April 2023
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This conference focused on priorities for developing the UK Emissions Trading Scheme.
Following the establishment of the UK ETS in January 2021, delegates examined performance so far, as well as its capacity to contribute to the UK’s climate change targets, including for net zero greenhouse gas emissions.
In light of the Developing the UK Emissions Trading Scheme consultation and the Mission Zero Independent Review of Net Zero, it was a timely opportunity to look at the potential impact of proposed changes on stakeholders, as well as options for fine-tuning and developing the scheme as it enters its second year of operation, with discussion expected on:
- implementing a cap consistent with net zero
- the role of free allocation policy as a tool for mitigating carbon leakage
- expanding the use of emissions trading to cover the domestic maritime sector, and calls for evidence on waste incineration and energy from waste
- the incorporation of engineered and nature-based greenhouse gas removals into the UK ETS, and what is needed to address greenhouse gas emissions in the agricultural and land-use sectors
Alongside the forthcoming Government consultation response, delegates also considered the impact of the new digital permitting, monitoring, reporting and verification (PMRV) system set to replace ETSWAP from 2023.
We are pleased to have been able to include keynote sessions with Lord Deben, Chairman, Climate Change Committee; and Charlie Lewis, Deputy Director, Emissions Trading, Department for Energy Security and Net Zero.
Overall, sessions in the agenda looked at:
- progress: current workings of the UK ETS - reviewing its performance in supporting the transition to net zero
- potential expansion:
- the future role and scope of the UK ETS - proposals to introduce and accommodate new sectors into the scheme - what would be needed for implementation
- assessing potential effectiveness in contributing to emissions reduction - incentivising the decarbonisation of energy-intensive industries
- framework design: priorities for the UK ETS cap and market system - alignment with net zero conditions
- reacting to changing markets and maintaining competition - improving mitigation of carbon-leakage risks
- collaboration: opportunities to improve joint working - comparing system rules to the EU ETS
- policy priorities: the development of the ETS and long-term plans for the scheme - the UK’s potential to lead internationally through its ETS design
The conference was an opportunity for stakeholders to consider the issues alongside policy officials who attended from DAERA, NI; DBT; Defra; Department for the Economy, NI; DESNZ; DfT; Department of Finance, NI; GLD; HSE; HMRC; Infrastructure & Projects Authority; MCA; NIC; OBR; The Scottish Government; and the Welsh Government - as well as from parliamentary pass-holders from both Houses of Parliament.
