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

On the 3rd of July, a package of reforms were announced by the UK Emissions Trading Scheme Authority (UK ETS) – the joint body comprising the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland that runs the scheme.

The scheme – which has been in place since 2021 – puts a limit on the total amount of greenhouse gases aviation, power and other energy-intensive industries can emit. This incentivises industries away from costly fossil fuels and encourages them to reduce their carbon footprint by investing in energy efficiency and cleaner, or renewable technologies, which in turn can boost energy security.

From next year, 2024, these industries will be required to bring their emissions down at the rate needed to reach net zero goals – sending a clear signal to industry to invest in the long-term decarbonisation that will help the UK to maintain its world-leading position in cutting carbon emissions.

The Authority also announced that the UK ETS will be extended to cover more sectors – 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.

In a joint statement, UK ETS Authority Ministers, including Lord Callanan, Julie James MS, Màiri McAllan MSP and Gareth Davies MP said:

“Our UK Emissions Trading Scheme, along with other interventions, forms part of a wider strategy to provide a long-term framework to incentivise UK industries to decarbonise - seizing the huge opportunities that are arising from a rapidly expanding clean energy sector, and providing the certainty that industries need to invest in new green technologies.”