The 2026 UK ETS baseline window (1 April-30 June) is the second of two submissions required in preparation for the next allocation period beginning in 2027. It determines how much free allocation full participant installations will receive for 2027-2030 and how exposed they may be to carbon costs for the rest of the decade.
Due to the Government’s delay of the next allocation period from 2026 to 2027, the baselining process was split into two stages. In the 2025 window, sites eligible for free allocation were required to submit a verified baseline data report (BDR) outlining their activity level for the baseline period 2019–2023. Installations joining the Hospital/Small Emitter (HSE) scheme were also required to submit their credentials to opt out of the main scheme from 2026.
Due to the pandemic’s effect on industry, operators will be able to exclude either 2020 alone or both 2020 & 2021 from the historical activity level (HAL) which was submitted last year.
If operators experienced abnormally low years during the pandemic, this could increase free allocation received.
For the first time, operators must declare if they have products covered by the incoming UK Carbon Border Adjustment Mechanism (CBAM). Any sites which contribute to CBAM regulated goods must split relevant energy between CBAM and non-CBAM production. From January 2027 the UK CBAM will apply a carbon price to imported goods from the aluminium, cement, fertiliser, hydrogen, and iron/steel sectors.
As this split was not submitted in the 2026 baseline window, installations will have to employ third party verification during the 2027 window.
2026 is a critical year for assurance and compliance and our team is here to help and support you through the UK ETS Baseline Cycle.
Swan Energy has been involved with the UK ETS since its inception and delivers 100% compliance for clients. We are a safe pair of hands. Click here to find out about how we support clients with compliance and reporting.
We offer a consultancy service to support you through the 2026 UK ETS Baseline Cycle. Our service gives you the confidence that your baseline submission is complete, accurate and verified, where necessary. We support our clients through every step of the process, and our service is always tailored to your needs. It can include:
assurance of baseline data, sub‑installation boundaries, and CBAM classifications.
affect free allocation outcomes for 2027–2030 and comparison with HSE targets where applicable.
affect free allocation outcomes for 2027-2030 and comparison with HSE targets where applicable.
We support over 90 UK installations with their mandatory energy reporting.
Swan Energy reported over one million tonnes of CO2 for ETS clients in the 2024 reporting year.
Average cost of Carbon. Data from 2025.
Do you have more questions about UK ETS? The Swan Energy team has lots of KNOW HOW and we are experts in this field. Tap into our bank of knowledge…
Swan Energy
Cygnus House, 3 Ned Lane
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