UK

Tighter limit on industrial, power and aviation emissions from 2024


John Besley, PA
Mon, 3 July 2023

A new limit on emissions for the power sector, energy intensive and aviation industries will come into force from next year, it has been announced.

Under the limit, the industries will be required to bring their emissions down at the rate needed to reach net zero goals.

The announcement forms part of a package of reforms unveiled by the UK Emissions Trading System Authority (UK ETS), the joint body comprising the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland that runs the emissions trading scheme.

The UK ETS incentivises decarbonisation through a process of buying and selling emissions allowances, which companies must obtain for every tonne of emissions they produce each year.

To help ease the transition to the new limit, the UK ETS Authority said the cap will be set at the highest level of the range consulted on, in line with net zero, in order to allow maximum flexibility for industries.

Extra allowances will also be made available to the market between 2024 and 2027, while the current levels of free allocation of allowances for industry has been guaranteed until 2026 in a bid to protect from international pressures.

The aviation sector is also affected (Steve Parsons/PA)

In a joint statement, UK ETS Authority Ministers, including Lord Callanan, Julie James, Mairi McAllan and Gareth Davies, said: “With the recent rises in energy prices, it is more important than ever that we accelerate the transition away from costly fossil fuels, towards greener and more secure energy.

“Our UK Emissions Trading Scheme, along with other interventions, forms part of a wider strategy to provide a long-term framework to incentivise UK industries to decarbonise – seizing the huge opportunities that are arising from a rapidly expanding clean energy sector, and providing the certainty that industries need to invest in new green technologies.

“The decisions taken here will not only put us on the path to net zero, but will also support crucial industries on their path to long term sustainability.”