UK to Launch Post-Brexit Carbon Trading Scheme in May

The UK’s emissions trading scheme is “unlikely” to diverge too much from the EU’s regime, says Hæge Fjellheim, Head of Carbon Research at Refinitiv.

The UK government has announced its post-Brexit emissions trading scheme (ETS) will be launched in May, with its first auctions hosted by Intercontinental Exchange (ICE) on May 19. ICE also hosts the EU carbon trading platform.

UK utilities companies and other potential market participants have been awaiting details on the new scheme since the UK formally exited the EU on 1 January 2021, continuing to buy allowances under the EU ETS scheme in the interim.

ICE said that 83 million UK allowances will be sold this year, with auctions taking place every two weeks. Auction volumes will be in line with the UK government’s pledge to cut allowances for polluting by 5% compared the EU ETS system.

“It was expected that the release of the auction calendar was coming up soon, and it’s good for markets participants to finally have a start date for auctions, futures and spot contracts confirmed,” said Hæge Fjellheim, Head of Carbon Research at Refinitiv.

“The more certainty around the regulatory framework the better… [continues]

Read the full article on Regulation Asia’s sister publication, ESG Investor.

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