The UK ETS Authority has recently published various updates and consultations that will affect the future of the UK ETS. Below is a quick summary of those which have been released recently; taken from UK ETS bulletins.
UK ETS Charges Proposal for GHG Emissions.
This consultation is about the Environment Agency’s proposed changes to charges for greenhouse gas emissions. The consultation document contains:
- A guide explaining how the charges are calculated.
- A draft charging scheme for April 2025 onwards.
And seeks views on the charges for the following schemes:
- UK ETS for installations and aviation.
- CORSIA.
- UK ETS and national registries.
- Proposed UK ETS expansion to maritime activities, energy from waste, and waste incineration installations from January 2026.
This consultation closes 24 January 2025 and here is a link to further details: UK ETS Charges Proposal for GHG Emissions.
UK ETS Free Allocation Review – Carbon Leakage.
In the 2023 UK ETS Free Allocation Review consultation, the Authority committed to publish a draft UK Carbon Leakage List and to put forward further options on free allocation adjustments for CBAM sectors.
The interim consultation is seeking stakeholder views on:
- Two options for the Carbon Leakage list – a Carbon Leakage List formulated using UK-specific data, or the option of retaining the current list.
- How free allocations for CBAM covered sectors should be adjusted from 2027.
The consultation closes 10 March 2025 and here is a link to further details: UK ETS Free Allocation Review – Carbon Leakage.
UK ETS Scope Expansion – Maritime Sector.
The UK ETS Authority is seeking input on proposals for expanding the UK Emissions Trading Scheme to the maritime sector.
It seeks views on:
- The scope of the scheme (definition of a domestic voyage, thresholds for inclusion, the inclusion of methane and nitrous oxide emissions, and exemptions from the scheme).
- Details around how to adjust the UK ETS cap to include emissions from the maritime sector .
- Participating in the scheme (regulatory regime and operator requirements, monitoring, reporting and verification, point of obligation and guidance) .
- Impacts of the scheme (decarbonisation impacts, potential distributional impacts and carbon leakage risk; equality considerations).
- Potential future expansion of the UK ETS to additional maritime emissions, with a future review of the threshold and coverage of international routes.
The consultation closes 23 January 2025 and here is a link to further details:UK ETS Scope Expansion – Maritime Sector.
UK ETS Scope Expansion – CCS: Non-pipeline transport of carbon dioxide Consultation.
The UK ETS Authority is consulting on a regulatory framework which will aim to recognise non–pipeline transport within the UK Emissions Trading Scheme.
The consultation proposes options and/or is seeking views on:
- ETS NPT regulatory framework.
- Accounting for NPT transport emissions.
- Shipping and multiport journeys.
- Intermediate CO2 storage facilities and CO2 mixing .
- Interactions between the proposed NPT policy and greenhouse gas removals (GGRs).
- The minded to position that the NPT policy will not require an adjustment to the ETS cap.
The consultation closes 23 January 2025 and here is a link to further details: UK ETS scope expansion – CCS: non-pipeline transport of carbon dioxide – GOV.UK
UK Department for Transport consultation on implementation of CORSIA in the UK.
The UK Department for Transport (DfT) has launched a consultation on implementing the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in the UK. The consultation seeks views on draft legislation for CORSIA and options for how CORSIA could interact with the UK ETS. The consultation seeks views on:
- Draft secondary legislation covering the requirements for aeroplane operators to offset their CO2 emissions for CORSIA. This follows the implementation of CORSIA’s monitoring, reporting and verification rules in UK law in 2021.
- Options for how CORSIA and the UK ETS should apply to those flights in scope of both schemes (flights departing the UK and arriving in the European Economic Area or Switzerland).
The consultation closes 10 February 2025 and here is a link to further details: Implementing the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
UK ETS Authority Response on extending the UK ETS First Free Allocation Period.
A consultation was published in September 2024, which detailed plans to delay the start of the second allocation period from 2026 to 2027.
The Authority response confirms these plans will come into effect, and the current allocation period will extend until the end of 2026. This means the start of the next allocation period will align with the introduction of the CBAM, consulted on in early 2024.
Further details abut this consultation are here: UK ETS: Free Allocation Review – Moving the second UK ETS free allocation period; Authority Response.
The UK ETS Authority is holding a webinar to give an overview of the Free Allocation Review on 14 January 2025 at 10:00. The form to sign up can be found here.
