On 12 February 2025, the UK Emissions Trading Scheme (ETS) Authority launched a consultation on proposals for extending the UK ETS beyond the end of Phase I at midnight on 31 December 2030.
Background
The UK ETS is a cap-and-trade scheme that sets an overall limit on emissions for the sectors covered by the scheme. The downward trajectory of the cap is intended to drive emissions reductions in the covered sectors towards UK-wide climate targets.
Phase I of the ETS runs from 1 January 2021 until 31 December 2030. In December 2023, the long-term pathway for the UK ETS was published, setting out the Authority’s continuing commitment to the long-term future of the UK ETS. The Authority also announced its intention (subject to consultation) to continue the UK ETS beyond 2030 until at least 2050.
Consultation
The Authority is now seeking input on proposals for extending the UK ETS beyond the end of Phase 1, including in particular:
- Extending the UK ETS into a second phase from 1 January 2031 onward.
- The length of a post-2030 Phase II.
- Whether to allow banking of emissions allowances between Phase I and a post-2030 Phase II of the Scheme.
Next steps
The deadline for responses to the consultation is 9 April 2025.