UK Emissions Trading Scheme
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of purchasing Emissions Trading Scheme permits in the secondary market on the cost to businesses.
Answered by Chris McDonald
The price of carbon allowances in the UK Emissions Trading Scheme is set by the market. A market-determined price of carbon is the most efficient way to decarbonise the traded sector.
The UK ETS Authority sets the scheme’s cap, which sets a limit on the volume of greenhouse gases participants captured by the scheme can emit.
In 2024 the UK ETS cap was aligned to net zero. This ensures the covered sectors will reduce their emissions in line with the UK’s climate target and establishes a long-term investment signal. An impact assessment was conducted, including costs to businesses.
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