The European Union Emissions Trading System (EU ETS) was the first large greenhouse gas emissions trading scheme in the world, and remains the biggest. It was launched in 2005 to fight global warming and is a major pillar of EU climate policy.
Lawrence Slade, Chief Executive of UK Energy – whose members range from the market-dominating Big Six providers (see image) to a new generation of small and independent providers – made clear the association’s wish to remain in a letter to Professor Dieter Helm, Chairman of the independent Cost of Energy Review.
Today, the EU ETS covers more than 11,000 factories, power stations, and other installations with a net heat excess of 20 MW in 31 countries – ie all 28 EU member states (which presently includes Britain) plus Iceland, Norway, and Liechtenstein.
Under the EU ETS, the governments of the EU Member States agree on national emission caps which have to be approved by the EU commission. Those countries then allocate allowances to their industrial operators, and track and validate the actual emissions in accordance with the relevant assigned amount.
Slade said: “I am writing to set out Energy UK’s position on what we believe should be considered in your review – including setting out the <British> Government position on the future of carbon pricing including the carbon price floor and EU Emission Trading Scheme (EU ETS).
“Following the UK’s decision to exit the European Union whilst recognising that post Brexit there is a strong requirement for a different mind-set for ‘Team GB’, investors require a clear path for the future of carbon pricing.
“However, our preference is for the UK to retain membership of the EU ETS to deliver decarbonisation at lowest cost for the whole economy. Long-term visibility is needed to help enhance investor confidence and lower cost of investment.”
22 Sept 2017