Developing the UK ETS Guidance: Carbon Market Experts

The Swan Energy team has produced a guidance document to summarise the updates shared in: Developing the UK Emissions Trading Scheme (UK ETS) – Main Response


We are sharing key points for different audiences and this update is for Carbon Market Experts.

1 – Unallocated Free Allowances and Flexible Share

The Authority has decided to bring 53.5 million unallocated allowances to auction over 2024-2027. This will ensure there is no sudden drop in allowances between 2023 and 2024 allowing the market time to adapt. It will also sufficiently mitigate a CSCF between 2024-2026 and create a reserve of allowances for future mitigation of CSCF.

The Authority has also decided to retain 29.5 million allowances in reserve as the flexible share, subject to a review later in 2023. These allowances can be utilised for market stability intervention and future (post 2026) CSCF mitigation.

2 – Future UK ETS Market Policy

No changes will be implemented at present. A further consultation will be released in due course.

3 – Greenhouse Gas Removals

The Authority believes that the UK ETS is an appropriate long-term market for GGRs. Included GGRs must meet the robust standards that will be set by the Authority. These will include engineered and nature-based GGRs.

Decarbonisation must remain the primary goal however GGRs must be employed in order for the UK to reach net-zero.

4 – Flexible Share

UK ETS legislation will be amended to allow the Authority to create the total number of allowances from the flexible share in a scheme year, in addition to the annual cap.

If anyone would like to receive the full summary document from Swan Energy, please call us on 01484 843867 or email and we’ll be in touch.

Swan Energy has been involved with the UK ETS since its inception and delivers 100% compliance for our clients. Click here to find out more about our service.

Rebecca Scarratt

Carbon Consultant

Rebecca Scarratt

Carbon Consultant

Rebecca has joined the Swan Energy team in 2021. She graduated from the University of Hull with a BSc in Geology with Physical Geography in 2020 and went on to do a MSc in Renewable Energy. Her Masters’ thesis focused on how future climate change may impact the Humber region’s wind energy sector and how adaptation strategies could be used to reduce vulnerability.

In her role at Swan Energy, Rebecca supports the consultancy work the team does with clients across the UK.