Erthygl 10 Gorchymyn Cynllun Masnachu Allyriadau Nwyon Tŷ Gwydr 2020 (‘Y Gorchymyn’) [[footnote 2]](#fn:2) yn nodi, ar gyfer piblinellau CCS: * Asiantaeth yr Amgylchedd (EA) yw’r rheoleiddiwr cyfrifol ar gyfer safleoedd ETS y DU yn Lloegr, * Yr Ysgrifennydd Gwladol, y mae ei swyddogaethau rheoleiddio yn cael eu cyflawni gan y Rheoleiddiwr Petrolewm ar y Môr ar gyfer yr Amgylchedd a Datgomisiynu (OPRED) ar gyfer gweithgareddau CCS ETS y DU, sy’n gyfrifol am safleoedd ym môr tiriogaethol Lloegr sy’n gyfagos i Loegr a sector y DU o’r ysgafell gyfandirol (gan ddechrau ar 12 môr-filltiroedd ar y môr), * Cyfoeth Naturiol Cymru (CNC) yw’r rheoleiddiwr cyfrifol ar gyfer Cymru a môr tiriogaethol Cymru sy’n gyfagos i Gymru, * Asiantaeth Diogelu Amgylchedd yr Alban (SEPA) yw’r rheoleiddiwr cyfrifol ar gyfer yr Alban a môr tiriogaethol yr Alban sy’n gyfagos i’r Alban, ac * Asiantaeth yr Amgylchedd Gogledd Iwerddon (NIEA) yw’r rheoleiddiwr cyfrifol ar gyfer Gogledd Iwerddon a môr tiriogaethol Gogledd Iwerddon sy’n gyfagos i Ogledd Iwerddon. O dan y rheolau presennol, mae hyn yn golygu y byddai cyfrifoldeb am reoleiddio’r biblinell yn trosglwyddo ar bob un o’r ffiniau rheoleiddiol hyn. Felly, byddai angen trwydded gan bob rheoleiddiwr perthnasol ar y gweithredwr, a bydd angen seilwaith monitro i benderfynu faint o CO2 sy’n cael ei drosglwyddo ar bob ffin. Yn achos trosglwyddo cyfrifoldeb o’r corff rheoleiddio ar gyfer y môr tiriogaethol perthnasol (hyd at 12 milltir môr) i’r corff rheoleiddio ar gyfer ysgafell gyfandirol y DU (y tu hwnt i 12 milltir môr), byddai’r ffin hon ar y môr. Er enghraifft, byddai piblinell sy’n rhedeg trwy diriogaeth Lloegr a’r Alban, cyn terfynu mewn safle storio daearegol ar y môr, yn gofyn am drwydded gan Asiantaeth yr Amgylchedd, trwydded gan SEPA, a thrwydded gan OPRED, yn ogystal â seilwaith monitro ar y ffin rhwng yr Alban a Lloegr ac ar y ffin rhwng môr tiriogaethol yr Alban sy’n gyfagos i’r Alban a sector y DU o’r ysgafell gyfandirol. Mae yna hefyd faterion ymarferol heriol sy’n gynhenid i unrhyw seilwaith tanddwr ar gyfer gosod a chynnal seilwaith monitro ar y pwynt trosglwyddo i sector y DU o’r ysgafell gyfandirol neu rhwng moroedd tiriogaethol. Fel y mae, mae’r gofynion hyn yn cynyddu cymhlethdod a chost adeiladu a gweithredu piblinell CCS drawsffiniol. Mae’r Awdurdod yn cydnabod y byddai trefniant rheoleiddio mwy syml yn well. ### Pennu’r rheoleiddiwr ar y tir Er mwyn symleiddio’r gofynion rheoleiddio, mae’r Awdurdod yn ystyried y gofynion rheoleiddio lle mae piblinellau ar y tir yn croesi ffiniau’r DU ar y tir, ac a allent fod angen un drwydded ETS y DU yn unig ar gyfer y rhan o’r biblinell ar y tir. Er mwyn hwyluso hyn, byddai angen inni nodi’r rheoleiddiwr ETS y DU sy’n gyfrifol. Mae’r Awdurdod yn ystyried dau opsiwn posibl ar gyfer pennu cyfrifoldeb rheoleiddiol ar gyfer y rhan o biblinellau CCS trawsffiniol ar y tir. #### Opsiwn 1 – Pennu un rheoleiddiwr ar y tir O dan yr opsiwn hwn, byddai un rheoleiddiwr ETS y DU ar y tir yn cael ei ddynodi ar gyfer y rhan gyfan o biblinell CCS drawsffiniol ar y tir. Byddai hyn yn golygu bod cyfrifoldebau rheoleiddiol presennol yn cael eu dirprwyo o un rheoleiddiwr i’r llall fel y gallent reoleiddio piblinell CCS drawsffiniol y tu hwnt i’w hawdurdodaeth bresennol. Mae sawl dull posibl ar gyfer pennu sut y gellid pennu’r rheoleiddiwr ar y tir: * Gellir pennu’r rheoleiddiwr drwy leoliad ystafell reoli ganolog y biblinell, lle mae darlleniadau offer monitro yn cael eu prosesu a chyfrifiadau llif yn cael eu cynnal. Er enghraifft, os yw’r ystafell reoli wedi’i lleoli yng Nghymru, byddai CNC yn gweithredu fel y rheoleiddiwr ar y tir. * Gellir pennu’r rheoleiddiwr yn ôl lleoliad swyddfa gofrestredig y gweithredwr piblinell yn y DU. * Gall y rheoleiddiwr gael ei bennu gan yr awdurdodaeth y mae’r rhan fwyaf o hyd y biblinell yn mynd drwyddi. Pa ddull bynnag a ddefnyddir i bennu rheoleiddiwr, rydym yn cynnig, mewn achosion o ansicrwydd, y bydd yr Awdurdod yn cael yr hawl i ddynodi rheoleiddiwr ar y tir priodol ar gyfer y biblinell. #### Opsiwn 2 – Rhoi swyddogaethau rheoleiddio ar y cyd O dan yr opsiwn hwn, byddai cyfrifoldeb rheoleiddiol ar gyfer y rhan o biblinell CCS drawsffiniol ar y tir yn cael ei roi ar y cyd i holl reoleiddwyr ETS y DU perthnasol y mae’r biblinell yn croesi eu hawdurdoaethau. Byddai’r rheoleiddwyr perthnasol wedyn yn cytuno ar un rheoleiddiwr arweiniol i arfer swyddogaethau rheoleiddio ar ran y lleill. Byddai’r penderfyniad hwn yn seiliedig ar ba reoleiddiwr sydd yn y sefyllfa orau i reoleiddio’r biblinell ac mae’n debygol y bydd yn cynnwys ystyried y meini prawf uchod a nodir ar gyfer Opsiwn 1. Lle na cheir consensws ymhlith y rheoleiddwyr, bydd yr Awdurdod yn cael yr hawl i ddynodi rheoleiddiwr priodol ar gyfer y biblinell. Mae rheoleiddwyr yn cymryd rhan o gam cynllunio piblinellau i asesu gofynion rheoleiddio amgylcheddol eraill, felly byddai prosiectau piblinellau CCS yn cael eu nodi’n gynnar gan y rheoleiddwyr perthnasol, a gallai ystyriaeth ddigwydd ymhell cyn pan fydd angen trwydded. Byddai gweithredwr y biblinell yn cael ei hysbysu’n uniongyrchol gan ei reoleiddiwr sut y byddai’n cael ei reoleiddio a sut i wneud cais am drwydded. Gallai anfanteision posibl rhoi swyddogaethau rheoleiddio ar y cyd gynnwys cyflwyno ansicrwydd a chymhlethdod cyfreithiol trwy ei gwneud yn ofynnol i reoleiddwyr gytuno ar gyfrifoldeb. Gall y dull hwn gynyddu ymdrechion gweinyddol. At hynny, gallai’r dull leihau eglurder ynghylch pwerau gorfodi rheoleiddwyr a threfniadau codi tâl o’i gymharu â’r rheoliadau sy’n pennu un rheoleiddiwr ar y tir yn glir. Nid ydym yn rhagweld y bydd y rheoleiddiwr sy’n gyfrifol am reoleiddio piblinell yn newid ar ôl ei bennu ar y dechrau, ond os bydd angen gwneud hynny, byddai rheoleiddwyr yn hysbysu gweithredwr y biblinell yn y flwyddyn cyn yr amrywiad arfaethedig i’w trwydded(au). Mae gennym ddiddordeb mewn clywed barn rhanddeiliaid ar y dull mwyaf priodol o bennu’r rheoleiddiwr ar y tir ar gyfer piblinellau CCS trawsffiniol. Cwestiynau: 1. A ydych yn cytuno y dylai fod gofyniad am un drwydded ar y tir yn unig ar gyfer piblinellau CCS trawsffiniol ar y tir? 2. A oes gennych ddull gweithredu a ffefrir rhwng Opsiwn 1 (pennu un rheoleiddiwr ar y tir) ac Opsiwn 2 (rhoi swyddogaethau rheoleiddio ar y cyd i bob rheoledidiwr perthnasol)? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 3. Ar gyfer Opsiwn 1, pa faen prawf ydych chi’n ei ystyried fwyaf priodol ar gyfer pennu’r rheoleiddiwr ar y tir? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 4. A oes unrhyw feini prawf neu ddulliau amgen y dylid eu hystyried ar gyfer pennu rheoleiddiwr piblinell CCS drawsffiniol ar y tir? Os felly, disgrifiwch y meini prawf neu’r dull amgen, a rhowch dystiolaeth lle bo modd. ### Pennu’r rheoleiddiwr ar y môr Rydym eisoes wedi cyflwyno barn yr Awdurdod yn ymgynghoriad mis Mai 2019 ar [Ddyfodol Prisio Carbon y DU](https://assets.publishing.service.gov.uk/media/5d22f7d7ed915d0bc6a0a18f/THE_FUTURE_OF_UK_CARBON_PRICING_-_04072019.pdf) y dylai OPRED fod yn rheoleiddiwr o’r pwynt olaf o fesur ar y tir cyn i’r CO2 gael ei gludo i’r safle storio ar y môr ar gyfer piblinellau yn Lloegr sy’n rhannol ar y tir ac yn rhannol ar y môr. O ran piblinellau a leolir yng Nghymru, yr Alban a Gogledd Iwerddon sy’n rhannol ar y tir ac yn rhannol ar y môr, cynigiodd yr Awdurdod yn ymgynghoriad Mai 2019 y gallai Ysgrifennydd Gwladol yr Adran Diogeledd Ynni a Sero Net ofyn am ganiatâd gan yr awdurdod perthnasol yn yr awdurdodaethau hynny i gyfarwyddo OPRED fel rheoleiddiwr piblinellau CCS yn eu priod diriogaethau. Roedd hyn er mwyn symleiddio’r gofynion monitro, a lliniaru’r heriau ymarferol sy’n gysylltiedig â gosod a chynnal seilwaith monitro 12 milltir môr ar y môr lle byddai OPRED yn cymryd cyfrifoldeb rheoleiddiol oddi wrth reoleiddwyr datganoledig. Ers hynny, mae’r Awdurdod wedi bod yn ystyried gosod terfyn o ddau reoleiddiwr ar gyfer pob piblinell CCS drawsffiniol, ac yn unol â hynny, uchafswm o ddwy drwydded i gyd. Er mwyn symleiddio’r gofynion rheoleiddio yn y modd hwnnw, mae’r Awdurdod yn ystyried dau opsiwn ar gyfer pennu cyfrifoldeb rheoleiddio ar gyfer y rhan ar y môr o bibellau CCS trawsffiniol. #### Opsiwn 1 – Mae’r rheoleiddiwr ar y tir yn parhau i fod y rheoleiddiwr ar gyfer piblinell CCS drawsffiniol tan y safle storio ar y môr Dim ond un rheoleiddiwr sydd gan bob piblinell CCS drawsffiniol ar gyfer yr adrannau ar y tir ac ar y môr, fel y’i pennir gan yr opsiynau rheoleiddiwr ar y tir a nodir uchod (naill ai EA, SEPA, CNC, neu NIEA). Byddai hyn hefyd yn arwain at un drwydded yn unig ar gyfer y biblinell gyfan i’r safle storio ac, yn ei dro, byddai dim ond angen seilwaith monitro ar bwyntiau cychwyn a therfyn rhwydwaith cludo piblinell CCS - gyda’r safle storio yn bwynt terfyn. Byddai OPRED yn parhau i fod yn rheoleiddiwr ETS y DU ar gyfer y safle storio lle mae’r safle hwn wedi’i leoli yn sector y DU o’r ysgafell gyfandirol neu’r môr tiriogaethol sy’n gyfagos i Loegr (h.y. y rhan o’r môr tiriogaethol nad yw’n gyfagos i Ogledd Iwerddon, yr Alban neu Gymru). Sylwer bod gan bob rheoleiddiwr, mewn perthynas ag ETS y DU, yr awdurdod i weithredu dyletswyddau a roddwyd iddo gan y Gorchymyn yn unig, sydd, oherwydd strwythur unigryw ETS y DU, yn ddeddfwriaeth ar y cyd a wnaed ar ran y pedwar awdurdod cenedlaethol sy’n rhan o’r Awdurdod, a deddfwriaeth ETS y DU arall. Felly, nid yw’r opsiwn hwn yn cynnig rhoi pwerau ychwanegol i Lywodraeth Ddatganoledig neu Lywodraeth y DU ac ni ddylid ei ddehongli fel gosod cynsail ar gyfer ehangu’r awdurdodaeth ar gyfer swyddogaethau rheoleiddio eraill unrhyw un o’r rheoleiddwyr. #### Opsiwn 2 – OPRED yw’r unig reoleiddiwr ar gyfer y rhan gyfan o’r biblinell CCS drawsffiniol ar y môr gan gynnwys moroedd tiriogaethol a sector y DU o’r ysgafell gyfandirol Dim ond un rheoleiddiwr ar y tir sydd gan bob piblinell CCS drawsffiniol (naill ai EA, SEPA, CNC, neu NIEA), ac OPRED yw’r unig reoleiddiwr ar y môr lle bydd gofyniad ar gyfer seilwaith monitro ar y pwynt trosglwyddo rhwng y tir a’r môr. Byddai hyn hefyd yn arwain at un drwydded ar gyfer y rhan o’r biblinell ar y môr sy’n mynd i’r safle storio yn ogystal ag un drwydded ar gyfer y rhan ar y tir. Ar gyfer y trosglwyddiad ar y tir/ar y môr hwn, mae’r Awdurdod o’r farn y dylai’r cyfrifoldeb rheoleiddiol drosglwyddo i OPRED yn y pwynt mesur olaf ar y tir, gydag OPRED wedyn yn rheoleiddio’r rhan o’r biblinell ar y môr. Yn yr un modd ag Opsiwn 1, nid yw’r opsiwn hwn yn cynnig rhoi pwerau ychwanegol i Lywodraeth Ddatganoledig neu Lywodraeth y DU ac ni ddylid ei ddehongli fel gosod cynsail ar gyfer ehangu’r awdurdodaeth ar gyfer swyddogaethau rheoleiddio eraill unrhyw un o’r rheoleiddwyr. Mae adran nesaf y ddogfen hon yn amlinellu opsiynau ar gyfer seilwaith monitro mewn perthynas â’r ffin rhwng y môr a’r tir pe bai Opsiwn 2 yn cael ei ddilyn. Cwestiynau: 5. A oes gennych ddull a ffefrir rhwng Opsiwn 1 (mae’r rheoleiddiwr ar y tir yn parhau i fod y rheoleiddiwr ar y môr) ac Opsiwn 2 (OPRED yw’r unig reoleiddiwr ar y môr)? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 6. O ran Opsiwn 2, a ydych chi’n cytuno y dylai cyfrifoldeb rheoleiddio OPRED ddechrau o’r pwynt mesur olaf yn y pwynt trosglwyddo rhwng y tir a’r môr a bennir? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. ### Seilwaith monitro ar gyfer y ffin rhwng y tir a’r môr Ar gyfer Opsiwn 2 (OPRED yw’r unig reoleiddiwr ar y môr ar gyfer piblinellau CCS sy’n croesi i sector y DU o’r ysgafell gyfandirol), bydd angen seilwaith monitro (e.e., CEMS [[footnote 3]](#fn:3) neu AMS [[footnote 4]](#fn:4)) i fonitro CO2 a drosglwyddir ar draws ffin reoleiddiol o’r rheoleiddiwr ar y tir i OPRED. Mae hyn hefyd yn ofynnol ar hyn o bryd yn y pwynt trosglwyddo presennol rhwng yr EA ac OPRED ar lan Lloegr o dan y rheolau cyfredol. Rhaid i’r gweithredwr piblinell CCS adrodd yn flynyddol i’w rheoleiddiwr faint o CO2 sy’n cael ei golli o awyru, gollyngiadau ac allyriadau sy’n dianc, yn ogystal â faint o CO2 sydd wedi’i gludo i’r safle storio ar y môr. Mae’r ffin yn darparu’r pwynt terfyn a’r pwynt cychwyn hwnnw ar gyfer y rheoleiddiwr ar y tir ac ar y môr yn y drefn honno. Mae hyn yn sicrhau bod ETS y DU yn cyfrif yn gadarn am y swm net o nwyon tŷ gwydr sy’n cael eu storio’n ddaearegol. Felly, rydym yn gofyn am farn ar y gofynion priodol ar gyfer seilwaith monitro piblinellau. Efallai y bydd modd defnyddio monitro/mesuryddion cyfredol ar y tir fel ei fod yn dod yn fesurydd dynodedig olaf ar y tir. Fel arall, gallai’r Awdurdod fandadu bod mesuryddion ychwanegol a seilwaith monitro arall yn cael eu hadeiladu ar bwynt addas ar y tir ger blaenlaniad y biblinell, a fyddai wedyn yn bwynt trosglwyddo rheoleiddiol i OPRED. Ar gyfer y ddau bosibiliad hyn, er mwyn sicrhau nad yw cyfrifoldeb ar y tir OPRED yn ymestyn ymhellach nag sydd ei angen, rydym yn argymell bod y pwynt trosglwyddo, ynghyd â’r seilwaith cysylltiedig, fod ar y tir 2 km ar y mwyaf o farc penllanw cymedrig y gorllanw (marc penllanw cyfartalog y gorllanw) ar benlaniad y biblinell. Cwestiynau: 7. Ydych chi’n cytuno y dylid gofyn am fonitro seilwaith a mesuryddion pwrpasol ar y pwynt trosglwyddo rheoleiddiol rhwng y rheoleiddiwr ar y tir a’r rheoleiddiwr ar y môr? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 8. Beth yw eich barn ar ein dull arfaethedig o ofynion seilwaith monitro ar gyfer y trosglwyddiad ar y tir-ar y môr? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 9. Ydych chi’n cytuno na ddylai’r pellter priodol ar gyfer pennu lleoliad y pwynt trosglwyddo ar y tir/ar y môr fod yn fwy na 2 km o benllanw cymedrig y gorllanw? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. ### Costau Cydymffurfio a seilwaith monitro Mae gan yr Awdurdod ddiddordeb mewn datblygu ei ddealltwriaeth o gostau seilwaith monitro (cyfalaf a gweithredol) yn ogystal â chostau o’r ymdrech weinyddol i Fonitro, Adrodd a Dilysu (MRV) allyriadau ar gyfer pob rhan o’r biblinell ar wahân rhag ofn na fydd unrhyw un o’r opsiynau yn yr ymgynghoriad hwn yn cael eu datblygu. Mae’r Atodiad Dadansoddol yn manylu ar ein dealltwriaeth gyfredol, a hoffem wahodd rhanddeiliaid i ddarparu unrhyw ddata perthnasol ynghylch y costau hyn os ydynt ar gael. Cwestiwn: 10. Os oes gennych ddata cost yr ydych yn fodlon ei rannu, naill ai ar seilwaith monitro a/neu gost ddisgwyliedig MRV ETS y DU ar gyfer piblinellau sy’n cludo CO2 i safleoedd storio ddaearegol barhaol, darparwch hwn gyda thystiolaeth gysylltiedig lle bo modd. ### Y Gymraeg Cwestiwn: 11. Beth, yn eich barn chi, fyddai effeithiau tebygol yr opsiynau yr ymgynghorir arnynt ar yr iaith Gymraeg? Mae gennym ddiddordeb arbennig mewn unrhyw effeithiau tebygol ar gyfleoedd i ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg. A ydych chi’n credu bod cyfleoedd i hyrwyddo unrhyw effeithiau cadarnhaol? A ydych chi’n credu bod cyfleoedd i liniaru unrhyw effeithiau andwyol? 12. Yn eich barn chi, a ellid llunio neu newid yr opsiynau sy’n destun ymgynghoriad er mwyn cael effeithiau cadarnhaol neu effeithiau mwy cadarnhaol ar ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg; neu liniaru unrhyw effeithiau negyddol ar ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg? ## Cwestiynau ymgynghori 1. Ydych chi’n cytuno y dylai fod gofyniad am un drwydded ar y tir yn unig ar gyfer piblinellau CCS trawsffiniol ar y tir? 2. A oes gennych ddull gweithredu a ffefrir rhwng Opsiwn 1 (pennu un rheoleiddiwr ar y tir) ac Opsiwn 2 (rhoi swyddogaethau rheoleiddio ar y cyd i bob rheoledidiwr perthnasol)? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 3. Ar gyfer Opsiwn 1, pa faen prawf ydych chi’n ei ystyried fwyaf priodol ar gyfer pennu’r rheoleiddiwr ar y tir? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 4. A oes unrhyw feini prawf neu ddulliau amgen y dylid eu hystyried ar gyfer pennu rheoleiddiwr piblinell CCS drawsffiniol ar y tir? Os felly, disgrifiwch y meini prawf neu’r dull amgen, a rhowch dystiolaeth lle bo modd. 5. A oes gennych ddull a ffefrir rhwng Opsiwn 1 (mae’r rheoleiddiwr ar y tir yn parhau i fod y rheoleiddiwr ar y môr) ac Opsiwn 2 (OPRED yw’r unig reoleiddiwr ar y môr)? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 6. Ar gyfer opsiwn 2, a ydych chi’n cytuno y dylai cyfrifoldeb rheoleiddiol OPRED ddechrau o’r pwynt mesur olaf yn y pwynt trosglwyddo ar y tir/ar y môr dynodedig? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 7. Ydych chi’n cytuno y dylid gofyn am fonitro seilwaith a mesuryddion pwrpasol ar y pwynt trosglwyddo rheoleiddiol rhwng y rheoleiddiwr ar y tir a’r rheoleiddiwr ar y môr? Esboniwch eich ateb a rhowch dystiolaeth ar gyfer eich barn lle bo modd. 8. Beth yw eich barn ar ein dull arfaethedig o ofynion seilwaith monitro ar gyfer y trosglwyddiad ar y tir-ar y môr? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 9. Ydych chi’n cytuno na ddylai’r pellter priodol ar gyfer pennu lleoliad y pwynt trosglwyddo ar y tir/ar y môr fod yn fwy na 2 km o benllanw cymedrig y gorllanw? Esboniwch eich ateb a rhowch dystiolaeth lle bo modd. 10. Os oes gennych ddata cost yr ydych yn fodlon ei rannu, naill ai ar seilwaith monitro a/neu gost ddisgwyliedig MRV ETS y DU ar gyfer piblinellau sy’n cludo CO2 i safleoedd storio ddaearegol barhaol, darparwch hwn gyda thystiolaeth gysylltiedig lle bo modd. 11. Beth, yn eich barn chi, fyddai effeithiau tebygol yr opsiynau yr ymgynghorir arnynt ar yr iaith Gymraeg? Mae gennym ddiddordeb arbennig mewn unrhyw effeithiau tebygol ar gyfleoedd i ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg. A ydych chi’n credu bod cyfleoedd i hyrwyddo unrhyw effeithiau cadarnhaol? A ydych chi’n credu bod cyfleoedd i liniaru unrhyw effeithiau andwyol? 12. Yn eich barn chi, a ellid llunio neu newid yr opsiynau sy’n destun ymgynghoriad er mwyn cael effeithiau cadarnhaol neu effeithiau mwy cadarnhaol ar ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg; neu liniaru unrhyw effeithiau negyddol ar ddefnyddio’r Gymraeg ac ar beidio â thrin y Gymraeg yn llai ffafriol na’r Saesneg? ## Y camau nesaf Bydd yr ymatebion i’r ymgynghoriad hwn yn cael eu defnyddio i ddatblygu penderfyniadau polisi terfynol i’w gweithredu. Bydd yr ymgynghoriad ar agor am 12 wythnos cyn cau. Bydd yr Awdurdod wedyn yn ystyried yr ymatebion ac yn anelu at gyhoeddi Ymateb yr Awdurdod maes o law. ## Atodiad – Crynodeb dadansoddol ### Cefndir ETS y DU Cynllun Masnachu Allyriadau’r DU (ETS y DU) yw un o offerynnau polisi datgarboneiddio blaenllaw’r DU. Mae ETS y DU yn cynnwys allyriadau mewn diwydiant trwm, cynhyrchu pŵer a hedfan. [[footnote 5]](#fn:5) Bydd y cynllun yn ehangu i gynnwys allyriadau morol domestig o fis Gorffennaf 2026. Mae ymgynghoriadau wedi’u cynnal ar ehangu cwmpas pellach i losgi gwastraff, ynni o wastraff ac allyriadau morol rhyngwladol. Yn 2023, cyfanswm allyriadau tiriogaethol y DU oedd tua 385 miliwn tunnell (Mt) o CO2, ac roedd tua 25% (97Mt o CO2) o’r rhain yn dod dan brif gynllun ETS y DU. Yn 2024 roedd gostyngiad mewn allyriadau dan ETS y DU o 11Mt o CO2, wedi’i ysgogi’n bennaf gan ostyngiadau allyriadau yn y sector pŵer a diwydiant. [[footnote 6]](#fn:6) Rhaid i weithredwyr ETS y DU gael lwfansau (a brynwyd mewn arwerthiannau ac yn y farchnad eilaidd neu a ddyrennir heb gost) a’u hildio i sicrhau eu hatebolrwydd o ran allyriadau. Mae gallu cyfranogwyr y farchnad i fasnachu lwfansau yn sicrhau bod datgarboneiddio yn y sectorau

[... truncated]

DESNZlow

UK Emissions Trading Scheme: Regulating cross-boundary CCS pipelines

source

Consultation on regulating cross-boundary CCS pipelines under the UK ETS. Addresses how CO2 transport infrastructure crossing jurisdictional boundaries should be treated.

Niche regulatory question for CCS infrastructure. Important for CCUS deployment but narrow scope.

Source text

The Authority is seeking feedback on options being considered to streamline the UK ETS regulatory requirements for cross-boundary CCS pipelines.

The options aim to reduce the number of UK ETS permits a CCS pipeline crossing into multiple jurisdictions will require which could simplify the monitoring and enforcement requirements for both operators and regulators.

The consultation is aimed at anyone with an interest in CCS policy in the UK Emissions Trading Scheme (ETS), especially companies who plan to operate CCS pipelines.

DESNZlow

Taking part in the UK Emissions Trading Scheme markets

source

DESNZ published updated guidance on participating in UK ETS auctions and secondary markets, incorporating the April 2026 auction reserve price increase from £22 to £28. The guidance details auction clearing mechanisms, cost containment triggers, and eligibility criteria for market participants. ICE Futures Europe continues as the auction platform provider.

This is operational guidance for an existing carbon pricing scheme rather than structural market reform. The auction reserve price inflation adjustment represents parameter tweaking, not fundamental change to incentive structures.

Source text

This guidance explains the operation of the UK ETS markets and how to take part in auctions and in trading on the secondary market.

For background information on the UK ETS markets, see the [UK Emissions Trading Scheme markets](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-markets/uk-emissions-trading-scheme-markets) policy page.

For general guidance on participating in the scheme as an installation operator or aircraft operator, see [Participating in the UK Emissions Trading Scheme](https://www.gov.uk/government/publications/participating-in-the-uk-ets/participating-in-the-uk-ets).

---

This page provides guidance on operation and participation in the UK Emission Trading Scheme (UK ETS) auctions and the secondary market in UK allowances.

Key for Figure 1

PA: Price where the sum of volumes bid exceeded the number of allowances auctioned (would otherwise be auction clearing price).

PB: The prevailing secondary market price.

PC: Auction clearing price because PA is significantly below (determined by ICE) PB

QA: Quantity of allowances available at auction

QB: Quantity of allowances bid at secondary market price

QC: Quantity of allowances sold

Pmin: Auction reserve price

## Partially Cleared Auctions

An auction does not fully clear if there are unsold allowances. Any remaining allowances not sold in a UK ETS auction are redistributed across the following four auctions up to 125% of those auctions’ original number of allowances. Above this limit, allowances will transfer into the market stability mechanism account.

## Auction Reserve Price

The UK ETS currently has an Auction Reserve Price (ARP) of £22, which establishes a minimum price for which allowances can be sold at auctions. Bids below this price will not be successful at auction. The original ARP value of £22 was set in the Auctioning Regulations published on 11 February 2021.

As set out in the [December 2025 Authority Response](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-future-markets-policy), the ARP will be adjusted to reflect inflation, increasing from £22 to £28 in 2026. The legislation for this amendment - [The Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2026](https://www.legislation.gov.uk/uksi/2026/214/contents/made) - has been laid, and the £28 value will come into effect for the 8 April 2026 auction.

From 1 January 2027 onwards, the ARP value will increase yearly in line with inflation, according to GDP Deflator data provided by the Office for National Statistics (ONS). There is further information on the inflation-based ARP increase in the Authority response.

Only one auction of UKAs has ever partially cleared, as described below.

6 October 2021 auction

An auction of 5,187,500 allowances was held by ICE on 6 October 2021. The auction partially cleared, with 4,149,000 allowances being successfully sold at the auction clearing price of £60.00.

Bids that were below £60.00 were determined, according to the methodology employed by ICE, to be significantly below the prevailing secondary market price. £60.00 therefore became the auction clearing price and bids below this level were unsuccessful, resulting in 1,038,500 allowances remaining unsold.

In line with the scheme legislation, these 1,038,500 allowances were allocated across the next four auctions on 20 October, 3 November, 17 November and 1 December.

On 8 October 2021, ICE published an updated auction calendar reflecting the partially cleared auction.

## Participating in the UK ETS secondary market

Once allowances have been released through auctions and free allocation, they can be traded on the UK ETS  secondary market. The secondary market provides a means for market participants to source allowances outside auctions and free allocation, and it enables participants to plan ahead through hedging future carbon costs.

ICE Futures Europe hosts a secondary market for UKA  derivatives. To find out more about how to participate in the secondary market hosted by  ICE  Futures Europe, email  sales-utilities@ice.com.

If you are a UK ETS participant with compliance obligations seeking assistance on participating in the UK ETS  secondary market, you may wish to consider researching brokers for  UK ETS  trading or contacting your commodity trading partner or corporate bank for advice.

## Cost Containment Mechanism

The Cost Containment Mechanism (CCM) provides a means for the UK ETS  Authority to intervene if prices are elevated for a sustained period.

If the CCM is triggered, the UK ETS  Authority will consider what intervention, if any, to make, and this decision will be based on addressing sustained price movements that do not correspond to market fundamentals. If there is no agreement on what action to take, the final decision will be taken by HM Treasury (HMT). This intervention can include:

* redistributing allowances between the current year’s auctions * increasing the volume of allowances to be auctioned by: + bringing forward auctioned allowances from future years + drawing allowances from the market stability mechanism account + auctioning up to 25% of the remaining allowances in the New Entrants’ Reserve + auctioning allowances which form part of the industry cap on free allocation to stationary installations for the current or past scheme years where the amount of free allocation is lower than the industry cap + bringing allowances into auctions from the flexible share

Furthermore, the decision about what intervention, if any, to make will be clearly communicated to participants in a timely manner.

An explanation of the operation of the CCM is set out in the  [Explanatory Memorandum to the  UK ETS  Auctioning Regulations](https://www.legislation.gov.uk/uksi/2021/484/memorandum/contents).

In 2023, the UK ETS Authority consulted on options for the future of the CCM and the [final decision was published](https://www.gov.uk/government/consultations/uk-emissions-trading-scheme-future-markets-policy) in December 2025.

The CCM Trigger Price

The UK  CCM  had lower price and time triggers in the first two years of the  UK ETS  when compared to the equivalent  EU ETS  mechanism: this was to ensure the intervention could be more agile in early years while the  UK ETS  matured.

Until January 2022, the CCM  was triggered if the average end of day settlement price of a UK allowance (UKA) December futures contract was more than 2 times the average price for the preceding 2-year ‘reference period’, for 3 consecutive months (the ‘monitoring period’).

From February 2022 until January 2023, the  CCM would have been triggered if the average end of day settlement price of the relevant  UKA  December futures contract was more than 2.5 times the average price for the reference period for the duration of the monitoring period (3 consecutive months).

From February 2023 onwards, the  CCM  will be triggered if the relevant  UKA  December futures contract is 3 times the average price for the reference period for 6 consecutive months.

The following diagrams show 2 scenarios where the  CCM  would and would not be triggered according to  CCM rules from February 2023 onwards:

![](https://assets.publishing.service.gov.uk/media/64d9ec8e60d123000d32c45b/ccm-triggered.svg)

![](https://assets.publishing.service.gov.uk/media/64d9eca53fde6100134a51ad/ccm-not-triggered.svg)

The CCM was triggered in both December 2021 and January 2022. The UK ETS Authority decided not to intervene in the market on both occasions. See the  [UK ETS Authority Decision Statements](https://www.gov.uk/government/publications/uk-emissions-trading-scheme-ets-authority-cost-containment-mechanism-decisions/uk-ets-authority-statement-cost-containment-mechanism-decision-december-2021)  for more information.

Reference period

The 2-year reference period ends when the monitoring period starts. Until January 2023, the monitoring period was 3 consecutive months. From February 2023 onwards, the monitoring period is 6 consecutive months.

This means that currently the whole period under consideration is 30 months. This is split into 2 components – the 2-year ‘reference period’ followed by the 6-month ‘monitoring period’.

When the 2-year reference period started in 2019, the carbon price calculation included the end of day settlement prices of the EU allowance (EUA) December futures contracts up until 31 December 2020.  EUA  prices were used as a reference due to the limited  UK ETS market data available since the  UK ETS  secondary market only started in May 2021. After 31 December 2020  EUA  prices were no longer counted. This price was converted from EUR to GBP using the respective historical daily spot exchange rate, provided by the Bank of England.

From 1 January 2021 onwards, the end of day settlement prices of the  UKA  December futures contracts is counted. However, from 1 January 2021 to 18 May 2021 there were no UKA  future contracts. Therefore, these days were treated as non-trading days and did not contribute to the 2-year average.

6-month monitoring period – CCM trigger prices and monthly average prices

The monthly average carbon price is calculated by dividing the sum of the end of day settlement prices for the relevant December futures contract during each month by the number of days in the month for which a price is published.

From 1 December 2025 until 30 November 2026, the 2026 December futures contract is used.

In order for the CCM to be triggered from 2023 onwards, there must be 6 consecutive months where monthly average prices are above the trigger price.

Month	2-year reference period	Trigger price	6-month monitoring period	Month 1 average price	Month 2 average price	Month 3 average price	Month 4 average price	Month 5 average price	Month 6 average price	CCM triggered? Yes or No
Mar-26	1 September 2023 - 31 August 2025	£125.38	Sep, Oct, Nov, Dec, Jan, Feb	£56.19	£55.54	£57.41	£62.13	£68.26	£50.83	No
Apr-26	1 October 2023 - 30 September 2025	£127.54	Oct, Nov, Dec, Jan, Feb, Mar	£55.54	£57.41	£62.13	£68.26	£50.83	TBD	No
May-26	1 November 2023 - 31 October 2025	£129.16	Nov, Dec, Jan, Feb, Mar, Apr	£57.41	£62.13	£68.26	£50.83	TBD	TBD	No
Jun-26	1 December 2023 - 30 November 2025	£130.98	Dec, Jan, Feb, Mar, Apr, May	£62.13	£68.26	£50.83	TBD	TBD	TBD	No
Jul-26	1 January 2024 - 31 December 2025	£133.85	Jan, Feb, Mar, Apr, May, Jun	£68.26	£50.83	TBD	TBD	TBD	TBD	No
Aug-26	1 February 2024 - 31 January 2026	£137.71	Feb, Mar, Apr, May, Jun, Jul	£50.83	TBD	TBD	TBD	TBD	TBD	No
Sep-26	1 March 2024 - 28 February 2026	£139.57	Mar, Apr, May, Jun, Jul, Aug	TBD	TBD	TBD	TBD	TBD	TBD	TBD

See the [full table of CCM trigger prices and monthly average prices since September 2021](https://www.gov.uk/government/publications/taking-part-in-the-uk-emissions-trading-scheme-markets/cost-containment-mechanism-ccm-trigger-prices-and-average-monthly-prices-full-table).

The CCM cannot be triggered until at least September 2026, since the trigger price has not been met in at least one of the prior monitoring months as per the 6-month monitoring period table above. To calculate whether the CCM is triggered for September 2026, the relevant reference period is 1 March 2024 to 28 February 2026. The trigger price for September 2026 is £139.57. If the monthly average prices in March, April, May, June, July and August 2026 are all above £139.57, then the CCM will be triggered for September 2026.

Triggering the CCM in any month runs separately from triggering for previous months and depends on the calculation of future monthly average prices.

The UK ETS Authority will update this page monthly with the latest CCM trigger prices and monthly average carbon prices. The next monthly update will be on 14 April 2026.

## Supply of allowances and the Hospital and Small Emitter Reduction Factor (HSERF)

The cap sets the limit on the amount of allowances that can be created each year, as set out in [Chapter 2](https://www.legislation.gov.uk/uksi/2020/1265/part/2/chapter/2) of the Order. The base cap is set out in Regulation 9(10) of the Auctioning Regulations. The final cap is determined by multiplying the base cap by the HSERF. The final cap figure is then used to calculate the auction volume and industry cap (i.e. the maximum number of allowances that can be freely allocated to stationary installations) for the year.

The HSERF reduces the base cap to account for the fact that installations which opt to apply for HSE status do not take part in the main cap-and-trade elements of the UK ETS and are therefore no longer covered under the cap.

The HSERF for the 2021-2025 trading period is 98.3882344%. This means that the final cap for the first trading period is 622,911,946, compared to a base cap of 633,116,297. This reduction has already been applied to the first trading period and factored into the auction calendars.

The HSERF for the 2026-2030 trading period is 97.9175831%. This means that the final cap for the second trading period is 296,616,764, compared to a base cap of 302,924,924. This reduction has been factored into the 2026 Auction Calendar and will be factored into future auction calendars. However, the final cap figure may change to accommodate future scope expansion of the UK ETS in the second trading period. Any changes to the cap will be communicated far in advance.

## Relevant legislation

[The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021](https://www.legislation.gov.uk/uksi/2021/484/contents)  govern the auctioning of UK Allowances (UKAs) and the provision of a secondary market. The Auctioning Regulations and Explanatory Memorandum contain additional policy background relating to  UK ETS  Auctions. DESNZ has been appointed by  HMT as UK Auctioneer for these auctions. This role is required by legislation and is responsible for the conduct of the auctions.

[The Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021](https://www.legislation.gov.uk/uksi/2021/494/contents/made) established a market and auction oversight role for the FCA in the  UK ETS  and established UK emissions allowances as ‘financial instruments’, ensuring they are subject to the correct regulatory treatment.

These regulations have been amended by the  [Recognised Auction Platforms and Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021](https://www.legislation.gov.uk/uksi/2021/513/contents/made). This regulation provides greater clarity on the ARP, the CCM and the eligibility criteria for bidding in UK ETS auctions.

## Related content

* [Participating in the UK Emissions Trading Scheme](https://www.gov.uk/government/publications/participating-in-the-uk-ets/participating-in-the-uk-ets) * [Functioning of the UK carbon market report](https://www.gov.uk/government/collections/functioning-of-the-uk-carbon-market) * [The Greenhouse Gas Emissions Trading Scheme Order 2020](https://www.legislation.gov.uk/uksi/2020/1265/contents)

---

## 3-month monitoring period - CCM trigger prices and monthly average prices

Month	2-year reference period	Trigger price	3-month monitoring period	Month 1 average price	Month 2 average price	Month 3 average price	CCM triggered? Yes or No
Aug-21	1 May 2019 - 30 Apr 2021	£44.74	May, June, July	£49.09	£46.08	£44.15	No
Sep-21	1 June 2019 - 31 May 2021	£45.90	June, July, Aug	£46.08	£44.15	£48.55	No
Oct-21	1 July 2019 - 30 June 2021	£48.37	July, Aug, Sep	£44.15	£48.55	£58.36	No
Nov-21	1 Aug 2019 - 31 July 2021	£50.37	Aug, Sep, Oct	£48.55	£58.36	£60.98	No
Dec-21	1 Sep 2019 - 31 Aug 2021	£52.88	Sep, Oct, Nov	£58.36	£60.98	£60.50	Yes
Jan-22	1 Oct 2019 - 30 Sep 2021	£56.58	Oct, Nov, Dec	£60.98	£60.50	£74.87	Yes
Feb-22	1 Nov 2019 - 31 Oct 2021	£75.76	Nov, Dec, Jan	£60.50	£74.87	£76.70	No
Mar-22	1 Dec 2019 - 30 Nov 2021	£80.90	Dec, Jan, Feb	£74.87	£76.70	£84.85	No
Apr-22	1 Jan 2020 - 31 Dec 2021	£87.99	Jan, Feb, Mar	£76.70	£84.85	£75.90	No
May-22	1 Feb 2020 - 31 Jan 2022	£95.06	Feb, Mar, Apr	£84.85	£75.90	£77.90	No
Jun-22	1 Mar 2020 - 28 Feb 2022	£102.74	Mar, Apr, May	£75.90	£77.90	£83.71	No
Jul-22	1 Apr 2020 - 31 Mar 2022	£110.55	Apr, May, Jun	£77.90	£83.71	£82.04	No
Aug-22	1 May 2020 - 30 Apr 2022	£117.71	May, Jun, Jul	£83.71	£82.04	£80.93	No
Sep-22	1 Jun 2020 - 31 May 2022	£126.13	Jun, Jul, Aug	£82.04	£80.93	£89.05	No
Oct-22	1 Jul 2020 - 30 Jun 2022	£134.06	Jul, Aug, Sep	£80.93	£89.05	£79.41	No
Nov-22	1 Aug 2020 - 31 Jul 2022	£141.41	Aug, Sep, Oct	£89.05	£79.41	£72.96	No
Dec-22	1 Sep 2020 - 31 Aug 2022	£149.86	Sep, Oct, Nov	£79.41	£72.96	£70.50	No
Jan-23	1 Oct 2020 - 30 Sep 2022	£156.91	Oct, Nov, Dec	£72.96	£70.50	£77.58	No

## 6-month monitoring period – CCM trigger prices and monthly average prices

Month	2-year reference period	Trigger price	6-month monitoring period	Month 1 average price	Month 2 average price	Month 3 average price	Month 4 average price	Month 5 average price	Month 6 average price	CCM triggered? Yes or No
Feb-23	1 Aug 2020 - 31 Jul 2022	£169.69	Aug, Sep, Oct, Nov, Dec, Jan	£89.05	£79.41	£72.96	£70.50	£77.58	£69.09	No
Mar-23	1 Sep 2020 - 31 Aug 2022	£179.83	Sep, Oct, Nov, Dec, Jan, Feb	£79.41	£72.96	£70.50	£77.58	£69.09	£82.82	No
Apr-23	1 Oct 2020 - 30 Sep 2022	£188.30	Oct, Nov, Dec, Jan, Feb, Mar	£72.96	£70.50	£77.58	£69.09	£82.82	£77.23	No
May-23	1 Nov 2020 - 31 Oct 2022	£196.08	Nov, Dec, Jan, Feb, Mar, Apr	£70.50	£77.58	£69.09	£82.82	£77.23	£68.92	No
Jun-23	1 Dec 2020 - 30 Nov 2022	£203.09	Dec, Jan, Feb, Mar, Apr, May	£77.58	£69.09	£82.82	£77.23	£68.92	£57.68	No
Jul-23	19 May 2021 - 31 Dec 2022	£210.76	Jan, Feb, Mar, Apr, May, Jun	£69.09	£82.82	£77.23	£68.92	£57.68	£54.77	No
Aug-23	19 May 2021 - 31 Jan 2023	£210.59	Feb, Mar, Apr, May, Jun, Jul	£82.82	£77.23	£68.92	£57.68	£54.77	£49.79	No
Sep-23	19 May 2021 - 28 Feb 2023	£212.23	Mar, Apr, May, Jun, Jul, Aug	£77.23	£68.92	£57.68	£54.77	£49.79	£43.62	No
Oct-23	19 May 2021 - 31 Mar 2023	£213.15	Apr, May, Jun, Jul, Aug, Sep	£68.92	£57.68	£54.77	£49.79	£43.62	£39.16	No
Nov-23	19 May 2021 - 30 Apr 2023	£212.91	May, Jun, Jul, Aug, Sep, Oct	£57.68	£54.77	£49.79	£43.62	£39.16	£43.48	No
Dec-23	1 Jun 2021 - 31 May 2023	£212.28	Jun, Jul, Aug, Sep, Oct, Nov	£54.77	£49.79	£43.62	£39.16	£43.48	£41.89	No
Jan-24	1 Jul 2021 - 30 June 2023	£213.38	Jul, Aug, Sep, Oct, Nov, Dec	£49.79	£43.62	£39.16	£43.48	£41.89	£39.31	No
Feb-24	1 Aug 2021 - 31 July 2023	£214.23	Aug, Sep, Oct, Nov, Dec, Jan	£43.62	£39.16	£43.48	£41.89	£39.31	£36.98	No
Mar-24	1 Sep 2021 - 31 Aug 2023	£213.44	Sep, Oct, Nov, Dec, Jan, Feb	£39.16	£43.48	£41.89	£39.31	£36.98	£35.35	No
Apr-24	1 Oct 2021 - 30 Sep 2023	£211.18	Oct, Nov, Dec, Jan, Feb, Mar	£43.48	£41.89	£39.31	£36.98	£35.35	£36.60	No
May-24	1 Nov 2021 - 31 Oct 2023	£208.90	Nov, Dec, Jan, Feb, Mar, Apr	£41.89	£39.31	£36.98	£35.35	£36.60	£35.95	No
Jun-24	1 Dec 2021 - 30 Nov 2023	£206.53	Dec, Jan, Feb, Mar, Apr, May	£39.31	£36.98	£35.35	£36.60	£35.95	£41.05	No
Jul-24	1 Jan 2022 - 31 Dec 2023	£202.29	Jan, Feb, Mar, Apr, May, Jun	£36.98	£35.35	£36.60	£35.95	£41.05	£47.44	No
Aug-24	1 Feb 2022 - 31 Jan 2024	£197.27	Feb, Mar, Apr, May, Jun, Jul	£35.35	£36.60	£35.95	£41.05	£47.44	£41.78	No
Sep-24	1 Mar 2022 - 29 Feb 2024	£191.36	Mar, Apr, May, Jun, Jul, Aug	£36.60	£35.95	£41.05	£47.44	£41.78	£39.92	No
Oct-24	1 Apr 2022 - 31 Mar 2024	£186.57	Apr, May, Jun, Jul, Aug, Sep	£35.95	£41.05	£47.44	£41.78	£39.92	£40.47	No
Nov-24	1 May 2022 - 30 Apr 2024	£181.40	May, Jun, Jul, Aug, Sep, Oct	£41.05	£47.44	£41.78	£39.92	£40.47	£38.01	No
Dec-24	1 June 2022 - 31 May 2024	£175.85	Jun, Jul, Aug, Sep, Oct, Nov	£47.44	£41.78	£39.92	£40.47	£38.01	£37.67	No
Jan-25	1 July 2022 - 30 June 2024	£171.56	Jul, Aug, Sep, Oct, Nov, Dec	£41.78	£39.92	£40.47	£38.01	£37.67	£35.84	No
Feb-25	1 August 2022 - 31 July 2024	£166.62	Aug, Sep, Oct, Nov, Dec, Jan	£39.92	£40.47	£38.01	£37.67	£35.84	£35.84	No
Mar-25	1 September 2022 - 31 August 2024	£160.15	Sep, Oct, Nov, Dec, Jan, Feb	£40.47	£38.01	£37.67	£35.84	£35.84	£44.31	No
Apr-25	1 October 2022 - 30 September 2024	£155.25	Oct, Nov, Dec, Jan, Feb, Mar	£38.01	£37.67	£35.84	£35.84	£44.31	£43.27	No
May-25	1 November 2022 - 31 October 2024	£150.84	Nov, Dec, Jan, Feb, Mar, Apr	£37.67	£35.84	£35.84	£44.31	£43.27	£45.78	No
Jun-25	1 December 2022 - 30 November 2024	£146.72	Dec, Jan, Feb, Mar, Apr, May	£35.84	£35.84	£44.31	£43.27	£45.78	£51.34	No
Jul-25	1 January 2023 - 31 December 2024	£141.63	Jan, Feb, Mar, Apr, May, Jun	£35.84	£44.31	£43.27	£45.78	£51.34	£51.12	No
Aug-25	1 February 2023 - 31 January 2025	£137.39	Feb, Mar, Apr, May, Jun, Jul	£44.31	£43.27	£45.78	£51.34	£51.12	£49.17	No
Sep-25	1 March 2023 - 28 February 2025	£132.92	Mar, Apr, May, Jun, Jul, Aug	£43.27	£45.78	£51.34	£51.12	£49.17	£51.43	No
Oct-25	1 April 2023 - 31 March 2025	£128.38	Apr, May, Jun, Jul, Aug, Sep	£45.78	£51.34	£51.12	£49.17	£51.43	£56.19	No
Nov-25	1 May 2023 - 30 April 2025	£125.86	May, Jun, Jul, Aug, Sep, Oct	£51.34	£51.12	£49.17	£51.43	£56.19	£55.54	No
Dec-25	1 June 2023 - 31 May 2025	£124.96	Jun, Jul, Aug, Sep, Oct, Nov	£51.12	£49.17	£51.43	£56.19	£55.54	£57.41	No
Jan-26	1 July 2023 - 30 June 2025	£124.44	Jul, Aug, Sep, Oct, Nov, Dec	£49.17	£51.43	£56.19	£55.54	£57.41	£62.13	No
Feb-26	1 August 2023 - 31 July 2025	£124.45	Aug, Sep, Oct, Nov, Dec, Jan	£51.43	£56.19	£55.54	£57.41	£62.13	£68.26	No
Mar-26	1 September 2023 - 31 August 2025	£125.38	Sep, Oct, Nov, Dec, Jan, Feb	£56.19	£55.54	£57.41	£62.13	£68.26	£50.83	No
Apr-26	1 October 2023 - 30 September 2025	£127.54	Oct, Nov, Dec, Jan, Feb, Mar	£55.54	£57.41	£62.13	£68.26	£50.83	TBD	No
May-26	1 November 2023 - 31 October 2025	£129.16	Nov, Dec, Jan, Feb, Mar, Apr	£57.41	£62.13	£68.26	£50.83	TBD	TBD	No
Jun-26	1 December 2023 - 30 November 2025	£130.98	Dec, Jan, Feb, Mar, Apr, May	£62.13	£68.26	£50.83	TBD	TBD	TBD	No
Jul-26	1 January 2024 - 31 December 2025	£133.85	Jan, Feb, Mar, Apr, May, Jun	£68.26	£50.83	TBD	TBD	TBD	TBD	No
Aug-26	1 February 2024 - 31 January 2026	£137.71	Feb, Mar, Apr, May, Jun, Jul	£50.83	TBD	TBD	TBD	TBD	TBD	No
Sep-26	1 March 2024 - 28 February 2026	£139.57	Mar, Apr, May, Jun, Jul, Aug	TBD	TBD	TBD	TBD	TBD	TBD	TBD

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Closes 4 Jun 2026 (60 days remaining)

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Summary

Timeline

Consultation closes4 Jun 2026

Areas affected

CCUSUK ETScarbon pricinggeneratorspipelineswholesale market

Related programmes

CCUS programmeClean Power 2030Net ZeroUK Emissions Trading Scheme

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