TO BE PUBLISHED September 2026
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This conference will focus on next steps for the UK Emissions Trading Scheme as it expands in scope and preparations are made for the second allocation period from 2027. Areas for discussion include practical arrangements for compliance and reporting, looking at how the market operates in practice, approaches to maintaining competitiveness and addressing risks of emissions shifting overseas, integration of new sectors, and longer-term decisions on scheme design and the role of carbon pricing.
It will bring stakeholders and policymakers together to examine key issues for policy, regulation and participating sectors in maintaining market confidence and putting in place effective compliance arrangements, as new sectors enter the scheme and decisions are taken on protection against carbon leakage and how the cap is set over time. Delegates will also consider the way forward for scheme design and regulatory provisions in supporting decarbonisation for hard-to-abate sectors, particularly where alternative pathways to emissions reduction remain limited.
The agenda will assess implications of recent decisions by the UK ETS Authority, including its response to the Future Markets Policy Consultation, which confirmed a broadly incremental approach to market reform, retaining existing stability mechanisms, setting out approaches to free allocation and future scheme development, and increasing and indexing the Auction Reserve Price in line with inflation. In this context, areas for discussion include options for free allocation settings for 2028-2030 and what these mean for sectors exposed to international competition, operation of the UK Carbon Border Adjustment Mechanism in addressing risks of emissions shifting overseas, and priorities for the design of the next phase of the scheme, including coverage, rules and long-term alignment with emissions targets.
UK ETS scope expansion and implementation - maritime, energy-from-waste and greenhouse gas removals
We expect discussion to look at the early experience of the inclusion of domestic maritime emissions from July 2026, in terms of sector readiness and practicalities relating to monitoring and reporting requirements, and the introduction of surrender obligations. The potential for further maritime inclusion will be explored, drawing on responses to the Department for Energy Security and Net Zero consultation on extending coverage to vessels below the 5,000 GT threshold. Delegates will also assess wider strategies for emissions reduction, including questions around proportionality, competitiveness and cost impacts.
Monitoring, reporting and verification approaches will be discussed, together with questions around administrative readiness and resourcing needed across regulators and regulated entities, and the practical effect of the double-surrender approach - requiring operators to surrender allowances both for fuel use and for reported emissions during the transition period - on the transition to maritime inclusion and compliance processes.
The anticipated inclusion of energy-from-waste from 2028 will also be considered. We expect discussion to draw on experience from the MRV-only period in assessing options for scheme design, compliance approaches and governance arrangements, alongside their implications for delivery in practice.
Delegates will examine options for integration of greenhouse gas removals into the scheme, taking into account its potential contribution in hard-to-abate sectors, developments in GGR technologies, and what inclusion might mean for scheme design and integrity, including approaches to ensuring that incentives continue to prioritise direct emissions reduction alongside the use of removals.
Competitiveness, UK Carbon Border Adjustment Mechanism and UK-EU ETS linkage
Practical implications of exemptions and deduction mechanisms for specific activities or contractual arrangements will be considered, including how compliance cycles and the extent to which costs can be passed on may affect organisations with limited control over emissions - such as local authorities and service commissioners. Discussion will examine how scope expansion, exemptions and deductions affect affordability, proportionality and incentives for emissions reduction, alongside considerations for maintaining competitiveness and commercial sustainability for affected sectors as they work towards emissions targets.
Further sessions consider the UK’s wider approach to carbon pricing as the Government prepares to introduce the UK Carbon Border Adjustment Mechanism from January 2027, alongside work between the UK and EU on potential linkage of their respective schemes.
Delegates will assess approaches to supporting competitiveness alongside incentives for decarbonisation, and managing risks of emissions shifting overseas. This will include how any linkage could affect prices, trading activity and market stability will also be considered, and how they would interact with the planned phase-out of free allocation for sectors covered by the CBAM. Further discussion will consider implications of linkage for international competitiveness, market confidence, and cross-border investment and trading decisions.
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 already due to attend include officials from the Department for Energy Security and Net Zero; Department of Agriculture, Environment and Rural Affairs, NI; Department for Transport; Department for Business and Trade; Department for the Economy, NI; Environment Agency; Ministry of Defence; Transport Scotland; Office for Investment; National Wealth Fund; and the Welsh Government.
