Emissions Trading System (ETS)

DEFINITION: A market-based ‘cap and trade’ on emissions that allows parties to buy and sell permits for emissions or credits. The ETS covers 45% of the greenhouse gas (GHG) emissions emitted from energy-intensive sectors. In the UK, more than 700 UK-based energy intensive installations, including power stations, manufacturing facilities and oil refineries, participate in the system.

Related items

Pictured: The San Juan Generating Station, one of the US's 241 coal-fired power plants

G20 nations have funnelled $3.3trn into fossil fuel subsidies since 2015, BNEF reveals

G20 member countries collectively allocated subsidies topping $3.3trn to the oil, coal, gas and fossil-fuelled electricity generation sectors between 2015 and 2019 - a level incompatible with the Paris Agreement.

This new series will be running regularly, bringing you the key headlines, statistics and events in the run-up to COP26

COP26 Action Tracker: China's ETS launches as UK's Cambo oilfield plans draw controversy

With less than four months to go until COP26, this new series from edie will provide a regular temperature check of global climate action from nations and businesses.

The EU's 2050 net-zero target is supported by a 2030 goal to cut emissions by 55%

Europe's 'Fit for 55' climate package: What is included?

The European Commission has tabled a package of energy and climate laws aimed at reaching the EU's 2030 goal of cutting emissions by 55%, and putting it on track to hit net zero by 2050.

According to the paper, some 80% of global annual emissions are not covered by carbon pricing mechanisms

Carbon prices must treble by 2030, $6.6trn investor coalition urges

The UN-convened Net-Zero Asset Owner Alliance, whose members manage $6.6trn of assets, is warning that the world won't decarbonise rapidly enough to deliver the Paris Agreement without a "radical overhaul" of carbon pricing.

All edie podcast episodes can be listened to via iTunes, Spotify and Soundcloud

Sustainable Business Covered podcast: What role do carbon markets and pricing play in the net-zero transition?

With news around offsetting schemes and emissions trading featuring heavily in headlines in recent weeks, episode 103 of the Sustainable Business Covered Podcast explores their role in the net-zero transition.

Under the UK and EU's agreement, mutual changes to energy policy can be made until summer 2026

Green Brexit? Report accuses UK of failing to effectively replace EU energy systems policy

Brexit is making the UK's transition to net-zero "more complex", a new report has warned, stating that Covid-19 has further delayed efforts to set strong decarbonisation policies for an independent UK.

The new UK ETS is the world's fourth-largest in terms of volume

UK ETS: Post-Brexit carbon market opens for first time with carbon price topping £50 per tonne

The UK's carbon price has hit £50 as the nation's post-Brexit emissions trading scheme (ETS) opened for the first time on Wednesday morning (19 May).

Orsted, the operator of the pictured Horns Rev 2 offshore wind farm, is named in the report as a leader on corporate carbon pricing. Image: Orsted 

More than one-third of large companies putting a price on carbon internally, CDP finds

A survey of some 6,000 large businesses on carbon pricing has revealed that more than one-third are using an internal carbon price or are planning to implement one by 2023.

Coal accounted for almost 58% of China's energy generation pre-pandemic

Report: China's carbon neutrality goal only achievable with major coal phase-out

If China is to meet its 2060 ambition of carbon neutrality, announced last year, it must shut hundreds of gigawatts of coal generation and reform emissions trading as a priority, a new report has revealed.

A drop in energy demand and increased uptake in renewables are accountable for parts of the decline

Emissions covered by EU pricing markets fell 12% in 2020

Emissions regulated under the European Union's (EU) carbon market decreased by more than 12% last year, with the coronavirus severely limiting energy demand and industrial output.

The scale and level of the changes announced for the green economy is likely to be underwhelming for many

Tax Day: Treasury will review controversial proposals for aviation duties

The Treasury has provided more than 30 updates to tax rules in the UK, but has stopped short of providing VAT breaks for energy-efficient and resource-efficient materials and business models that many had hoped for.

edie Explains: Biodiversity and Business

What is the relationship between biodiversity and business? What are the operational challenges and opportunities surrounding biodiversity? And what steps can be taken to reverse nature loss and restore natural habitats? This free edie Explains guide answers all of those key questions and more.

Green groups have largely welcomed the new strategy, but want more details

'Another vital step to net-zero': Green economy reacts to the Industrial Decarbonisation Strategy

The UK Government has unveiled a new Industrial Decarbonisation Strategy that will spur rapid decarbonisation across industry, the public sector, construction and manufacturing. But do green groups believe the strategy will put the nation on course for net-zero by 2050?

Green campaigners and trade bodies had been calling for policy certainty over emissions trading and the OEP

UK government confirms interim environmental watchdog and emissions trading scheme launch

The UK Government has confirmed that England's post-Brexit environmental watchdog will launch in July on an interim basis and that its domestic emissions trading scheme (ETS) will launch in May.

Green groups have said this Budget will be "crucial" for setting the UK on a net-zero recovery pathway. Image: Parliament Live TV

Will the 2021 Budget help the UK deliver a green recovery?

Chancellor Rishi Sunak will deliver his second Budget on 3 March. But, faced with the challenge of supporting the economy as the UK completes its lockdown exit roadmap, will the Budget deliver an appropriate response to the climate and nature emergencies?

More than eight billion allowances changed hands through European markets in 2020, a near-20% increase on 2019 levels

Global carbon market grew 20% in 2020

The valuation of the global carbon market grew 20% in 2020, totalling almost €230bn and the fourth consecutive year of record growth, new research has found.

Links between the UK and EU ETSs could become more challenging over time, if the bloc and UK diverge on climate legislation 

UK carbon trading scheme 'leaves many questions unanswered'

As the UK takes its first steps away from the EU, there are still plenty of open questions about how it will align with Europe on climate policy, and in particular, with the EU's flagship emissions trading scheme (ETS).

Pictured: A barge carrying coal on the Yangtze river

China 'preparing to launch its first emissions trading scheme'

The Chinese government is drawing up the first emissions trading scheme in the nation's history, after it committed to carbon neutrality by 2060.

The Treasury reiterates that net-zero is “essential” in delivering long-term prosperity

Net-zero impact on UK economy to be 'relatively small', Treasury finds

The HM Treasury has published a final report in the build-up to a Net-Zero Spending Review, claiming that the transition to meeting the UK's long-term climate goals could deliver "slightly positive or slightly negative" economic growth for the UK, depending on how decisive policy action is.

The White Paper builds on the Ten Point Plan and National Infrastructure Strategy

Five things you need to know about the Energy White Paper

After months of delays, the UK Government finally unveiled its Energy White Paper on Monday (14 December) detailing how an overhaul to transport, energy and infrastructure will deliver an "overwhelmingly decarbonised power in the 2030s" on the road to net-zero by 2050.

Green Groups have welcomed the announcement, but more detail is still being required

An 'undisputed urgency to act': Green economy reacts to the Energy White Paper

The Government has unveiled the long-awaited Energy White Paper today (14 December), with green groups welcoming the focus it provides to both job growth and rapid decarbonisation in order to reach net-zero emissions by 2050.

The White Paper builds on numerous commitments outlined by Government in recent months

Energy White Paper: Government confirms £6.7bn warm homes package and UK ETS

The UK Government has finally released its Energy White Paper, detailing steps to deliver "overwhelmingly decarbonised power in the 2030s", with a new £6.7bn support scheme to be set up to tackle fuel poverty and a UK variant of the Emissions Trading Scheme to be introduced.

Timelines for enshrining the target in law will be confirmed this week

'We can do it!': EU chief announces 55% emissions reduction target for 2030

European Commission President Ursula von der Leyen has confirmed plans to target a 55% cut in greenhouse gas emissions by 2030 as part of a broader European Green Deal programme aimed at reaching "climate neutrality" by mid-century.

European Commission President Ursula von der Leyen confirmed on 16 September that the EU would back the proposed 55% reduction

Carbon prices to climb 50% over next decade following raised EU climate targets

Carbon prices across the European Union (EU) could increase by more than 50% over the next decade, with the bloc's proposed 55% reduction in emissions set to shape renewables and fossil fuel markets in the long-run, according to new analysis from the Refinitiv Carbon Research team.

The end game, regardless, would be to achieve climate neutrality by 2050

EU lawmakers up the ante, vote for 60% climate target for 2030

The European Parliament's environment committee has voted for a new EU-wide target to reduce carbon emissions 60% by 2030, setting the stage for tough negotiations with EU countries and the European Commission, which is expected to propose a 55% goal next week. EURACTIV Germany reports.

edie Explains: The Green recovery

What is the green recovery? Where does business sustainability fit into its wider context? What is happening at a policy level? And what does the future hold for green recovery efforts? This edie Explains guide answers all of these questions and more.

edie Explains: Scope 3 carbon emissions

What are Scope 3 emissions? How are they calculated? How can they be mitigated and reduced? And, what are the business benefits of doing so? This free edie Explains guide gives you everything you need to know.

Cathryn joined the Co-op in the 1990s as a scientific advisor

What makes a sustainability leader? Meet the Co-op's Cathryn Higgs

With the 2021 Sustainability Leaders Awards entry deadline approaching, this new feature series showcases the achievements of the 2020 winners and reveals their secrets to success. Up next: Our Sustainability Leader of the Year 2020, the Co-op's head of food policy Cathryn Higgs.

Peter joined Carlsberg's sustainability team in 2019, following several years in sustainability consulting

Meet edie's 30 Under 30 Class of 2020: Peter Statham, Carlsberg Group

This new series profiles the members of edie's 30 Under 30 - a nomination-based community of 30 hugely talented young sustainability and energy professionals who have already achieved great things or are showing fantastic promise. Up next: Peter Statham, sustainability manager for Carlsberg Group and CMBC.