The UK ETS Authority has determined the civil penalty carbon price for use during the 2026 reporting year will be £49.41.
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 MW
- 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. If an installation’s annual emissions are below their target for the 2026 reporting year, any excess will be rolled into the installation’s 2027 target.
It is important to note that the HSE list for the 2026-2030 allocation period was published in October of this year, and applications are now closed, meaning there will be no more new HSEs until reporting year 2031.
How is the carbon price calculated?
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 – £49.41 for 2026 reporting.
This price is the average daily trading price of a single UK ETS allowance over the previous 12 months. In the case of the 2026 price above, this is the average end of day settlement carbon price in 2025 for the 12-month period ending on 11th November 2025.
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 chart below shows carbon prices have been gradually increasing during this time period.
Figure 1: Average Weekly UKA Price 08/11/2024-14/11/2025; Prices taken from Redshaw Advisors‘ WEEKLYRED Publication.
The 2026 Civil Penalty Carbon Price has increased compared to 2025’s price. Below are the annual UK ETS Civil Penalty Carbon Price figures going back to 2021.
| Reporting Year | UK ETS Civil Penalty Price | Change from Previous Year |
| 2021 | £ 47.96 | |
| 2022 | £ 52.56 | 9.6% |
| 2023 | £ 83.03 | 58.0% |
| 2024 | £ 64.90 | -21.8% |
| 2025 | £ 41.84 | -35.5% |
| 2026 | £ 49.41 | 18.1% |
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