Defra welcomes voluntary changes to UK emissions trading scheme

Defra welcomes voluntary changes to UK emissions trading scheme
Published: 01 December 2004

Six leading companies involved in the UK Emissions Trading Scheme have restated their commitment to the scheme by offering to provide an additional 8.9Mt of carbon dioxide equivalent emissions reductions.   The voluntary UK Scheme began in 2002 with 32 companies pledging to cut emissions of greenhouse gases by 11.88 million tonnes of CO2 equivalent before the end of 2006.  In the first two years’ operation of the Scheme, many participants have been able to achieve emissions cuts beyond initial expectations. This has resulted in a surplus of emissions reductions allowances in the UK Emissions market. 

With two years’ experience of operating in the Scheme, six companies have been talking to Defra about how to keep the Scheme on track, to provide both cost effective incentives for emissions reductions and market experience in advance of forthcoming international trading.  These six firms Ineos Fluor, Rhodia Organique Fine, INVISTA Textiles, BP, British Airways and Lafarge Cement - have consequently offered to increase their collective emission reductions by almost 280 per cent. 

Environment Minister Elliot Morley welcomed the voluntary action taken by the companies.  "I am very pleased that these companies have acted so responsibly. Their action will ensure that the pioneering UK ETS - which was the first national level greenhouse gas trading scheme in the world - will deliver both environmental benefits and additional value for taxpayers’ money.   "We will be writing to all UK ETS Direct Participants, explaining the changes to the scheme." 

The UK Emissions Trading Scheme is a voluntary Scheme running for 5 years from 2002 - 2006. It is the first economy-wide national-level greenhouse gas trading scheme. There are 32 Direct Participants in the Scheme, who have agreed to reduce emissions by 3.96Mt CO2 equivalent (tCO2e) from baselines. In return these DPs receive a total of UK£215m in incentive monies over 5 years. Due to the stepped targets, this results in a cumulative reduction of 11.88Mt CO2e over the lifetime of the Scheme. 

In the first year participants in the Scheme achieved emissions reductions of 4.6m tCO2e. In the second year they achieved 5.18m tCO2e. Over the two years this is almost 7.5Mt CO2e beyond their targets.  Further information on the UK Emissions Trading Scheme is available on the Defra website: