Morning, Monday, 8th September 2025
Online
This conference will examine next steps for the UK Emissions Trading Scheme. Areas for discussion include options for expanding the scope of the scheme, integrating greenhouse gas removal technologies and voluntary carbon markets, aligning with international regimes such as the EU ETS, and taking forward long-term strategy and governance as the UK ETS moves towards its second allocation phase.
It follows significant recent policy developments, including an agreement in principle to link the UK and EU carbon markets as part of the recent UK-EU agreement, alongside funding commitments for carbon capture, use and storage, GGR and hydrogen as announced in the recent Spending Review and Industrial Strategy.
UK-EU linkage and the introduction of the Carbon Border Adjustment Mechanism
With the proposed linking of the UK and EU schemes, delegates will consider strategy and practicalities for alignment, including how far the UK can harmonise with the EU ETS without limiting domestic flexibility, and implications of adapting to evolving EU standards over time.
Discussion will assess the potential impact of this linkage on policy development and timing, including the phased introduction of the EU Carbon Border Adjustment Mechanism in 2026 and the UK equivalent in 2027. Delegates will examine how administrative and compliance burdens on businesses operating across both regimes might be addressed, and discuss stakeholder engagement and preparedness.
There will also be consideration of financial strategies to support sectoral decarbonisation and removal solutions for hard-to-abate sectors. We expect discussion on how the effectiveness of the UK and EU CBAMs could be improved in incentivising decarbonisation and supporting domestic industrial competitiveness, amid concerns over balancing climate ambition with economic resilience. The impact on international suppliers and the division of CBAM compliance responsibilities between importers and exporters will also be discussed.
Market integrity
Further discussion is expected on the future for UK policy on free allocation allowances in preparation for the second allocation period in 2027. Delegates will assess how market stability mechanisms - including the proposed Supply Adjustment Mechanism - can best support the reduction of free allocation allowances, in line with the introduction of the UK CBAM, the overall ETS cap, the UK carbon budget, and EU caps.
Market policies and management will be discussed, including the Cost Containment Mechanism and Supply Adjustment Mechanism, looking at ways to maintain carbon market stability, flexibility and integrity. Delegates will consider concerns that carbon pricing is too low and examine ways to manage the effects of UK-EU linkage on converging carbon prices, including fears of price volatility deterring investment.
Further sessions will consider methodologies for calculating direct and embodied emissions, and monitoring, reporting and verification (MRV) criteria, to achieve high-integrity mandatory and voluntary carbon markets. We expect a focus on frameworks for assessing industry benchmarks and carbon leakage exposure to manage free allocation allowances. Standards and methods for MRV will be considered, including support for sectoral compliance with the UK ETS and UK and EU CBAM.
UK ETS scope expansion
Stakeholder preparedness for expansion of the UK ETS to the maritime and waste sectors will be discussed. Delegates will consider operational, financial, and administrative impacts of scope expansion, including the development of robust MRV systems for newly-included sectors and models for equitable cost distribution between operators, service users, and government.
Greenhouse Gas Removals - developments in policy, funding, technology and markets
Sessions will consider the role of GGRs, including CCUS and nature-based removals, and the operation of voluntary carbon and nature markets alongside the UK ETS and CBAM.
Developments in CCUS policy, funding, and technology will be discussed, including funding for CCUS Track-1, and ETS support for CCUS via the recognition of non-pipeline methods of carbon transportation, announced within the Spending Review 2025, and the recently published UK Infrastructure: A 10 Year Strategy and the Industrial Strategy. Delegates will consider how CCUS can be utilised for hard-to-abate sectors, such as aviation, cement, steel, and chemical manufacturing.
How GGR markets might be implemented alongside - or integrated within - the ETS and CBAM will be considered, with discussion expected on approaches to managing price stability, carbon accounting and accreditation, and the development of robust MRV criteria.
Sessions will also examine the way forward following the Government’s consultation last year on private market integrity and expansion, including next steps for encouraging private investment in voluntary carbon and nature markets. Discussion is expected on governance strategies, ensuring high-integrity credit generation, and increasing participation from the private sector.
Future of carbon markets beyond 2030
Delegates will also discuss prospects for continuing the UK ETS beyond 2030, including of the emissions cap, banking rules for unused allowances, and the planned transition from Phase I to Phase II. They will assess the effectiveness of the scheme in light of the NAO’s report on the ETS and amid UK ETS Authority’s ongoing statutory review, and consider best practice and potential areas for improvement in its design.
Sessions will explore how the UK ETS might evolve in the context of wider policy developments, including proposals set out in the forthcoming Climate Action Plan and evaluating how carbon markets can complement other national and international decarbonisation approaches.
All delegates will be able to contribute to the output of the conference, which will be shared with parliamentary, ministerial, departmental and regulatory offices, and more widely. This includes the full proceedings and additional articles submitted by delegates. As well as key stakeholders, those due to attend include officials from DESNZ; DfT; DBT; HM Treasury; NIC; NISTA; MOD; CCS; NWF; the Welsh Government; and The Scottish Government.
