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    UK Policy and Regulation

    What is UK ETS (UK Emissions Trading Scheme)?

    The UK's carbon market that replaced EU ETS participation after Brexit. UK ETS caps emissions from energy-intensive industries and power generation, requiring participants to hold allowances for their emissions.

    Why it matters

    UK ETS primarily affects large industrial emitters, but the carbon price it sets influences energy costs for all businesses. Rising allowance prices increase the financial case for energy efficiency and decarbonisation investment across the economy.

    Example

    A glass manufacturer participating in UK ETS pays for carbon allowances at £50 per tonne. With annual emissions of 5,000 tCO₂e, the company faces a £250,000 carbon cost, making a £400,000 furnace upgrade economically attractive.

    Related terms

    Carbon Credits

    Tradeable certificates representing the right to emit one tonne of carbon dioxide or equivalent greenhouse gas. Carbon credits can be traded on voluntary or compliance markets and are used to meet emission reduction obligations.

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