A Chance to Shape the Future of Carbon Pricing?

Share on facebook
Share on twitter
Share on linkedin

Last month, the EU carbon emissions price hit a 10-year high. As the price of carbon reached €18 per tonne [1] it prompted many to question what UK carbon pricing policy might look like post Brexit. This uncertainty presents a problem for both generators and suppliers as they attempt to forecast for the years ahead.

The UK Already Adopts A Hybrid Approach to Reducing Emissions

Carbon pricing within the EU Emissions Trading System (ETS) is a key instrument of decarbonisation. The UK goes even further to support its legally-binding emissions targets. Under the Climate Change Levy (CCL) the Government has implemented the Carbon Price Floor which tops up prices if necessary. The UK-only element of the price floor is capped at £18 until 2020 [2] but the future of the ETS element is unclear.

The Government Has Proposed a Range of Options

In March 2018, the Minister for Energy and Clean Growth, Claire Perry told Parliament that the UK would remain in the ETS until the third trading phase expires in 2020. [3] This is despite being scheduled to formally leave the EU in March 2019. However, this is yet to be agreed with EU policy makers. Since then, the UK Government has presented leaving the single energy market as an option. [4]

Industry Cannot Afford to Wait and See

Laurence Slade, Chief Executive of Energy UK has said: ‘At present, as we do not know what carbon pricing mechanism the UK will be in, the exposure to carbon costs for that period is undefined which makes it extremely difficult to price any thermal generation and causes deep uncertainty across the market. Uncertainty creates risk and risk has a price.’[5]

Proactive Engagement Can Help Businesses Gain Clarity

Businesses should take this opportunity to engage with stakeholders to achieve clarity for the interm period and influence the policy framework beyond Brexit.

Brevia Consulting provides straightforward political advice and support to businesses and organisations.

Discover how Brevia can help you and your organisation by contacting the Brevia Energy Team on 020 7091 1650 or contact@brevia.co.uk

[1] Sandbag, EUA Price, link

[2] HM Revenue & Customs, 19 March 2014, link

[3] Business Green, 23 March 2018, link

[4] Bloomberg, 16 July 2018, link

[5] Energy UK, 5 July 2018, link



Coronavirus: Bringing Technology Policy Under the Spotlight

Before the coronavirus crisis, the UK Government was in the process of looking into online harms and formulating legislation to combat them, with the proposed measures designed to be the ‘first of their kind’. The emergence of coronavirus has highlighted the full breadth of online harms and their potential for damage, and accelerated the Government’s appetite to respond.

Read More »

What Are The Implications Of Coronavirus for Transport Policy?

Some of the most dramatic effects of the Covid-19 outbreak and the response measures it demands have been on modes of transport. Airlines have been grounded, discretionary domestic travel is discouraged and the use of public transport is advised against.[1] Instead, the Government has promoted cycling and walking as a form of safe, socially distanced travel. With the consequences of the virus expected to persist for a ‘long period of time’[2] transport policy is shifting to keep people moving.

Read More »
Torness nuclear power station

Five Notable Developments In Nuclear This Week 17.04.2020

It has been announced that Jacobs, a Dallas headquartered energy consulting, engineering and construction services firm, has been awarded several contracts with an estimated combined value of $25 million. The contracts were awarded by Fusion for Energy (F4E), the ITER Organization and the United Kingdom Atomic Energy Authority (UKAEA) in order to support leading-edge research in fusion energy.

Read More »
  • Request A Free Consultation

    Get in touch to arrange your free consultation call.