Lords welcome minister's clarity on EU Emissions Trading Scheme

There has been much debate as to whether the UK will continue to participate in the EU ETS once the UK leaves the EU, and at an evidence session held by the Committee last week, Members heard concerns over the lack of clarity from Government – especially given the significant financial implications for the businesses in the scheme who need to make decisions on what to do with their allowances.

At today’s meeting, however, the Minister stated that the UK is seeking to participate in the EU ETS at least until the end of Phase 3 in 2020. A senior official from BEIS, who was accompanying the Minister, explained that the section of the draft withdrawal agreement (published on Monday) that relates to the EU ETS was not marked as ‘agreed’ because they are still working through the details of how this would work during the transition period.

Reflecting on the Minister’s evidence, Lord Teverson, Chair of the Sub-Committee, said: “We heard last week that industry has been waiting for clarity on this, so really welcome the Minister’s statement that the Government intends to stay in the EU ETS until the end of Phase 3. It’s now imperative that the Government agrees the specifics with the EU as soon as possible, and then quickly moves on to setting out its plans for carbon pricing and funding action on climate change post-Brexit.”

Notes to Editors

1. The EU ETS is one of the EU’s flagship climate change policies. It aims to reduce greenhouse gas emissions in a cost-effective way, by setting a cap on the amount of certain gases that heavy-energy using installations (like power stations and industrial plants) and airlines can use. Companies receive or buy emission allowances, which they can trade with one another; at the end of the year they must then surrender enough allowances to cover their emissions or else heavy fines are imposed.