UK’s groundbreaking emissions market is ready for lift-off
The UK’s emissions trading scheme is now fully prepared for the start of trading at the beginning of next month, following an auction in which 34 companies set the price of emission credits, and set the level of the emission reduction targets.
The Government is making available £215 million in incentive money for those entering via the auction, for the next five years. The maximum that any company will receive will be 20% of this amount or £43 million. From 2 April, participating companies will be able to trade their allowances or cut their emissions – whichever is the cheapest option – in order to lower the emissions of the whole group by a set amount.
Although only 34 companies are currently part of the scheme, more are expected to join later on in the year, as the nearly 6,000 companies with Climate Change Agreements (see related story) can use the scheme to meet their targets, or to sell any over-achievement.
“It is a very exciting time for UK businesses, and particularly for the 34 organisations now participating in the UK scheme, as we take our place as the world leader in greenhouse gas emissions trading,” said Dr Chris Fay, Chairman of the Government’s Advisory Committee on Business and the Environment (ACBE).
“Not only will this deliver cuts equivalent to over four million tonnes of carbon dioxide over five years, it will give UK companies invaluable experience of emissions trading at a national level,” said Environment Minister Michael Meacher.
The initial 34 companies include Asda Stores Ltd, Barclays Bank plc, the Ford Motor Company Ltd, Marks and Spencer plc, The Natural History Museum, Rolls-Royce plc, and UK Coal Mining Ltd.