Proposals to extend the UK emissions trading system

The UK Emissions Trading Scheme (ECJ) Today, the Office published a consultation package on UK enlargement ECJ include energy from the waste and waste incineration sectors. It is also consulting on the feasibility of integrating engineered GHG removal, such as direct capture of carbon dioxide from the air, and whether high-quality GHG removal from natural sources would be appropriate under this program.

The ECJ is a key part of the UK’s approach to tackling climate change. It requires operators covered by the program to obtain allowances for each unit of carbon emitted. These allowances can be traded between participants, generating a carbon price that encourages companies to invest in cleaner or renewable energy sources and improve energy efficiency.

Great Britain ECJ it currently applies to the aviation, energy and industrial sectors, but since its creation in 2021, the Authority has been examining how carbon pricing could impact decarbonization across much of the economy.

Stakeholders are invited to share their views on 2 consultations to further reduce greenhouse gas emissions and support progress towards net zero emissions. This follows previous consultation commitments made last year as part of the programme’s ambitious reforms.

In a joint statement, UK Emissions Trading Authority ministers: Lord Callanan, Huw Irranca-Davies MSMairi McAllan MSPAndrew Muir MLAAnthony Browne MP and Gareth Davies MP said:

This consultation builds on our commitments to provide greater transparency on UK enlargement ECJ to energy from the waste and waste incineration sectors and integrating greenhouse gas removal into the system.

The waste emissions consultation will help provide confidence in driving investment in decarbonisation, as well as helping businesses make the necessary preparations to expand the program. For greenhouse gas removal, this is an important step towards building a thriving greenhouse gas removal market in the UK.

2 consultations include:

• like Great Britain ECJ will expand to include fossil fuels CO2 emissions from energy from waste and waste incineration from 2028. This includes a two-year transition period for the sector from 2026, during which emissions will be monitored, reported and verified, with no obligation to purchase or donate. ECJ eligibility for full membership in 2028. This will dovetail with other initiatives to decarbonise the sector by providing incentives for industry to adopt decarbonisation technologies
• how UK-developed greenhouse gas removal technologies, such as direct air carbon capture, where carbon dioxide is removed from the air and permanently stored, can be incorporated in the UK ECJ. This is to ensure a long-term market for GGR. It also asks whether carbon stored from the creation of new forests in the UK could be integrated into the UK ECJ

These will be followed in due course by two further consultations on how the UK will expand ECJ to the national maritime sector from 2026 and how the program takes into account methods of moving caught fish other than pipelines CO2 for storage, including by road, rail or sea.

Great Britain ECJ The body includes the UK Government, the Scottish Government, the Welsh Government and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland. The program was launched in January 2021, after the UK left the EU ECJ.

Background

Consultations are now open: