In February 2025, Ed Miliband, then Secretary of State for Energy Security and Net Zero, commissioned an independent review of Greenhouse Gas Removals (GGRs) and their role in helping the UK meet its net zero targets. The review came out in October 2025 and set out 30 recommendations across policy, regulation, markets and new technologies. The Starmer Government published its response in July, offering insight into the growing role GGRs will play in the UK Emissions Trading Scheme (UK ETS).
1 – Restating the ambition to incorporate Greenhouse Gas Removals into the UK ETS ‘as soon as practicable’
The Government has discussed integrating GGRs into the UK ETS since the Developing the UK ETS consultation in early 2022, and has repeated this intention across several consultations since.
After the 2022 consultation, the Government launched Integrating Greenhouse Gas Removals into the UK Emissions Trading Scheme in mid‑2024 and released its response in July 2025.
The 2025 response confirmed plans to legislate for GGR inclusion by the end of 2028 and make integration operational by the end of 2029. It also confirmed that removals will not sit in a separate market. The latest update shows the Government still intends to follow this timeline.
2 – The UK ETS will create demand for Greenhouse Gas Removals
The Government expects the UK ETS, alongside the voluntary carbon market, to create long‑term demand for GGRs. Removals will help balance residual emissions from sectors that are difficult to decarbonise.
However, the response stresses that GGRs must support emissions reduction rather than replace it. The Government may introduce mechanisms that stop operators relying solely on removals instead of cutting emissions.
3 – High‑integrity removals are fundamental
The review and Government response emphasise that any GGRs used in the UK ETS must be:
– Measurable
– Verifiable
– Additional
– Permanent
– Supported by robust monitoring, reporting and verification (MRV)
The UK is developing its GGR standard, and the Government is likely to introduce regulated MRV across all GGR technologies to ensure a market built on integrity, transparency and confidence.
Engineered removals may lead the market initially because they can demonstrate permanence and effectiveness more reliably than nature‑based approaches. This may change as evidence for other methods improves.Looking ahead
Looking ahead
GGRs are increasingly likely to join the UK ETS in the near future, regardless of political changes. The Government views the GGR sector as a key growth industry and plans to use the UK ETS to create long‑term demand.
Before that demand emerges, the Government must complete significant market design work. Previous consultations proposed a “one‑in, one‑out” model: each tCO₂e from an eligible GGR credit would cancel one UK ETS Allowance (UKA), ensuring removals do not raise the overall emissions cap.
Meanwhile, the EU ETS is taking a different approach. Current proposals favour centrally purchased engineered removals managed by the European Commission rather than market participants. Under this model, the emissions cap would increase by the number of allowances added. If adopted, GGR integration will form part of the wider post‑2030 EU ETS reform.
With the UK prioritising rapid GGR market growth and the EU favouring a more cautious, centralised model focused on emissions reduction, differences between the two systems could complicate any future UK–EU ETS linking.
Swan Energy will continue to monitor GGR policy developments in both schemes and support clients as the ETS landscape evolves. For further discussion, please get in touch.
