The UK Emissions Trading Scheme Authority has announced a package of reforms to tighten limits on industrial, power and aviation emissions from 2024.

The package of reforms has been announced by the UK Emissions Trading Scheme Authority (UK ETS), a joint body comprising the Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland that runs the scheme.

The scheme, in place since 2021, puts a limit on the total amount of greenhouse gases aviation, power and other energy intensive industries can emit. And the reforms will require these emitters to bring their emissions down at the rate needed to reach net-zero goals.

To ease this transition, the cap will be set at the highest level allowing 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 also been guaranteed until 2026, to continue to protect them from international pressures.

UK ETS will also be extended to cover more sectors including domestic maritime transport from 2026 and waste from 2028, while rolling out a phased removal of free carbon allowances for the aviation industry in 2026 and supporting investment in new Greenhouse Gas Removal technologies.

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