Low ETS price could undermine UK’s net zero aspirations
Between 2021 and 2023, GHG emissions in sectors covered by the UK’s cap and trade scheme went down by 11 million tonnes.
The UK’s emissions trading scheme (ETS) has proved beneficial for decarbonisation – but reduced allowance pricing since 2023 could undermine its future effectiveness, according to the National Audit Office (NAO).
Within the UK’s cap and trade scheme, allowances were initially priced at the same level as in the EU ETS. But since 2023, they have been auctioned at a lower price than their EU counterparts: at the end of May 2025, a UK allowance cost £50 per tonne, while its EU equivalent was £60.
