Emissions Trading System (ETS) framework

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Emissions Trading System (ETS) framework

Since the end of the Transition Period on 31 December 2020, the UK no longer participates in the EU Emissions Trading System . This carbon market is a key mechanism to incentivise decarbonisation from the “traded” sector (power generation, energy intensive industry and aviation within the EU, which collectively constitute around 25% of Scotland’s carbon emissions).

The UK Government and Devolved Administrations  intended to establish a UK Emissions Trading System (ETS), with Phase I running from 2021 – 2030. This could operate as either a linked or standalone system. The UK Government and Devolved Administrations have indicated that they would be open to considering a link between any future UK ETS and the EU ETS (similar to the approach taken by Switzerland), if it suited both sides’ interests.

The framework was discussed in session 5 by the Environment, Climate Change and Land Reform Committee.

A UK Emissions Trading Scheme (UK ETS) has been in operation since 1 January 2021.

Date Document
26 January 2021 The Committee wrote to the House of Lords Common Frameworks Committee as part of that Committee’s inquiry into post-Brexit Common Frameworks.
3 December 2020 The Cabinet Secretary provided an update on all the common frameworks in the Committee’s remit.
1 December 2020 The Environment, Climate Change and Land Reform Committee agreed to write to the UK Government and to its sister Committees in legislatures across the UK to highlight recent issues raised with regards to the above Common Framework.
18 November 2020 The Committee responded to the Finance and Constitution Committee’s letter seeking committees’ views on the impact of Brexit in the light of a number of developments, namely the Scottish Government’s proposed ‘keeping pace’ power and UK Government’s proposed internal market.
10 November 2020 The Cabinet Secretary wrote to the Committee with an update on the UK ETS subsequent to the Scottish Parliament approving the Order in Council on 9 September.
1 September 2020 Cabinet Secretary for the Environment, Climate Change and Land Reform gives evidence to the Environment, Climate Change and Land Reform Committee
24 August 2020 Note from Sandbag on the proposed UK ETS
4 August 2020 Letter from the Cabinet Secretary for the Environment, Climate Change and Land Reform to the Convener of the Environment, Climate Change and Land Reform Committee regarding the UK Government consultation on a Carbon Emissions Tax (CET) as an alternative carbon pricing mechanism, if the UK ETS cannot be linked to the existing EU ETS
15 July 2020 Further letter from the Cabinet Secretary for the Environment, Climate Change and Land Reform to the Convener of the Environment, Climate Change and Land Reform Committee regarding legislating for and implementing the UK Emissions Trading Scheme
2 June 2020 Letter from the Cabinet Secretary for the Environment, Climate Change and Land Reform to the Convener of the Environment, Climate Change and Land Reform Committee regarding legislating for and implementing the UK Emissions Trading Scheme