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Brexit, ETS, Uncategorized

Brexit: UK to run own ETS – will it link to the EU ETS?

The UK’s Department of Business, Energy, and Industrial Strategy (BEIS) has announced that a standalone Emissions Trading Scheme (ETS) will run in the UK after Brexit, replacing the European ETS in the UK. The objective is to initially shadow the EU ETS but eventually tighten it in order to achieve the “net zero by 2050” policy that the UK has adopted, with the initial cap already set lower than the EU level. BEIS’s press release is here and the relevant document, which is a response to a previous consultation,  is here.

This article on the Current +/- web site reports that the UK is considering linking the scheme to the EU ETS. This has been welcomed by Energy UK in this press release. However, this article  on the Reuters web site reports that the EU is resisting such a link, unless certain safeguards on potentially adjusting climate targets were in place.

The UK’s Committee on Climate Change (CCC) has written this letter to the government  about the proposed scheme, making several recommendations, including a further tightening of the caps and the effective setting of a price floor. The letter is  also reported on the Argus Media web site here.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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