UK Greenhouse Gas Emissions Trading Scheme - 2020s

UK Greenhouse Gas Emissions Trading Scheme - 2020s

In the 2020s, the UK's greenhouse gas emissions trading scheme is operated as the "UK Emissions Trading Scheme (UK ETS)" following Brexit. Introduced in 2021, it was designed as a replacement for the EU ETS. This new scheme covers the entire UK (England, Scotland, Wales, and Northern Ireland) and sets higher reduction targets.

### Current Goals and Mechanism
The UK ETS aims to reduce greenhouse gas emissions by 68% compared to 1990 levels by 2030. The scheme targets major emitters in power, industry, and aviation sectors, with carbon pricing playing a crucial role. As of 2023, the price per ton of CO2 emissions rights averaged £65, comparable to the EU ETS price of approximately €85.

### Regional and Industrial Impact
In urban areas like London, renewable energy adoption has accelerated, with the Windar Forest hosting a large-scale wind farm as a key example. In northern England, home to concentrated manufacturing industries, investment in emissions reduction technologies remains a challenge. For instance, Newcastle-based heavy industry firm BAE Systems introduced carbon capture technology in 2022, reducing annual emissions by 10%.

### Reduction by Material
In the UK, coal usage has nearly been eliminated, with natural gas being the primary energy source. Renewable energy accounted for over 40% of total power supply in 2023. However, industrial sectors still have high CO2 emissions, particularly in steel and cement industries, which require further reduction efforts.

### Challenges and Prospects
One challenge with the UK ETS is the volatility of carbon prices, which can impact long-term corporate investment planning. In Scotland, for example, increased emissions rights costs for fishing and food processing industries raise concerns about regional economic impacts. To address this, the government plans to introduce a carbon price stabilization mechanism to mitigate excessive price fluctuations.

Additionally, the UK government is strengthening support for startups through the "Net Zero Innovation Program." For example, London-based startup ClimeWorks UK developed direct air capture (DAC) technology, improving CO2 capture efficiency by 20%.

### Conclusion
The UK's emissions trading scheme in the 2020s continues to set ambitious reduction targets while maintaining distinct features from the EU ETS. By considering geographical and industrial diversity, the UK's approach to emissions reduction through carbon pricing serves as a model for other countries.