UK Emissions Trading System to be ready for exit from EU: government whitepaper

London — The system underpinning a UK Emissions Trading System is on track to be ready for the country's exit Jan. 1, 2021, from the EU's own ETS, the UK government said Dec. 14 on publication of an Energy White Paper.

The whitepaper builds on Prime Minister Boris Johnson's GBP12 billion ($16.08 billion) 10-point plan for clean energy, aimed at creating more than 200,000 jobs in the UK and boosting private investment by 2030.

"The UK government has legislated to establish a new UK Emissions Trading System, and the technical system underpinning the scheme is in final stages of development and on track to be ready on time," it said.

The scheme was more ambitious than the EU ETS it replaces, the government said.

"From day one the cap on emissions allowed within the system will be reduced by 5%, and we will consult in due course on how to align with net zero. This gives industry the certainty it needs to invest in low carbon technologies," it said.

The government was open to linking a UK ETS to international partners in principle, "and we are considering a range of options, but no decision on our preferred linking partners has yet been made."

Sizewell C talks

Alongside the whitepaper, the government has confirmed it is to enter negotiations with developer EDF on the Sizewell C nuclear power project in Suffolk "as it considers options to enable investment in at least one nuclear power station by the end of this Parliament."

"The successful conclusion of these negotiations will be subject to thorough scrutiny and needs to satisfy the government's robust legal, regulatory and national security requirements," it said.

The government would continue to explore a new Regulated Asset Base funding model for new nuclear, but it would also look at the potential role of government finance during construction, "provided there is clear value for money for consumers and taxpayers."

Meanwhile, the government would create a GBP385 million Advanced Nuclear Fund to support development of small modular reactors, it said.

Doubling electrification

The whitepaper sets out steps to cut 230 million mt of CO2 from industry, transport and buildings by 2030.

Central to the policy plan is support for major infrastructure projects in renewables, carbon capture and storage, and hydrogen, twinned with a program to retrofit homes for improved energy efficiency and decarbonized heat.

The policy framework would see the UK generating emissions-free electricity by 2050, with bulk of the power system decarbonized in the 2030s.

"Low carbon electricity will be a key enabler of our transition to a net zero economy with demand expected to double due to transport and low carbon heat," it said.

Policy targets gathered under the whitepaper include:

• A commitment to reach 40 GW of offshore wind capacity by 2030, including 1 GW of floating wind capacity
• Investment of GBP1 billion in carbon capture and storage in four industrial clusters by 2030, and at least one fully net-zero cluster by 2040
• An intention to work with industry to aim for 5 GW of hydrogen production by 2030, backed by a GBP240 million net-zero Hydrogen Fund for low carbon hydrogen production
• Investment of GBP1.3 billion to accelerate the rollout of electric vehicle charge points, plus GBP1 billion to support the electrification of cars, including for mass production of batteries
• Extension of the Warm Home Discount Scheme to 2026 to cover an extra 750,000 households
• An aim that, by mid-2030, all newly installed heating systems will be low carbon, or appliances that can be converted to a clean fuel supply