The UK ETS Authority has determined the carbon price for use in civil penalties during the 2025 reporting year will be £41.84.
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What is the civil penalty carbon price?
Hospitals and small emitters (HSEs) are installations within UK ETS that can chose to opt out of the main scheme, if they meet both of the following criteria:
- thermal input capacity less than 35 MW2025CCarb
- annual emissions less than 25 000 tCO2
These installations do not need to purchase and surrender allowances but instead are given an annual emissions target, which decreases each year. In lieu of surrendering allowances, these installations must pay a set rate per tonne of CO2 that they emit over their target for that reporting year.
Each year at the end of November, the UK ETS Authority calculates the carbon price that will be used in civil penalties in the following reporting year – £41.84 for 2025 reporting.
How is the carbon price calculated?
This price is the average daily trading price of a single UK ETS allowance over the previous 12 months. In the case of the 2025 price above, this is the daily average carbon price traded on the carbon exchange between the 11th of November 2023 and the 11th of November 2024.
The civil penalty rate for HSEs is closely linked to the cost of allowances for full UK ETS participants, although any change to the cost of allowances isn’t reflected in the civil penalty rate until the following reporting year.
The 2025 Civil Penalty Carbon Price is the lowest it has been since the start of the UK ETS. Below are the yearly Civil Penalty Carbon Price figures going back to 2021.
- 2021 – £47.96
- 2022 – £52.56
- 2023 – £83.03
- 2024 – £64.90
- 2025 – £41.84
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