UK ETS Consultation: Carbon Market Experts

Swan Energy has produced a guidance document to summarise the Developing the UK Emissions Trading Scheme – UK ETS consultation document under  a number of headlines – one being for Carbon Market Experts.

In summary:

 

1 – The Authority proposes that any unallocated allowances will be used to mitigate against the application of a CSCF and smooth the transition to the NZCC.

The Authority wishes to hear your thoughts on the following. This section relates to Questions 29 – 32 in the response survey.

  • Do you agree that a portion of the unallocated allowances and/or flexible share should be used to mitigate against the application of a CSCF?
  • Do you agree that a portion of the unallocated allowances and/or flexible share should be used to smooth the transition to the NZCC?

 

2 – The future UK ETS market policy requires review.

The Authority wishes to hear your thoughts on the following. This section relates to Questions 33 – 45 in the response survey.

  • Are there features of ETS markets that that put them at greater risk of market abuse than other financial markets?
  • Are there other drivers of evolving market conditions that future UK ETS markets policy should consider?
  • How would these drivers impact market stability?
  • Do you agree that these are the right objectives for markets policy as the UK ETS matures?
  • Do you agree with the withdrawal of the ARP?
  • Should the ARP be replaced with another mechanism?
  • Does the CCM still serve the purpose it was intended for?
  • Is the current auction process still effective and efficient?
  • Does the current banking and borrowing policy serve the purpose it was intended for?

 

3 – The Authority proposes that the UK ETS could become a market for Greenhouse Gas Removals.

The Authority wishes to hear your thoughts on the following. This section relates to Questions 147 – 164 in the response survey.

  • Do you believe the UK ETS could be an appropriate long-term market for GGRs?
  • Do you believe the UK ETS needs to be adapted in order to include GGRs?
  • How would including GGRs in the UK ETS impact wider ecosystem services and/or UK voluntary carbon markets?
  • What eligibility requirements should be considered for the inclusion of GGRs in a domestic market?
  • Should a GGRs ability/inability to permanently remove carbon from the atmosphere affect its eligibility for compliance?
  • Should GGRs be incorporated into the UK ETS or should a separate, but linked, market be established?

 

4 – The Authority proposes to allow the Authority to create the total number of allowances from the flexible share in a scheme year.

The Authority wishes to hear your thoughts on the following if you agree with the proposals. This section relates to Question 177 in the response survey

 

 If anyone would like to receive our full summary document which includes more detail for carbon market experts , please call us on 01484 843867 or email info@swanenergy.co.uk and we’ll be in touch.

 

Swan Energy has been involved with the UK ETS (formerly EU ETS) since its conception 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.