UK Emissions Trading Scheme
News and announcements
The UK Emissions Trading Scheme ended in December 2006, with final reconciliation completed in March 2007. The UK ETS was the world's first economy-wide greenhouse gas emissions trading scheme.
Future domestic scheme - carbon reduction commitment
On 23 May 2007 the Government announced, as part of the Energy White Paper, that it has decided to take forward a Carbon Reduction Commitment.
This is the new name for the Energy Performance Commitment proposal on which we consulted in November 2006. The consultation outlined a number of proposals to cut carbon emissions from the large non-energy intensive commercial and public sectors. Analysis of responses to this consultation showed strong support for a mandatory rather than a voluntary measure. The name of the scheme has been changed to prevent any confusion with Energy Performance Certificates.
Government has taken care to ensure lessons are learnt from UK ETS as well as EU ETS and CCAs. The Carbon Reduction Commitment aims to be administratively simple and strike a reasonable balance between giving recognition to those organisations who have taken early action, whilst also driving further emissions reductions.
Voluntary Emissions Trading Registry
As Climate Change Agreements (CCAs) extend beyond 2006, CCA holders will be able to continue to trade through the voluntary market to meet their CCA targets or to sell any overachievement, via the Emissions Trading Registry (ETR), if they so wish.
Therefore, the Emissions Trading Registry will be re-branded to reflect the CCA focus of the Registry from March 2007 onwards.
LIfetime of the Scheme
Thirty-three organisations ("Direct Participants" (DPs) in the scheme) voluntarily took on emission reduction targets to reduce their emissions against 1998-2000 levels. They committed to reducing their emissions by 3.96m tonnes of carbon dioxide equivalent (CO2e) by the end of the Scheme.
Over the lifetime of the scheme DPs have achieved emissions reductions of over 7.2 million tonnes of CO2e. DPs have gained valuable experience in developing emissions reduction strategies in addition to learning about the mechanics of trading. In September 2006 Defra/UK ETG held a major stakeholder workshop to consider lessons learned from UK ETS. At the same time Government commissioned Enviros to produce a report on the first four years of the UK Emissions Trading Scheme. Key findings from these reports highlight:
- The majority of DPs agreed that the UK ETS provided a valuable opportunity for learning;
- The UK ETS encouraged DPs to make investments to reduce emissions or change their behaviour; and
- To ensure the success of future policies, there must be clear well defined rules - “keep it simple”.
- Reports evaluating UK ETS
See also
Page last modified: 19 December 2007