UK will remain in EU ETS until 2020, minister confirms

Energy and clean growth minister Claire Perry MP has confirmed that the UK will seek to participate in the EU Emissions Trading Scheme (EU ETS) at least until the end of Phase 3 in 2020.

Giving evidence to the House of Lords EU Energy and Environment Sub-Committee, Perry said she was “very aware of the need to provide certainty” about the tool.

She added that the UK was “really committed to carbon pricing as a tool”. But she noted that the EU ETS had not set a carbon price signal that was strong enough and added, “If there is a long term opportunity to improve the carbon pricing signal in the economy by amending or changing our relationship with the EU ETS we would be short-sighted not to take that”.

A senior official from BEIS told the committee that the section of the draft withdrawal agreement published on Monday that relates to the EU ETS was not marked as ‘agreed’ because they are still working through the details of how this would work during the transition period. One issue was around managing allowances between the EU ETS year-end and the Brexit date.

There remains a question over the UK’s representation in the EU ETS in the long term, as Lords said that feedback from industry raised concerns about being a participant with no influence over the scheme, once the UK left the EU. That was under negotiation, they heard.

Lord Teverson, chair of the sub-committee, said: “We heard last week that industry has been waiting for clarity on this, so really welcome the minister’s statement that the government intends to stay in the EU ETS until the end of Phase 3. It’s now imperative that the government agrees the specifics with the EU as soon as possible, and then quickly moves on to setting out its plans for carbon pricing and funding action on climate change post-Brexit.”

The UK will have to join the Paris Agreement and other climate change arrangements in its own right, as its current membership is by virtue of being a member of the EU.


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