According to a government official familiar with the matter, the UK would prefer to remain in the European Union's Emissions Trading System (EU ETS) after completing its withdrawal from the EU. The official stated that the benefits of staying in the EU ETS outweigh the drawbacks of leaving. The EU ETS sets limits on greenhouse gas emissions for thousands of power stations and factories across Europe. Remaining in the trading program would provide continuity for businesses in the UK, including power stations, oil refineries, and steelmakers.
The UK Department for Business, Energy and Industrial Strategy did not comment on post-Brexit arrangements but emphasized that existing rules apply as long as the UK remains an EU member. The department also stated that the UK will continue participating in negotiations on EU 2030 climate legislation, including the next phase of the Emissions Trading System. Prime Minister Theresa May has indicated that she will trigger formal Brexit talks by the end of March.
The Committee on Climate Change, the government's adviser on global warming, has suggested that the EU ETS may be the "least-cost approach" to regulating emissions without creating competitiveness challenges for industry. It recommended strengthening certain policies previously set at the EU level after Brexit, including remaining in or replicating the trading program. Non-EU countries like Iceland, Liechtenstein, and Norway already participate in the EU ETS.
The UK, along with the other EU member states, made a collective commitment to reduce emissions by two-fifths by 2030 as part of the Paris Agreement. The country has been at the forefront of pushing for stronger climate change policies within the EU and has already achieved a 35% reduction in emissions since 1990. It has domestic laws in place to ensure continued progress in reducing emissions, including targets to reduce greenhouse gases by 57% by 2030.
