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UK to allow use of carbon removals in Emissions Trading System

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By illuminem briefings

· 3 min read


illuminem summarises for you the essential news of the day. Read the full piece on ESG Today or enjoy below:

🗞️ Driving the news: The UK government has announced that engineered greenhouse gas removals (GGRs) will be integrated into the UK Emissions Trading Scheme (ETS), allowing companies to use verified carbon removals—such as Direct Air Capture (DAC) and BECCS—to meet emissions allowances
The legislation is expected by the end of 2028, with implementation targeted for 2029

🔭 The context: The UK ETS, established in 2021 to replace the EU system post-Brexit, sets a cap on emissions for high-emitting sectors and facilitates carbon pricing via tradable allowances
As the UK targets net zero by 2050, incorporating GGRs is seen as essential for offsetting residual emissions in hard-to-abate sectors
The move follows a public consultation and reflects a growing international trend to link removal technologies with compliance markets

🌍 Why it matters for the planet: Integrating GGRs into the ETS provides a regulatory mechanism to accelerate deployment of permanent carbon removal technologies, critical for climate scenarios requiring negative emissions
However, strict eligibility rules—such as a 200-year carbon storage requirement—are essential to maintain environmental integrity and prevent offset misuse
If done effectively, the policy could catalyze investment in domestic removal capacity and send a strong demand signal to innovators

⏭️ What's next: The UK will legislate the ETS integration by 2028 and launch operational mechanisms by 2029, including verified carbon removal auctions and project certification pathways
Initially, only UK-based removal projects will qualify, and removals will be issued allowances post-verification
The ETS cap will remain fixed, ensuring GGRs substitute—not increase—total permitted emissions. Decisions on including nature-based removals like forestry remain under review

💬 One quote: “The UK ETS could drive both emission reductions and carbon removal in one efficient market.” – UK ETS Authority, Consultation Response

📈 One stat: Apparel sector emissions hit 944 million metric tons in 2023—2% of global emissions—highlighting the urgent need for decarbonization across high-impact industries

Explore carbon credit purchases, total emissions, and climate targets of thousands of companies on Data Hub™ — the first platform designed to help sustainability providers generate sales leads!

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