UK ETS Free Allocation Review

Overview

The UK Emissions Trading Scheme (UK ETS) Authority (UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland, hereinafter ‘the Authority’) is seeking input on a number of proposals to improve our approach to free allocations.

We have committed to better target free allocations for sectors most at risk of carbon leakage ahead of the next allocation period in 2026, and to tailor this to the UK context. This consultation seeks views on our proposals to meet these commitments. It proposes options for changes to the free allocation methodology including:

• The approach to accounting for activity
• Benchmarking
• The way we assess carbon leakage risk
• Additional aspects of methodology such as consideration of decarbonisation technologies and conditionality
• Technical proposals to improve operability and deliverability of the scheme.

Read the consultation document on GOV.UK.