Carbon Emissions: UK Relations with EU
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the additional cost to businesses and consumers since the beginning of 2025 arising from increase UK ETS Allowance prices following the announcement of the Government’s intention to link the UK Emissions Trading Scheme with the EU Emissions Trading Scheme.
Answered by Chris McDonald
The price of carbon allowances in the UK Emissions Trading Scheme is set by the market.
As the conveners of the market the Government is not able to comment on current prices and price movements.
Linking the UK ETS and EU ETS is expected to bring significant economic benefits to the UK.
These include for example providing businesses with access to a larger, stable carbon market; and the removal of some of the regulatory barriers in sectors like CO2 storage.
Additionally, linking is expected to create the conditions for mutual CBAM exemptions, removing a major barrier to trade and lowering costs for UK firms.
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