From May to August, the Government sought views on integrating greenhouse gas removals (GGRs) into the UK Emissions Trading Scheme (ETS) via a public consultation. GGRs include any method of removing greenhouse gases (typically CO₂) from the atmosphere and can be nature-based or engineered.
The modelling for Jet Zero One Year On estimates that residual emissions will amount to around 30MtCO₂ in 2037 and 18.7MtCO₂ in 2050. In other words, even after the most optimistic outlooks for aviation alternative fuels, cleaner technologies and efficiency improvements have been factored in, Government and industry pathways to achieve net zero for the aviation sector all show significant residual CO₂ emissions in 2050. It is clear that any strategy to deliver net zero will require further mitigation from demand measures, a large investment in GGRs, or a combination of both. Investment in the technology to support Direct Air Capture (DAC) will also be needed to supply e-fuels to the sector, as required under the UK SAF mandate, alongside the potential for Direct Air Carbon Capture and Storage (DACCS).
The UK ETS is a carbon market for energy intensive sectors, including aviation, in which polluting companies purchase allowances from the Government equivalent to the amount that they emit each year. Within the ETS there is a cap on emissions allowances that reduces annually, forcing participants to cut their emissions – this approach is known as a cap and trade system. Within this consultation, the Government proposed that GGRs could replace some of the conventional emissions reductions allowances, whilst keeping the same cap in place. Inclusion in the ETS is seen as an opportunity to finance and scale-up GGRs in the UK.
In this context, AEF welcomes the initiative shown by the Department for Energy Security and Net Zero (DESNZ) to explore how UK policy can best support the development of GGR technologies and markets “at the speed and scale required to meet our climate targets”. We are, however, at an early stage and critical questions have yet to be clarified, such as definitions of permanence. While it is important to progress work on GGRs, AEF believes there is a case for proceeding cautiously. In particular, a decision that the UK ETS provides the best way of supporting removals is premature, and that alternative approaches should be explored before any final decisions are made.
Our full response was based on general consideration of sustainability aspects of the proposal and specifically on how the inclusion of removals in the UK ETS will affect decarbonisation of the aviation sector. We also coordinated with Carbon Market Watch, an NGO that specialises in carbon pricing and climate policy, and their response is available here.
Key Messages
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