Summary
The UK Emissions Trading Scheme (UK ETS) Authority is seeking views on a number of proposals to improve our approach to Free Allocations; specifically, our approach to calculating the Carbon Leakage Indicator (CLI) and setting the Carbon Leakage List, and the approach to adjusting Free Allocations for Carbon Border Adjustment (CBAM) sectors.
Documents
Consultation description
Purpose of this consultation
The Authority previously consulted on the current methodology for distributing Free Allocation. This consultation is seeking stakeholder views on whether to introduce a Carbon Leakage List formulated using UK-specific data, or if retaining the current list would be preferred. If the Authority does decide to amend the Carbon Leakage List, this would be in force from the second allocation period. The second allocation period will begin in 2027, aligned with the introduction of the CBAM, therefore we are also seeking views on how Free Allocations for CBAM covered sectors should be adjusted.
Proposals in this consultation
This consultation includes a preliminary updated Carbon Leakage List for industries across the UK, based on UK-specific data, the draft list can be found on page 25. This has been based on a proposed method including a number of elements, which we describe throughout this consultation:
- Our approach to the Carbon Leakage Indicator (CLI) equation;
- The data sources used to calculate the CLI;
- How to measure trade intensity and emissions intensity; and
- The CLI thresholds determining eligibility for Free Allocations.
Ways to respond
Consultation closed — responses are no longer being accepted.