The UK Government has opened a consultation on a proposed UK carbon emissions tax with public submissions due by 29 September 2020.
The UK will no longer be participating in the EU Emissions Trading System (EU ETS), as of 31 December 2020. To enable the UK to meet its carbon reduction targets from 1 January 2021, the Government has proposed the establishment of a UK Emissions Trading Scheme (UK ETS), which would be preferably linked to the current EU ETS (as has, eventually, been done by Switzerland’s greenhouse gas emissions trading system). Subject to the success of negotiations on a linked UK/EU ETS, the UK has proposed an unlinked UK ETS or a proposed UK carbon emissions tax, by way of an alternative.
The carbon emissions tax would be intended to align with the EU ETS in regards to emissions monitoring, reporting and verification and apply to regulated installations currently participating in the EU ETS that exceed their annual tax emission allowance.