Carbon Allowance Trading

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Every organisation that is fully participating in the scheme is obliged to buy Carbon Allowances in advance of the reporting year whose emissions they are to cover.

  • Introductory Phase
    Carbon Allowances will be sold at a fixed price of £12 per tonne of CO2 by the government.
  • Other Phases
    A limited amount of Carbon Allowances will be auctioned off by the government. It is expected that the amount of auctioned allowances will be reduced every year, creating a shortage and therefore a higher pressure for reducing the carbon footprint. An estimate of £16 per tonne of CO2 has been given for the first year of the allowance auctioning.

If an organisation does not have sufficient Carbon Allowances for submission at the end of the year, they will have to obtain further allowances at a higher price from the government, or through trading with other parties.

Surplus allowances can be transferred from one year of a phase to the next year, but not between phases.