Political leaders have been urged to begin the process of linking up the emissions trading systems in the EU and UK by a group of more than 40 industry associations.
In letters addressed to European Commission president Ursula Von der Leyen and UK prime minister Boris Johnson, the trade bodies wrote that linking the two schemes would “reaffirm the UK and EU as climate leaders and demonstrate strong advocacy for international carbon markets”.
“Given the similarities between the UK and EU’s carbon trading regimes, there should be no two emissions trading systems that are easier to link,” they added.
The long list of signatories includes a number of trade bodies from the energy sector such as Energy UK, Renewable UK, the Association for Decentralised Energy and the Nuclear Industry Association.
The letters stated that “linkage will benefit both parties”, providing liquidity, price discovery and the ability to attract abatement from across a wider area, whilst creating “a level playing field in terms carbon pricing” and avoiding competitive distortions. They said both the EU and UK would be able to achieve net emissions “faster and more cost-effectively”.
The message to Johnson emphasised that linkage “retains the full use of revenues and ability to set the majority of the rules,” ensuring the mechanism benefits both the UK’s “economy and sovereignty”, whilst the letter to Von der Leyen argued it “strengthens the integrity of, and confidence in, Europe’s carbon market.”
The UK began operating its own emission trading system (ETS) as the beginning of this year as a replacement for participation in the EU ETS following its exit from the union. The letters noted the commitments made by the EU and UK to give “serious consideration” to linking the schemes and called for negotiations to begin “as soon as possible”.