LONDON (Reuters) – The amount of UK carbon permits to be auctioned to industry next year will fall by 12.4% to their lowest-ever level to be aligned with British government plans for net zero emissions, the UK Emissions Trading Scheme (ETS) Authority said.
Next year’s auction calendar will limit the number of carbon permits companies can buy to 69 million, 12.4% lower than 2023. By 2027, the amount should fall around 45% from 2023 to 44 million and then fall to 24 million by 2030.
The authority said the move should support energy intense industries to move away from using fossil fuels to generate electricity.
Companies in sectors such as manufacturing, power and aviation are required to buy allowances to offset every unit of carbon they emit. With fewer permits available to buy, these sectors will need to take further steps to cut their emissions, the authority said.
Introduced in 2021, the UK scheme replaced the UK’s participation in the European Union’s ETS.
Earlier this year, the government announced plans to reduce the cap on carbon emissions under its ETS to support its goal to cut emissions to net zero by 2050.
(Reporting by Nina Chestney; Editing by Sharon Singleton)