Analysis from think tank Sandbag found that UK coal generation looks set to drop 66 per cent this year, meaning an 82 per cent fall between 2012 and 2016.
The group claimed this fall is entirely responsible for the 18 per cent drop in UK CO2 emissions, as over that period net emissions from other sectors are unchanged.
By charging fossil fuel plants £18 per tonne of CO2, the Carbon Price Support (CPS) is “driving coal off the UK energy system, and setting the country on the right path towards the 2025 coal phase-out”.
However, Sandbag warned that if the government caves to pressure from the industry voices, such as manufacturers, the mechanism could be scrapped causing emissions from coal generation to creep up again.
In a report, the think tank said: “The is a key element of delivering the government’s commitment to a 2025 coal phase-out.
“Removing the will not only halt this move towards decarbonisation of electricity, but it would unwind it, as existing coal power plants would run 24/7 again, and invest to extend their lives.”
It wrote to chancellor Philip Hammond, urging him to set out a “clear commitment” in the Autumn Statement to continue the CPS into the 2020s.
Sandbag analyst Dave Jones said: “The has driven a remarkable decarbonisation of UK electricity. The UK is now on track for a coal phase-out before 2025, but the chancellor must maintain the , or emissions will begin growing again.”
The CPS was introduced in April 2013 as a top-up to the EU Emissions Trading System (ETS) to ensure UK generators pay a minimum price for carbon emissions, called the Carbon Price Floor. The CPS takes the form of a levy on fossil fuels used for generation.
Manufacturers organisation EEF has said the higher energy price resulting from the CPS has put British manufacturers at a competitive disadvantage. It has called for the scheme to be scrapped on the basis that coal plants are closing anyway and it is therefore “no longer needed”.