Policy paper

UK Emissions Trading Scheme markets

This document explains how the supply of allowances in the UK Emissions Trading Scheme (UK ETS) will work in the early years of the scheme.

From:
Department for Energy Security and Net Zero and Department for Business, Energy & Industrial Strategy
Published
10 May 2021
Last updated
2 January 2024 — See all updates

Documents

UK Emissions Trading Scheme markets

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The UK Emissions Trading Scheme (UK ETS) went live on 1 January 2021, replacing the UK’s participation in the EU Emissions Trading System (EU ETS).

This document explains the supply of allowances in the UK ETS in the early years of the scheme. It sets out background information on the functioning of the auctions and secondary market, free allocation, and the market stability mechanisms that the ETS Authority has in place to ensure smooth market operation.

It also signals that the UK ETS Authority will monitor the market closely as it develops and will actively consider at the earliest opportunity actions to support smooth market operation.

Published 10 May 2021
Last updated 2 January 2024 + show all updates

  1. Added link to the consultation on the UK ETS future markets policy.

  2. ICE has today published a revised auction calendar which takes account of the updated Aviation operators’ free allocation entitlements figure.

  3. Link to ICE 2023 auction calendar added.

  4. Link to updated ICE auction calendar added.

  5. We have updated the reference to the 2021 auction calendar. This was published by ICE Futures Europe (ICE) on 19 October and includes surplus allowances set aside (but not required) for 2021 aviation free allocation entitlements.

  6. Added information about determining the Auction Clearing Price.

  7. The expected publication date of the 2022 auction calendar has changed from 15 July 2021 to autumn 2021.

  8. The Cost Containment Mechanism (CCM) number has been changed from £46 to £44.74.

  9. First published.